£8m loan gives us room to grow says boss Senior

Dec 2 2009 By Chris Knox, The Journal

NORTH East leisure company boss Bob Senior has secured an £8m loan agreement and is now looking to create a chain of Fat Buddha Asian restaurants and create 180 jobs.

Mr Senior, who heads Newcastle-based Utopian Leisure, has renegotiated the terms of his loan with Barclays after breaching banking covenants last year and is now looking to open restaurants in Newcastle, Leeds and Harrogate.

The original loan, which was due to be paid back in 2011, saw the firm struggle to remain within the financial bounds laid down by Barclays, which technically could have resulted in the bank putting the company at risk by demanding repayment in full.

However, the bank has now drawn up a new 10-year agreement after Utopian cut its debt from £13m to £7m following the sale of four sites – Digital nightclub in Newcastle and the Tokyo chain of bars in Newcastle, Huddersfield and Oldham.

The old loan has now been replaced with the new £8m facility, which Mr Senior believes will allow the company more breathing space to grow its capital and secure the future of its 200-strong workforce.

Under the Utopian Leisure brand Mr Senior operates Sam Jacks Bar in Newcastle, Love Shack nightclub and the Fat Buddha restaurant in Durham, and Box nightclub in Belfast.

However, it is the Fat Buddha bar and kitchen brand that he is most keen to invest in over the next four years to help grow the group’s £10m turnover as he believes there is little profit to be made in traditional pubs and clubs.

With the restaurant in Durham employing more than 60 staff, Mr Senior believes three more sites would create around 180 jobs, brining Utopian Leisure’s total to just under 300.

He said: "Although we operate two clubs and a bar as part of our portfolio, these sites are in prime locations and capture a very specific market.

"For example, Sam Jacks is near St James’ Park football ground and has become a popular location on match days.

"In general, I feel that traditional pubs and clubs have had their day. People want to come out and eat good food as well as have a drink and a bit of a dance should they feel like it, which is exactly what the Fat Buddha caters for.

"Later licences mean that pubs can cater for this market, which has damaged the traditional club scene.

"With the impact of the recession, operators can no longer wait until 11pm to start seeing people come through the door."

Mr Senior has been an important part of the region’s pub and club scene, having previously operated 14 sites in the North East as managing director of Ultimate Leisure, which has since changed its name to Premium Bars and Restaurants (PBR) and relocated its head office from Newcastle to Cheshire.

Mr Senior was at one stage in the running to purchase PBR after it went into administration earlier this year, but was put off by its ever-increasing debts, which had reached £32m as a result of its decision to buying the 13-strong Living Room restaurant chain in 2007.

He said: "I was interested in returning to the business but was put off by the extreme amount of debt that was involved.

"You can’t run a business with that much debt without it coming back to haunt you down the line.

"Under our new agreement, Utopian Leisure is in a much more comfortable position, with levels of debt we can manage."