No pain, no gain: Fishworks shows that fins ain't what they used to be
Saturday 10 November 2007
The growing taste for eating out has produced some rich returns for many restaurant chains. The No Pain, No Gain portfolio has enjoyed success with its three forays into the dining business, and would be happy to add to what has so far been a profitable menu.
But worries that many of us are tightening our belts as dearer money reduces leisure spending are floating around. There has been some evidence that consumers are cutting back, although the impact on restaurants is far from clear.
Most of the stock-market companies that offer eating-out facilities, ranging from restaurants and bars to hotels and pubs, have in recent years established envious profit records and their shares, until the spending doubts surfaced, have romped ahead.
Fishworks, running a chain of about a dozen seafood outlets, is, however, one that missed the boat. Sales have been quite encouraging, but as far as profits go it has failed to deliver. During its seven years on Plus and then AIM it seemed to hold out the promise of great success. Yet, as investors' cash was swallowed, profits remained elusive. Last month, it served up its biggest loss – £1.5m. Dividends remain a distant dream.
What went wrong? Overexpansion, that old enemy of many aspiring businesses, has much to do with the disastrous record. There are also suggestions that some outlets may not have been in ideal locations. And financial controls may not have been strong enough.
The shares have suffered. A year ago, they were around 50p – as I write, the price is 7.625p.
Yet the concept, many observers believe, should work in this still affluent age of eating out and health consciousness. It is not so distant from the successful recipe adopted by Carluccio's, the Italian restaurant and delicatessen group. Fishworks is not, of course, wedded to Italian fare; it supplements its seafood restaurants by such activities as selling fresh fish and holding cookery classes.
The succulent appeal of Dover sole and roasted skate has certainly encouraged investors. When Fishworks arrived on Plus, it raised £483,000. At the time of the AIM flotation in 2005, £4.4m was pledged. Earlier this year, with the group in urgent need of fresh funds, £2.5m was pumped in. At the same time there was a boardroom shake-up.
Gary Ashworth, a recruitment entrepreneur, became chairman, and in his wake a new finance director and then chief executive arrived. Ashworth, together with Luke Johnson, the Channel 4 chairman, put up much of the rescue money (at 6p a share) and they now account for about 33 per cent of the capital.
Johnson has impressive restaurant credentials with PizzaExpress and upmarket London eateries to his name. Ashworth, too, has restaurant interests. Mitch Tonks, who started Fishworks when he opened a fishmongers in Bath in 1994 and added a restaurant in the rooms above a few years later, remains a director and still plays a major role.
The newcomers are expected to make sweeping changes. Overheads have already been cut, and a review of operations is being undertaken. But, as last month's results indicate, even in the current benign restaurant climate, Fishworks has a long way to go.
At 7.625p, the chain and its wholesale fish arm are capitalised at only £5.7m (compared with sales of £10.7m), and with its intriguing formula, the shares could appeal to investors prepared to fish in the more speculative waters of the stock market.
The presence of the rescuers offers encouragement, and I would not be surprised if Fishworks eventually prospers. However, I would not invest until some positive signs emerge.
The portfolio currently embraces just one restaurant share – Prezzo, running Italian-style eateries. Its shares, as the continuation of the eating-out feast is questioned and small caps in general give ground, have fallen from 94p to around 70p.
Other restaurant constituents in the portfolio have been La Tasca, acquired by Robert Tchenguiz and rumoured to be returning to quoted life as part of an enlarged group, and Montana, now part of the Food & Drink Group.
Despite the share price fall, the portfolio is still comfortably in the money with Prezzo and has scored hits with La Tasca and Montana. However, there was an element of luck with the latter company; its American-style concept was subsequently abandoned, and FDG now largely concentrates on the Jamie's and Henry J Bean bars.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Jo from Northern Ireland was less than impressed by Russell Brand's attempt to stage a publicity stunt
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
Shock poll shows voters believe Ukip is to the left of the Tories
New era of cheap oil 'will destroy green revolution'
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Ukip founder Alan Sked and Nigel Farage 'begged Enoch Powell to stand as a candidate'
Ukip candidate jokes about 'shooting peasants' in racist and homophobic rant
iJobs Money & Business
£40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...
£45000 - £55000 per annum + Benefits: Ashdown Group: An exciting opportunity h...
$125 - $175 per annum: Carlton Senior Appointments: Senior Wealth Manager In...
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
Day In a Page
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
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