Endless finds winning recipe as it exits West Cornwall Pasty Co

PRIVATE equity house Endless has exited the West Cornwall Pasty Co after finding a winning recipe for the business.

It has sold it to Ginsters owner Samworth Brothers, which has taken on the 33 wholly-owned outlets, 19 franchised outlets, and Aylesbury head office. The value of the deal has not been disclosed but Enact has said it delivers a 5.5x return to investors.

Endless bought the business in April 2014 for £136,000 after it had entered administration. The deal, which was the first from its SME fund Enact, saved 230 jobs.

Chris Peck, executive chairman at West Cornwall Pasty Co said:
“We recognised the unrealised potent strength of the brand back in 2014, despite the business having seriously lost its way in the very competitive food-to-go market.

“With Enact and Endless’s backing we have been able to establish the brand as one of the ‘best in the class’, serving the travel, leisure and sports market and have positioned the business to exploit a very exciting growth plan over the next three years.”

Prior to administration, West Cornwall Pasty Co had been struggling with loss-making, underperforming stores and the effects of the ‘pasty tax’, which was implemented by Chancellor George Osborne in an attempt to simplify the taxation of hot takeaway food.

But within two years the business has improved its EBITDA – a measure of profitability – by £1.8m, and into operational profitability.

Its most recent accounts, for the year to March 2016, showed a 7.6% rise in like-for-like sales, with revenues reaching £13m.

Chris Cormack, investment director at Enact said: “The attraction at the was the strong brand but we felt the strategy of the business needed to change. We refreshed the brand and the store estate.

He added: “Having been involved since our initial investment in West Cornwall Pasty Co we are delighted to have seen the transformation and growth of the business that has seen us exit to Samworth Brothers.”

The Enact fund was set up as an EIS Fund to provide funding to SMEs of up to £5m and its investors include Danny Mills. It has since received further funding from Endless and its existing investments include Excelsior Technologies, Stirling Dynamics, Kesslers and WHP.