Restaurant group shares plunge on profits alert
Friday 18 April 2003
Shares in Hartford, the pubs and bars group that owns the Damien Hirst-designed Pharmacy restaurant in London's Notting Hill, lost nearly one-third of their value yesterday after it issued a profits warning.
The group said "increasingly difficult market conditions" had offset progress made in overhauling its estate since it acquired the City of London-based bars chain Jamies last September. Its shares fell 29 per cent to 0.62p, valuing the company at just over £3m.
Investec Securities, its house broker, reduced its pre-tax profit forecast for the full year to zero from £700,000.
James Kowszun, the chief executive, said: "The market is the worst it's been for 30 years and I actually think we've doing quite well." Mr Kowszun was formerly finance director at SFI, the disgraced pubs group.
Hartford, which owns 22 outlets – all but one of which are located within the M25 – said the operational integration of Jamies was "substantively complete". It said gross margin on food and drink had improved and wages and variable costs had been reduced.
Mr Kowszun said Pharmacy was still making a loss but the addition of a chef, menu and management team meant it should become profitable "in the next month or two". Mr Hirst is still a small shareholder in the group.
Hartford said that as long as trading conditions did not deteriorate further, its continuing operations should make a profit this year. "The board remains confident of the medium-term prospects for the group," it added.
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