No Pain, No Gain: A new name, but has Hartford really changed?
Saturday 28 January 2006
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).
Compare with the Independent: See how much you could save by switching credit cards. Compare now
Simon Read: It's time for a clear line on soaring mobile phone charges
You asked for it - here's your praise of banks!
Simon Read: Here are some Budget changes George Osborne could make, but I don't hold out much hope in times of austerity
How to start your own internet business
Plymouth Energy Community's solar share scheme backed by council
- 1 Is your name now 'banned' in Saudi Arabia?
- 2 Best films on Netflix: 32 movies that will put an end to your scrolling
- 3 Istanbul protesters take 'Ellen selfie' from the back of a police van
- 4 Missing Malaysia Airlines Flight MH370: Jet ‘hijacking’ began soon after take-off
- 5 Lady Gaga has struggled with eating disorders in the past, so it's indefensible that she's glamourising bulimia in her SXSW set
Katie Hopkins continues campaign to become Britain's most hated talking head with poorly timed Bob Crow tweet
No EU referendum under Labour: Ed Miliband to reveal that vote on membership is ‘unlikely’ in next Parliament if party wins power
Grace Dent: Who cares if she spells it Barraco Barner? Gemma Worrall is more employable than some bookish arts graduate
Europeans have ‘got whiter’ due to natural selection in past 5,000 years, scientists say
The rise of Ukip: Study warns Labour that Eurosceptic party's electoral base now 'more working class than any of the main parties'
Fracking is turning the US into a bigger oil producer than Saudi Arabia
iJobs Money & Business
£35000 - £43000 per annum + Bonus and Benefits: Harrington Starr: A global lea...
£50000 - £60000 per annum: Harrington Starr: Linux Systems Administrator - UNI...
£32000 - £36000 per annum + generous benefits: Pro-Recruitment Group: * TAX * ...
£37000 - £40000 per annum + £20000 benefits package: Pro-Recruitment Group: **...
Day In a Page
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony
A charming four-bedroom Oxfordshire cottage with oak floors and chunky-beamed ceilings, £465,000
A beautiful one-bed flat in a sought-after portered block, with access to Norland Square communal gardens
A one-bedroom flat within a Sixties school conversion with high-spec design and open-plan kitchen, close to Lambeth North Tube, £435,000
A 17th century four-bedroom house, with open fireplaces, cellar and pool, £600,000
A three-bedroom, coach house with luxury open-plan living space and contemporary breakfast bar
A newly refurbished one-bedroom flat in the heart of Mayfair, close to Grosvenor Square
A charming four-bedroom house overlooking Burleigh Square Park, close to Thorpe Bay
A three-bedroom farmhouse with a large inglenook fireplace and exposed beams
A boutique mews house, set around a central courtyard, with three bedrooms and a private roof terrace
A four-bedroom farm-conversion with three bathrooms and two reception rooms
A two-bedroom detached house with ensuite bathrooms and a sun-drenched decked terrace, £750,000
A modern and spacious two-bedroom, penthouse flat with two bathrooms in a prestigious development
A beautifully renovated five-bedroom terrace with three reception rooms and a courtyard garden, £700,000
A four-bedroom period house which has been extended to provide almost 2,500sq ft of living space, £675,000
A pretty three-bedroom Georgian home with a 22ft drawing room and a master suite with a balcony, £525,000
A substanstial family home with five bedrooms and landscaped gardens in the much sought-after Branksome Park area
A well-presented three-bedroom house with front and rear gardens, close to White City station, £475,000
A handsome five-bedroom house in a sought-after location close to the city centre
A five-bedroom country home with valley views, equestrian stables and 27 acres of land, £725,000
A six-bedroom farm house with separate, detached cottages and 371 acres of land
A two-bedroom cottage with parquet floors, chunky beams and an open fireplace
A three-bedrrom flat with 2,733sq feet of living space, a beautiful private garden and 15 acres of communal grounds
A four-bedroom chalet bungalow with three bathrooms and a spacious garden, £525,000
A two-bedroom flat with an open plan kitchen and two balconies, close to Arsenal station
A Grade II-listed home with six bedrooms, secluded landscaped gardens and views across Hadley Green
A Grade II-listed mansion with two apartments and a cottage, near Gretna Green
A three-bedroom Grade II-listed mews house with vaulted ceilings and roof garden