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Gordon Ramsay Holdings profits drop almost 90%

02 July 2009
Gordon Ramsay Holdings profits drop almost 90%

Profits at Gordon Ramsay Holdings (GRH) plummeted nearly 90% last year as the celebrity chef rapidly expanded his restaurant business across the globe.

The company's latest accounts, filed at Companies House today, reveal how close Gordon Ramsay's restaurant empire came to collapse as it nearly ran out of money.

Profits fell from £3.05m to £383,325, with turnover down 14% from £41.59m to £35.57m.

GRH's net debt more than doubled from £4.01m to £9.48m, on which interest payments jumped from £279,485 to £545,563.

The group's financial difficulties were sparked by its rapid overseas expansion programme in 2007 and 2008 through which it lost millions of pounds.

GRH breached covenants on a £10m loan and £500,000 overdraft with Royal Bank of Scotland (RBS), which called in auditors at KPMG, who consequently recommended putting the company into administration.

A separate investigation by HM Revenue & Customs found the company owed £7.2m in taxes.

GRH consequently gave up control of many of its overseas restaurants including Paris, Los Angeles and Prague to the hotels they are housed in.

Other steps included reducing the number of covers in other restaurants, sacking a quarter of the staff at the London head office and Ramsay and GRH chief executive Chris Hutcheson sinking £5m of their own money into the company.

Last month Ramsay said "it's been very painful". "It's taken several million pounds of my own money but I'm still standing," he told the Sunday Times.

Ramsay admits restaurants came close to collapse >>

Head of operations at Gordon Ramsay Holdings to leave >>

Gordon Ramsay sells a third overseas restaurant >>

Gordon Ramsay hands over control of Hollywood restaurant >>

Gordon Ramsay Holdings hands back control of Maze Prague >>

By Kerstin Kühn

E-mail your comments to Kerstin Kühn here.

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