Gordon Ramsay’s food empire revealed nearly PS12m in losses, and cut around 300 employees because of closures and restrictions in the covid-19 outbreak as Ramsay’s businessman warned about the impact that soaring costs of inflation and rising prices for dining out in restaurants.
The celebrity chef operates or owns a stake 35 restaurants across the UK including Petrus, Bread Street Kitchen and the restaurant Gordon Ramsay and three at the Savoy and has license agreements for another 13 restaurants around the world.
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The most recent company accounts of Gordon Ramsay Restaurants show that his business had a pre-tax loss of PS6.84m through the August 31st, 2021 following the PS5m loss during the same timeframe in the previous year, which also included the first few months in the outbreak.
The year before, Ramsay said his restaurants were suffering tens of millions of pounds of revenue loss due to reservations being cancelled because of coronavirus.
The latest accounts of companies reveal the financial stress the hospitality industry has experienced as of the PS26.2m in profits that Ramsay’s restaurant have made in the last financial year , less than half of the PS54.7m they earned prior to the pandemic ravaged the country in the year 2019.
Through the year to the end of August 2019, the company earned PS15m in earnings. Since Ramsay is the sole controlling entity, Ramsay effectively earns what the company earns from post-tax profits. This was PS11.9m in the year 2019.
The company stated that, since february, the time when final restraints on the hospitality companies have been lifted England following the first Omicron outbreak, its restaurants have been thriving. Omicron type, the establishments were able to return to profitability, and the sales had been “consistently ahead of pre-pandemic trading”.
But, with budgets of households continue to be squeezed by the rising cost of energy and inflation reaching an all-time high of 40 years The company has warned of a challenging trading environment in the coming months.
“The Covid-19 pandemic had a significant impact on the group for a second year, and there are new risks to consider associated with inflationary pressures and consumer spending,” the report said.
The financial statements indicate that the restaurant group is able to withstand a possible 20% drop in sales, which is the similar amount that it experienced in the first Omicron outbreak, which lasted from the end of November until February without causing cash shortages or breaching credit covenants.
Ramsay has also referred to the coronavirus job retention program to pay PS6.5m to assist staff over the last two years, as well as another PS524,000 of “local government support grants” last year.
The financial reports also reveal that the number of employees was cut between 914 and 622 between the month of August between 2020 and 2021 when the company sought to reduce millions of dollars from its wages during the pandemic. Nearly all the losses were staff from restaurants.
Gordon Ramsay Restaurants, which is a company with PS23.7m of debt net. It as well as PS13.7m on bank credit backed by the group as well as “personal guarantees”. The financial statements reveal that, as of August of last calendar year Ramsay was able to provide PS10m of personal guarantee during the course of two years of the pandemic.