Antony Worrall Thompson – back in service
When his restaurant business went into administration at the beginning of the year Antony Worrall Thompson must have been tempted to sit back and rely on his TV and writing work. In fact, he's back in the kitchen seven days a week. Janet Harmer reports.
On the day I call Antony Worrall Thompson to arrange our interview he is up to his elbows cleaning the deep-fat fryer. Two days later, when I arrive to see him, he has just completed a busy lunch service in the kitchen of the Greyhound pub in Rotherfield Peppard, Oxfordshire, where he will be back behind the stove co-ordinating dinner shortly after I leave.
It has been a long time since Worrall Thompson took such a hands-on approach in one of his restaurants and certainly it is not how he expected he would be filling his days at the age of 58. But with his company, AWT Restaurants, being one of the major hospitality casualties of the recession, needs must.
Despite what has undoubtedly been a hellish year in the life on one of the UK's most high-profile chefs, Worrall Thompson, as ever, is determined to come out fighting. "I suppose I had hoped to be thinking about my retirement by now - which I imagined I would spend my days writing - but I'm not one to sit back and say poor me," he explains. "I'm determined to get on and make this work. I'm a bit of a scrapper and that is the way I will always be."
Worrall Thompson is talking about the reopening of the Greyhound in mid-July, which, together with six other businesses - Notting Grill, Barnes Grill, Kew Grill, Windsor Grill, Windsor Larder and the Lamb Inn in Henley-on-Thames - had been forced to close when AWT Restaurants collapsed into administration in February 2009.
Immediately after the company was put into administration, he bought back Kew Grill, Windsor Grill and Window Larder for £210,000, personally financed by himself, long-term business partner David Wilby and friend Nicky Stephenson.
Now he has resurrected the Greyhound by paying a nominal £1 for the lease - "there was no value to the business in this economic climate" - and spending £70,000 on decorating the interior and exterior, as well as doing up the garden. Antiques and paintings from his attic have been used to enhance the decor.
Eventually Worrall Thompson would like to purchase the freehold of the 17th-century property, enabling him to expand and improve the building further. There are currently no plans for further restaurant openings, although he hints that he would be keen on setting up a restaurant in Spain in his semi-retirement.
SALUTARY LESSON
For now, though, he knows he needs to concentrate closely upon the four businesses he controls, having learnt a very salutary lesson from the demise of AWT Restaurants. While it was the refusal of Lloyds TSB Bank to provide a £400,000 loan that ultimately led to the company going into administration, Worrall Thompson admits that he contributed to its failure by having taken his eye off the ball in the day-to-day running of the business.
AWT Restaurants had never relied on loans and instead had used an overdraft facility of £250,000, as and when it was needed. "We spent half the year in the red - usually when we bought a restaurant or had just paid the VAT - until we built up funds again and went into the black," Worrall Thompson explains. "I thought we were being thrifty and the bank never advised us to do anything different."
In May 2008, the company bought the lease of the Windsor Grill and a delicatessen, the Windsor Larder. By October, with the credit crunch beginning to bite, AWT Restaurants, which at the time employed more than 100 staff, still had not recouped the money from the new additions to the business. To compound the problem, the company, enticed by competitive charges, had switched banks - from Barclays to Lloyds TSB - in May. "In hindsight, that was probably a mistake as I had banked with Barclays ever since I started my career and that long-standing relationship might have helped us when the chips were down," Worrall Thompson says.
"We went to Lloyds TSB in December to ask for a loan of £400,000, saying that we had identified £120,000 of cuts we could make and were willing to sell two restaurants. They wanted a personal guarantee for the loan, which I was not prepared to give as there was plenty of equity in the businesses."
ADMINISTRATION
AWT Restaurants was forced into administration with debts of £800,000, half of which Worrall Thompson believed could have been recouped if the business had been allowed to carry on trading. As well as large unpaid bills for VAT and PAYE, the administrator's report lists a total of 174 individuals and companies which are owed money.
While a number of disgruntled suppliers have voiced their anger over unpaid bills to the national press, Worrall Thompson says that 85% of them are continuing to supply him today.
"If a company decides not to supply me again, then I understand, but I have said that I will be happy to pay cash on delivery. While I'm sympathetic for the suppliers, I'm not that sympathetic, as we're not talking about huge sums of money here and they can write off 40% of the bad debt against profit. Most of the suppliers have made a considerable amount of money out of me for 10 years or so. They have to remember that it is business after all and when you supply people in business you take a gamble."
Another, Alan Wells of The Fresh Olive Company in North London, says that he is also very happy to supply Worrall Thompson again, despite being owned £2,113.80 by AWT Restaurants. "There really is no point in looking back, particularly in the current economic climate," he says. "It makes far more business sense to continue to do business with him. What has happened to Antony can happen to anybody."
While Worrall Thompson is angry that Lloyds TSB put the final nail in the coffin of AWT Restaurants, he readily speaks about his failure to keep control of standards and wastage. "I would check the weekly figures and go into the restaurants from time to time, but it was not enough. I was rarely on the stove. I rode the crest of the wave for so long, but the problem with that is that the wave has got to crash at some time."
On clearing out the restaurants after they had closed, Worrall Thompson was appalled at the wastage and overstocking he discovered. "Five- or six-litre drums of floor cleaner were being stored, when floor cleaner should be something you buy as you need it," he says. "Another restaurant had six bottles of Cinzano, when it was unlikely to get through one bottle in a year. I had taken my eye off the ball and have learnt a very painful lesson. It's all very well swanning around and giving people an occasional wave when the reality is that customers actually want to see you physically involved in the business."
Now at the Greyhound, Worrall Thompson is running a very tight ship. Taking the laundry in-house is just one example of cost-cutting. "Previously we were spending £1,000 per restaurant on laundry each month. Now I'm operating the washing machine daily."
He is also currently on the stove seven days a week - something he has not done since opening Notting Grill in 2000, while his wife, Jay, works both in the kitchen and front-of-house. Worrall Thompson is also keeping a close eye on Kew Grill and Windsor Grill, although he is very happy that each establishment is being run by a good chef and manager. Wilby, meanwhile, is based at the Windsor Larder.
When it comes to raw ingredients, there is no compromise on standards. "I'm using the same high-quality butcher as before - Aubrey Allen - but now we offer two steaks instead of seven." Keener, daily purchasing will ensure no food wastage.
AFFORDABLE
The menu at the Greyhound is now intended to be more affordable, with the likes of ploughman's and sandwiches ranging in price from £3.50 to £5.95, lunchtime specials such as fish, chips and mushy peas at £7.50, and Tuscan slow-cooked pork belly and mash costing £12.95 and Scottish rib-eye steak at £16.95 for dinner. While anyone can come in for just a pint of beer or bowl of pasta, customers choosing to eat more formally are spending around £15 at lunch and £30 at dinner, with wine.
With the recession resulting in customers cutting their eating out back to Friday and Saturday nights, Worrall Thompson has cleverly introduced a series of marketing initiatives to encourage business through the door throughout the week. "Hopefully they will get people talking, as well as bring people in."
Customers can bring their own wine on Monday, senior citizens receive 20% off their bill on Tuesday, free coffees are available with food on Wednesday, Thursday is lucky dice night, when each table is given one roll of the dice with a roll of one receiving £20 off the bill, ladies who lunch on Friday are given a 20% discount, a Saturday draw offers a prize of a £50 voucher for mid-week dining, and the proceeds from a £1 per ticket raffle on Sunday is split between the charity Help for Heroes and a selection of six food and drink prizes.
SEPARATE COMPANIES
There is no doubt that Worrall Thompson is making ever effort to ensure that the Greyhound and the other three businesses will succeed this time. Each one is now being run as a separate company, so if one experiences difficulties it won't pull the others down.
It does not necessarily make financial sense for Worrall Thompson to be doing what he is currently doing - his main income these days is from his TV work, writing books and a weekly column for the Daily Express, merchandising and public appearances, while the largest annual income he took out of AWT Restaurants was £8,000.
"I suppose it's a bit like a drug: you know you shouldn't be doing it, but you keep being drawn back for more," he explains. "I get great pleasure from seeing people happy and enjoy themselves. And I'm certainly not afraid of hard work. I might have lost a bit of my speed and energy, but the talent and skills are still there."
THE ADMINISTRATOR'S REPORT
The official report into the administration of AWT Restaurants highlights three main reasons for the demise of the company:
1. The expenditure on the two premises in Windsor and costs of the relevant leases put inordinate strain on the company's borrowing facilities.
2. The company did not respond swiftly enough to the downturn in activity resulting from the credit crisis and recession.
3. The combined effect of the rising price of ingredients and over-staffing in certain outlets meant declining margins which, coupled with falling demand, meant that profits in the final year were modest. As a result, there was insufficient cash-flow and overdraft facilities to pay creditors by the end of January 2009.
Worrall Thompson is currently cooking seven days a week - something he has not done since opening Notting Grill in 2000
ADMINISTRATION - KEY QUESTIONS AND ANSWERS
There is much confusion as to why and when a company is put into administration. Here, Bernard Harrington, managing partner of BHG Chartered Accountants and Insolvency Practitioners and the administrator of AWT Restaurants, answers some key questions about the administration procedure.
At what point would it be advisable for a business to go into administration?
Bernard Harrington Administration is an alternative to liquidation in circumstances where there is some reasonable prospect of preserving a whole or part of the company's business as a going concern. It can be instigated by the company and its directors or by the company's bank.
What can be done by a restaurant or hotel to avoid going into administration?
BH For unprofitable businesses, some form of insolvency procedure can really only be avoided by introducing new equity finance, restructuring to return to profit or reaching some form of binding arrangement with creditors. If none of these is possible, administration or liquidation are the only options.
What does administration entail?
BH Administration is the modern-day equivalent of receivership. The administrator is appointed to protect the company and its assets. He will appraise the situation and may take the view that the best outcome for creditors would be achieved by continuing to operate the company under his control. During that period, he will look to find buyers for the whole or part(s) of the company. Typically, the purchaser will take over employees in order to ensure continuity of operations. The process is intended to last not more than one year and it is often possible to dispose of the business within a few weeks. Having done that, the administrator will realise the company's remaining assets and deal with its creditors.
What happens to the assets of the company?
BH They are sold for the best price that can be achieved. In almost all cases, the assets are worth more in situ than in a forced sale, hence the objective of disposing of the company as a going concern.
What happens to the creditors?
BH After meeting the costs of the administration, any remaining funds are distributed to the creditors pro rata. In most cases, the company's bank and employees who lose their jobs have priority over trade suppliers. This means that it is rare for those suppliers to receive more than a very small proportion of what is owed to them.
What happens to the staff?
BH The position of employees who lose their jobs in insolvencies is protected in that the claims they can bring against the company under the Employment Rights Act 1996 are met, subject to certain limits, in the first instance by the government. If the administrator is unable to preserve their employment through a sale of the business, they will be made redundant and will receive a statutory redundancy payment, again funded by the government.
Are there any guidelines for a person whose company has gone into administration for starting up a new business?
BH There is no legal restriction on a director's ability to start a new business. Directors of insolvent companies can be the subject of disqualification orders which prevent them acting as directors of other companies for some years and there are other rules which restrict the choice of trading names for new companies. There is current concern over the widespread use of "pre-pack" administrations, in which the directors of the failed company often buy back some or all of the assets and carry on trading through a new company - as Antony Worrall Thompson has done. This is perfectly legal and can often be shown to be in the best interests of creditors, although they may not see it that way!
www.bhginsolvency.co.ukor contact Bernard Harrington at:bernard.harrington@bhgllp.com
