- 40% of the top 50 have attracted private equity
- 90% of the top 10 are food-based
- rapid growth is not confined to small operators
Ed’s Easy Diner grew its profits faster than any other privately-owned UK eating and drinking out market, according to this years’ Zolfo Cooper Profit Tracker. At 127% compound EBITDA growth, it clearly beat Hawksmoor, which came second with 106.2% growth. Third placed Bill’s Restaurants delivered 84.8% growth.
The Profit Tracker, produced in association with trade business journal M&C Report, is an annual list which highlights the top 50 companies with the fastest-growing profits within the sector over a three-year period. The full list, plus commentary, is included in the Zolfo Cooper Profit Tracker 2014.
Ed’s Easy Diner
Ed’s Easy Diner is a retro-styled American diner concept which underwent a management buy-in in 2009. Since then Ed’s Diner has grown from three sites to 24 diners, four Ed’s Shakes ‘N Dogs, an Ed’s Outside and a Shake Stand in the UK plus international sites in South Africa and plans for further franchises overseas. It also has plans to grow its estate to over 100 sites by September 2018, with 15 openings planned for this financial year.
Operator-led market
Paul Hemming, partner at Zolfo Cooper, said: “In an operator-led market, the Zolfo Cooper Profit Tracker provides clear evidence that the sector continues to create innovative concepts with attractive margins and grade-A management teams. Private equity investment is clearly associated with successful roll-outs, enabled by not only additional finance but also non-executive and other expertise. With an economy which is largely accepted to be in recovery and expected to grow by 3% (ONS) this year, we can expect to see growth accelerate.”
The role of private equity in growth
The tracker investigates the role of private equity in fuelling bar and restaurant growth. Analysis shows that 40% of those in the top 50 are making use of private equity investment, while 28% are privately owned, 24% are family owned (more than one generation) and the remaining 8% are subsidiaries of overseas companies or conglomerates.
Food leads the way
As in previous years, food-led businesses dominate the list. Last year’s winner, BrewDog, was the only drinks-based business in the top 10 and it retains that distinction this year. Many of the drinks-based businesses can be found between 30th and 50th positions and the Tracker examines possible reasons for this.
Size and age don’t matter when it comes to rapid growth
Fast growth isn’t just the preserve of small companies as nine of the top 50 businesses have annual turnover in excess of £100 million. Nando’s has turnover of £485.2 million and still manages growth of 28.6%. It has appeared in the Profit Tracker in each of the three years in which it has been published.
This year’s top 10
1 Ed’s Easy Diner
2 Hawksmoor
3 Bill’s restaurants
4 BrewDog
5 Tortilla
6 Wasabi
7 Le Bistrot Pierre
8 Leon
9 Pho
10 Itsu
Further analysis and commentary can be found in the Zolfo Cooper Profit Tracker 2014 report. Click here to read the full report.