Hartford Group plans radical funding move

The Hartford Group has announced plans to inject new funds and new blood to stabilise and revitalise its loss-making London restaurant business, which includes the Pharmacy and Montana outlets.

In the medium term, it also plans to expand into new areas of hospitality and leisure.

It aims to raise £3.1m net of costs from an open offer to existing shareholders of 70,951,819 new shares at 5p each (a 20% discount on the share value of 21 November). The offer closes on 14 December.

The group is also bringing in Stephen Thomas, chief executive of Luminar, as a non-executive chairman and Sheila McKenzie, former managing director of the Slug & Lettuce chain, as chief executive.

Current chairman Kevin Finch, non-executive chairman Nigel Wray and executive directors Nick Leslau and Matthew Freud will step down after an extraordinary general meeting on 15 December.

The first priority is for the company to pay off a £500,000 bank facility that expires in January. This, said McKenzie, is why it opted for the speedier open offer, in preference to a general rights issue.

The offer will be underwritten by Prestbury Investment Holdings, which is owned by Wray and Leslau. These directors, along with Thomas, have also provided a bridging loan of £500,000.

The company has reported a pre-tax loss of £2m on turnover of £5m between 3 January and 10 September. It has halted new openings and reduced costs by controlling spending budgets at the restaurants and making redundant some staff brought in to develop new sites.

McKenzie's immediate task will be to review all existing operations and, longer term, to consider a wide range of expansion opportunities. "We want to find the next big idea," she said.

Hartford has already indicated that it may sell its Idaho and Utah restaurants, along with the Congress private dining club which closed in April, and two development sites, in Ascot, Berkshire and Loughton, Essex (Caterer, 26 October, page 14).

by Angela Frewin