Forte may sell Harvester

Click to follow
HARVESTER, the public house and restaurant chain owned by Forte, the hotels and restaurants group, could be sold as part of a rationalisation plan. Forte confirmed yesterday that the sale was one of a range of options being considered.

If the sale goes ahead it could fetch Forte pounds 120m, although the group yesterday dismissed that figure as speculative.

'We are reviewing the future of Harvester,' a Forte spokesman said. 'The sale is one of the options but no final decision has been made. As part of the review process we are talking to a number of potential purchasers.'

The Harvester chain of 79 outlets has made its name as a family restaurant attached to traditional public houses. Forte has had ambitions to extend the brand - at present concentrated in the South-east - nationwide, but because the cost might prove prohibitive in view of the group's debt burden of pounds 1.1bn it is looking at other options, including a joint venture with one of the other pub retail groups or an outright sale.

In his statement in the group's last report and accounts Rocco Forte, chairman, said: 'Our priorities over the next 18 months to two years are a reduction of the debt, maximisation of the profitability of existing assets and the disposal of those assets which are underperforming or do not form part of the core business of the group.'

In the accounts, published in April, Forte reported that Harvester faced particularly challenging conditions in 1992. ' Discretionary spend in the South-east, where most Harvesters are located, was under considerable pressure and competition was intense,' the group said.

'Harvester responded with the development of new menu items, TV advertising and some very effective promotions with business partners with the result that sales and profits improved. The management structure at Harvester was revised in 1992 to provide a flatter organisation with fewer levels of management.'

In the last financial year, ending January 1993, Forte reported pre-tax profits of pounds 72m compared with pounds 70m a year earlier. The group cut its final dividend from 7.16p to 4.75p, the first cut for more than 20 years, making a total dividend payout of 7.5p against 9.91p a year earlier.