Casual Dining Group (CDG) shelled out £112m to expand its estate through acquisition last year, its annual accounts reveal.
The group, which owns Bella Italia and Café Rouge, stumped up £23m for La Tasca and a further £89m to buy Las Iguanas.
The La Tasca deal saw it take over 42 restaurants in the UK and four in the US. Its intention was to retain and develop the strong core of the Spanish dining chain’s brand and convert non-core locations into other fascias. The US business was not considered part of the core estate and was sold in September last year.
The group reported that, as of May 2016, 16 out of the 42 La Tasca restaurants had been converted with “significant improvement” in trading performance.
Meanwhile, CDG received £89.9m of new investment from its shareholders to support the acquisition of Las Iguanas and the continued development of the group.
Following the acquisitions, the group has reorganised its infrastructure and integrated the two businesses into the wider operation. Proposed synergy benefits, principally in streamlining central costs and obtaining procurement benefits, have been realised, it said.
In July 2016, CDG changed its principal provider of distribution services for food and beverage during the period, resulting in significant efficiencies and cost reduction. It said that further opportunities exist for additional procurement savings as pre-existing contracts come up for renewal.
The acquisitions certainly provided a huge boost to sales. Turnover at the firm for grew to £303m, with a £86.3m contribution from Las Tasca and Las Iguanas, and £216.7m from new site openings and like-for-like growth of existing brands.
Bosses said the firm incurred substantial costs during the period, specifically associated with a financial restructuring, acquisitions and new roll-outs and refurbishments. These costs impacted the results, giving rise to operating profits before depreciation and amortisation of £15.9m.
CDG invested £21.1m of capital in the creation of new sites during its last fiscal year, including the launch of 18 Bella Italias, one Café Rouge and one Concession. A further £12.2m was invested in the refurbishment of the estate.
All sites have now received capital investment since 2014, meaning ongoing refurbishment activity is anticipated to reduce to “more normal levels” this year.
During the period, CDG also underwent a financial restructure. Back in December 2015, it entered into a £160m senior facility agreement in addition to a £25m revolving credit facility to refinance third party borrowings of £90.75m outstanding as of May 31 2015 and provide further funds for the development of the group.
Casual Dining Group consisted of 286 restaurants as of May last year, up from 197 the year before.
“Following the financial year end, the group has continued to open new sites and has plans to expand all of the group’s main brands as well as its concessions and international franchising activities,” the directors said.