Directors inject new funds into restaurant group backed by ASK founders
Shares in Wildwood and Dim T owner Tasty plummeted on Friday after the restaurant group announced new funding arrangements including a capital injection from its directors.
Tasty said on Thursday evening that it had revised its £7 million loan facility to extend the repayment date from 2021 to 2022.
Quarterly repayments will therefore be significantly reduced from July 2019.
The directors will also put £500,000 of fresh capital into the business so that it can reduce its debt by £1.1 million.
The company is led by co-chief executives Jonny Plant and ASK founder Samuel Kaye, but no details were released regarding which directors would contribute capital.
Mr Kaye’s brother and ASK co-founder Adam is also on the board as a non-executive director.
The move reduces pressure on the business at a time when it has restructured its restaurant portfolio, closing underperforming sites and halting new openings.
But shares in the company were trading 13.2% lower at 9.98p on Friday lunchtime.
At its most recent results, the group booked a pre-tax loss of £11.6 million for the six months to July 1 compared to £9.3 million in the same period in 2017.
Revenue slipped to £23 million from £24.4 million after its performance was affected by unfavourable weather conditions and the World Cup.
Restaurants have had a tough time this year, with rising rents, labour costs and business rates forcing many to close sites. Prezzo, Carluccio’s and Gourmet Burger Kitchen have all shuttered restaurants this year.
Tasty is the second company backed by a member of the Kaye family restaurant dynasty to announce efforts to get on a firmer financial footing this week, after Richoux sold three of its restaurants.
Tasty boss Samuel Kaye’s cousin Jonathan is the founder of Prezzo and chief executive of Richoux, which operates Friendly Phil’s, Villagio and The Broadwick alongside its eponymous grand cafe brand.
Earlier this week, Richoux said it had sold the lease on its Richoux Piccadilly site for £500,000. The location last year made a loss of £10,000.
It also said it had agreed to sell the leases on another Richoux on Gloucester Road and a Friendly Phil’s in Braintree.
Jonathan Kaye said: “Following the strategic review of our estate, we have entered into agreements, subject to satisfaction of certain conditions, to sell the leases to our Piccadilly, Braintree and Gloucester Road restaurants which, if successful, will enable us to focus on the remaining portfolio.”