SEAGRASS HUNGRY TO WIN SUPPORT
SEAGRASS Boutique Hospitality, one of the nation’s largest owners of restaurants, has slumped to a $14.6m loss in the 12 months to June 30 despite revenues rising to $144.3m.
In documents lodged with the corporate regulator, Seagrass said a poor economic outlook and difficult operating conditions had created uncertainties about its survival without additional financial support from its shareholders.
Seagrass was acquired by Sydney private equity outfit Crescent Capital Partners in a $100m deal in 2019.
It operates several chains including The Meat & Wine Co, the Ribs & Burgers brand and high-end steakhouse 6 Head.
It also owns the local master franchise rights for the Five Guys burger chain, which it has been rapidly expanding, and runs the Hunter & Barrell restaurants in Australia and Dubai.
Seagrass lost $9.6m in the 2021 financial year.
The accounts, lodged on Monday, show revenues increased from $121m in the
2021 financial year to $144.3m, while personnel expenses rose from $51.4m to $66.5m. However, there was also a significant rise in finance costs, which increased from $9.3m to $11.1m in the 12-month period.
The company owes more than $58m, the accounts note, and was in breach of its debt covenants as of June 30. It owes banks $13m.
“The ability of the group to pay its debts as and when they fall due … is dependent upon the group achieving sustained profitability, generating adequate cash flow from operations, ongoing support from shareholders and returning to compliance with banking covenants,” the filings read.
“To address this, the directors have received formal confirmation from shareholders that they remain supportive of the business, that loans due to them will not be called for a period of at least 12 months and that additional funding would be provided if required.”
Seagrass is run by Bradley Michael, who earlier this year outlined significant expansion plans for the business.