Las Iguanas founder joins Tampopo
MANCHESTER-based restaurant chain Tampopo has recruited the founder of the successful Latin American casual dining chain Las Iguanas as its newest investor.
Ajith Jaya-Wickrema has already joined the board of Tampopo and intends to become a significant shareholder as part of the company’s latest £1.8m fundraising.
Managing director David Fox said that the company, which has previously been through some early-stage funding rounds via the government’s Enterprise Investment Scheme, has posted a circular to existing shareholders offering them the opportunity to take up shares in its latest funding round.
However, he anticipates that not all of them will and that Sri-Lankan Mr Jaya-Wickrema would be able to buy into the business. Mr Jaya-Wickrema co-founded Las Iguanas in 1991 but stood down from a full-time post last year after completing a £27m sale to a management team backed by Bowmark Capital in 2007.
“It suits him perfectly as it’s not a full-time role and he has been through three sale proceeds with venture capital companies. We’re hoping that he can help to bring us through the same process,” said Fox.
Tampopo is an Asian canteen-style chain which is looking to raise additional funds to open more restaurants. The company currently has six outlets in Manchester (x3), Leeds, Bristol and Reading.
Fox said that the company’s ongoing expansion efforts would focus on the South East – particularly on city centre sites or shopping centres with high levels of footfall.
“The South East is generally considered to be more resilient.”
He said that successful restaurant chains have typically needed to prove that they can work both within and outside London to be developed, although he believed the London market has greater advantages due to the higher number of tourists and fewer public sector workers.
“I firmly believe that this will work in London,” he said.
The company is forecasting revenues for the year to June 30 2011 of £6.8m and pre-tax profits of £240,000.
However, Fox said that the market remains tough and that the UK’s tax regime makes it difficult for restaurateurs to make a profit.
He argued that the VAT rate increase which is set to be introduced in January is likely to shave £120,000 off its bottom line, stating that it would be difficult to pass on price rises to consumers as the casual dining market has become increasingly competitive.
“We can only charge what our customers can afford. They can get two meals for a tenner at Marks & Spencer including a bottle of wine and they’ll only pay VAT on the booze.
“People say the VAT rise is only 2.5% so it won’t have that much of an impact, but it will cost JD Wetherspoon £25m a year. It affects businesses.
“If I’m paying 30p in every £1 directly to the government how will that incentivise me to get out of bed?”
