VICTORIA MASTERSON
DEPUTY BUSINESS EDITOR
SANJAY Majhu hopes to branch into TV cookery, overseas healthcare and online opportunities after selling most of the Indian restaurant business best known for the Ashoka brand.
“I always had a ten-year plan and told everyone that 2015 was the year I sold off the restaurants,” said the entrepreneur, who bought the business from Charan Gill for £8 million in 2005.
“The market wasn’t great for sales and we’ve had to reflect that with a goodwill write-off.”
Accounts for Harlequin Leisure Group filed at Companies House yesterday showed a retained loss of just over £2m. Mr Majhu said this was the result of a £2.4 million goodwill writedown on the sale of six restaurants to their franchisees.
“I was never going to get the money I would have liked for the restaurants,” Mr Majhu said. “Pre-2008 before the crash I could get anything from the banks. But banks don’t lend against leases, so none of the franchisees could raise money from the banks to buy the restaurants – they used all of their own reserves and cash.”
He emphasised that tougher immigration rules were making it difficult to get staff, creating a major problem for the industry.
“The biggest challenge and probably the biggest reason why I’ve decided to sell is that it’s difficult to staff Indian restaurants,” Mr Majhu said. “The government is making it harder to bring in staff from India now. When I first started, you could get a head chef for £17,000 a year. You now have to bring them in at £35,000 a year, and we just can’t afford that. I don’t think people are eating less Indian food. The problem with Indian restaurants is we can’t afford the staff.”
Specialist chefs coming from outside the EU such as tandoori chefs are classified as skilled migrants and must earn must earn annual incomes of £29,570, thousands of pounds more than the average pay for such posts.
Two remaining Ashoka restaurants in Coatbridge and Dundee would hopefully be sold this year, Mr Majhu indicated. He said he had paid off the £2.5 million raised to buy Harlequin in 2005, and that earnings before exceptionals were actually quite good.
“Earnings before interest, tax, depreciation and amortisation were positive at about £300,000,” Mr Majhu said. “But if you’re writing off £2.4 million goodwill, you’re going to wipe everything out.
“It’s given me a living for ten years so I’m happy to let the franchisees get on with it. They’re very happy.”
Mr Majhu said he wanted to focus on rebuilding his healthcare business, but couldn’t give too many details until later in the year. In November Mr Majhu sold five Apple pharmacies to Glasgow-based Honey Pharmacy Group for an undisclosed sum.
“We’re looking to develop other areas in the healthcare business,” Mr Majhu said, adding the potential for overseas expansion to locations such as the west coast of Africa.
“There are a few ideas I’ve been working on for a couple of years that are a combination of things. We’re looking at making new programmes. I’m talking to commissioning editors about cooking shows, and looking at internet opportunities.”
Mr Majhu said he might revisit the restaurant business in future, but in cuisines other than Indian.
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