No Pain, No Gain: A new name, but has Hartford really changed?

At long last Hartford, the London wine bar chain, appears to be ready, willing and able to escape the hangover days which have tormented it for much of the eight years it has been a constituent of the junior Alternative Investment Market (AIM).

Long suffering shareholders, who have seen much of their capital eroded, have reasons to be cautiously optimistic as the group shows signs of emerging as a successful retailer. But they should not get carried way. The business is not yet out of the woods.

I have closely followed Hartford's fall from grace and its revival efforts. For the company almost became a member of the no pain, no gain portfolio. One of my early recruits was an Ofex-traded restaurant group, Montana. It ran upmarket American-style outlets and was regarded as the ideal complement to Hartford, a hyped fledgling making its way in the eating-out business.

Nigel Wray, the serial investor who was then Hartford's chairman, offered £13.7m in shares. At one stage the deal priced Montana at 340p a share. I, grabbing some of the luck any investor needs, opted to sell in the market, thereby resisting the temptation to accept shares and letting Hartford replace Montana in the portfolio. We did not, however, collect 340p a share. Hartford shares quickly showed signs of stress and strain. When I sold the bid price had fallen to 285p, giving a profit of some £2,800.

Since then Hartford has had a sobering time. The highly publicised but ill-starred Pharmacy restaurant at Notting Hill, acquired for £3.4m just ahead of Montana, is no more. And only one Montana restaurant, the excellent Canyon at Richmond-upon-Thames, is still in the group. A move into gastropubs failed to yield much cheer.

New management has battled to overcome the earlier disasters. Stephen Thomas, founder of the Luminar night-club and bars chain, is chairman. James Kowszun, once with the failed SFI pub group, is chief executive. They concentrated initially on bars, particularly wine bars. Their first significant deal was the £4.8m acquisition of the Jamies chain; then came a number of smaller wine bar take overs. In September, just after the group's financial year closed, it undertook its most ambitious venture yet, swallowing Henry J Bean, another US style operation, for £5.8m.

Today Hartford has 44 outlets, mostly in the City and West End of London. The Bean take over took it into the world of franchising and it looks as though it will develop this increasingly popular concept.

In its last year Hartford produced profits of £1.2m. But once interest, tax, depreciation, amortisation and reorganisation costs took their toll the group was £19,000 in the red. Sales were up 10.4 per cent to £13.3m, not a bad achievement in view of the London bombings. In the current year the group seems to be doing well with a record festive income. Turnover this year could hit £20m and although special charges will continue to impact there are hopes it will make a pre-tax profit of around £1m.

With its relative success in the past couple of years Hartford now wants to be a "real" company and is anxious to cast a veil over its less than glorious past. One of the first steps in such an exercise is a new name and Hartford has opted for The Food & Drink Group. It is also tidying up its balance sheet and share capital. It overflows with no less than 545 million shares - mainly a legacy of desperate cash calls and overpriced acquisitions. A massive consolidation is proposed - wait for it, a staggering 136 shares for every one held.

In the past few years there is no doubt Hartford has done the right things. I am not too happy about the new name and I feel the share consolidation is too severe. It must not be overlooked that there are many examples of shareholders losing out when a capital revamp has failed to have the desired effect. Certainly I would not rush to buy the shares, now around a year's peak of 1.25p, while they are still in the penny dreadful class. Hartford, with a stock market value of £6.9m and debts of £9.2m, is still a pretty risky call.

Two current portfolio constituents pleased the stock market. DataCash, an online payments provider, and MacLellan, a support services group, have proffered updates that indicate trading is in line with expectations. But, as expected, shareholders are unlikely to get much joy from publisher Profile Media, which is attempting a creditors' voluntary arrangement (more about my basket case next week).

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

News
people
News
A survey carried out by Sainsbury's Finance found 20% of new university students have never washed their own clothes, while 14% cannot even boil an egg
science...and the results are not as pointless as that sounds
News
politicsIs David Cameron trying to prove he's down with the kids?
News
Businessman at desk circa 1950s
news
PROMOTED VIDEO
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Client Services Manager - Relationship Management - London

    £30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...

    Recruitment Genius: Credit Controller / Customer Service

    £18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...

    Guru Careers: In-House / Internal Recruiter

    £25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...

    Recruitment Genius: Tax Assistant

    Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

    Day In a Page

    Woman who was sent to three Nazi death camps describes how she escaped the gas chamber

    Auschwitz liberation 70th anniversary

    Woman sent to three Nazi death camps describes surviving gas chamber
    DSK, Dodo the Pimp, and the Carlton Hotel

    The inside track on France's trial of the year

    Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
    As provocative now as they ever were

    Sarah Kane season

    Why her plays are as provocative now as when they were written
    Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

    Murder of Japanese hostage has grim echoes of another killing

    Japanese mood was against what was seen as irresponsible trips to a vicious war zone
    Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

    Celebrities call on David Cameron to take more Syrian refugees

    One young mother tells of torture by Assad regime
    The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

    The enemy within

    People who hear voices in their heads are being encouraged to talk back
    'In Auschwitz you got used to anything'

    'In Auschwitz you got used to anything'

    Survivors of the Nazi concentration camp remember its horror, 70 years on
    Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

    Autumn/winter menswear 2015

    The uniforms that make up modern life come to the fore
    'I'm gay, and plan to fight military homophobia'

    'I'm gay, and plan to fight military homophobia'

    Army general planning to come out
    Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

    What the six wise men told Tony Blair

    Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
    25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

    25 years of The Independent on Sunday

    The stories, the writers and the changes over the last quarter of a century
    Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

    Homeless Veterans appeal

    As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
    Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

    Smash hit go under the hammer

    It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
    Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

    The geeks who rocked the world

    A new documentary looks back at origins of the computer-games industry
    Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

    Belle & Sebastian is taking a new direction

    Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea