Boost for Treasury as RBS set to pay a dividend of £1bn Cafe collapse takes Johnson deal off menu

THE scandal at Patisserie Valerie has already lost him millions of pounds and damaged his credibility as one of Britain’s top entrepreneurs. Now the controversy appears to have starved deal-hungry Luke Johnson of yet another restaurant chain takeover.

The Mail on Sunday understands Johnson was set to gobble up a sizeable stake in trendy Italian restaurant chain Polpo – before pulling out of a deal when Patisserie Valerie collapsed.

Polpo has six restaurants in London and one in Brighton. The chain was founded in 2009 by Russell Norman, the former operations director of The Ivy owner Caprice Holdings, and his friend Richard Beatty.

The company has been suffering in recent years and was forced to close several outlets.

Despite making a pre-tax loss of £2 million on revenues of £14.3 million in the year ended March 2017, the company paid £280,000 in dividends to Norman and Beatty. They have collected more than £2.1 million in dividends since 2013.

Polpo’s accounts for 2018 are now overdue. The company did not respond to requests for comment.

Johnson had been eyeing Polpo via his private equity firm Risk Capital Partners.

Patisserie Valerie, which Johnson bought through Risk Capital Partners and then floated on AIM in 2014, collapsed into administration last month after uncovering a £40 million fraud. ROYAL Bank of Scotland is tipped to announce a £1 billion dividend payout this week in a major boost for shareholders – and the taxpayer.

Analysts expect the bank – bailed out by £ 45.5 billion of taxpayer money in 2008 – to unveil a special dividend of 3p per share on top of an ordinary dividend of 6p per share in its annual results on Friday.

That would put the Treasury, which holds 62.3 per cent of RBS shares, in line for a £675 million windfall.

The dividend would be only the second RBS has announced since the financial crisis. In October, the bank paid £240 million to investors as an interim dividend.

Next Friday’s results will take the total returned to shareholders for the year ending December 31, 2018, to £1.3 billion – with the Treasury’s share amounting to £827 million.

RBS has started returning money to long- suffering shareholders after returning to profit in 2017 and settling its mortgage mis-selling charge with the US department of Justice in May last year.

The lender has also passed the Bank of England’s most recent stress tests, meaning it is seen as able to withstand a severe economic shock without another bailout.

As well as the dividends payout, the bank is also set to confirm £ 335 million bonus payments to staff, it was reported yesterday.

Investors will be looking out for any further updates on plans to buy back shares from the Government.

Chancellor Philip Hammond has committed to privatising RBS by 2024, and l ast week t he bank secured consent from minority shareholders to reduce the Treasury’s stake to 60.3 per cent. However, RBS bosses still need the all- clear from the Government before launching the buyback.

Some analysts have suggested the current share price could present a hurdle. The Government last sold its shares at £2.71 and RBS’s share price closed on Friday at £2.39.

Ian Gordon, banking analyst at Investec, said: ‘My assumption is a share buyback won’t happen until the share price is some way north of where it is today. I don’t think the Government is a willing seller at this price. My belief is that it will happen at some time this year.’

But Shore Capital analyst Gary Greenwood said: ‘Given that it’s in the Budget, Hammond’s probably under a bit more pressure to sell. It’s a little bit silly in a way for the Government to sit around and hope that the share price might get better. Depending on what happens with Brexit, it might get worse.’

The bank’s cost base will also be in focus, with some analysts predicting total operating costs to fall 7 per cent from £ 10.4 billion to £ 9.7 billion. The bank has been slashing hundreds of frontline staff as it closes high street branches, but thousands of jobs have also been axed in other parts of RBS.

Alison Rose, who runs RBS’s commercial and private bank and is widely- tipped to succeed Ross McEwan as chief executive, has reduced headcount in her division by 23 per cent since 2016, with 2,200 people losing their jobs.

In November, RBS said it had cut costs in the unit from £1.9 billion in 2016 to £1.7 billion in 2018.