Rockpool owner loses $288 million under a high debt load
It’s has been a tough year for hospitality operators and issues are being felt from the smallest restaurant in the local High St, to empire owners.
Pacific Hunter is the latest to convey its struggles, with the Rockpool owner reporting a $288 million loss for the year under a high debt load.
The once-thriving hospitality empire, has faced significant challenges. Born from celebrity chef Neil Perry's iconic Sydney steakhouse, Rockpool, the group expanded to include renowned brands like Spice Temple, Sake, Fratelli Fresh, El Camino Cantina, and Beerhaus.
However, financial difficulties led to the closure of 16 venues during the 2023-24 financial year and a staggering $76 million loss in 2022.
In a dramatic turn of events, Metrics Credit Partners, a major lender to the company's previous owner, Quadrant Private Equity, assumed full ownership and control in October 2023. This takeover came as the company struggled with a debt burden exceeding hundreds of millions of dollars.
To stabilise the business, Metrics has provided an additional $20 million credit facility with an 18-month term.
Despite this injection of capital, the company remains heavily indebted, with current and non-current loans and borrowings totalling $420 million. The overall liabilities are even higher.
“The group experienced a loss … mainly as a result of the write-off of goodwill and deferred tax assets and impairment of brand value.
The group was in a net liability position of $439 million,” the company’s directors said in the report.
The company has been burdened with a significant debt load, including loan notes carrying a hefty 15% annual interest rate, compounded quarterly.
Despite the challenging economic climate, marked by soaring inflation and rising living costs that have ravaged the hospitality industry, Pacific Hunter bucked the trend. Sales surged in the 2023-24 financial year, climbing from $209 million to $298 million.
However, the company's increased revenue was offset by higher expenses. Payments to suppliers and employees jumped from $198 million in the 2022-23 financial year to $304 million in the subsequent year. As the hospitality industry continues to face economic headwinds, the future of this once-mighty empire remains uncertain.
‘The group has conducted a strategic review, implemented various measures such as closing unprofitable venues, and initiated cost-saving actions across the business,” the company’s directors said in the report.
Jonathan Jackson, 17th December 2024
