New gastro pubs and restaurants are driving a 42% increase in the number of restaurants, pubs and bars seeking to raise funds from investors under the Enterprise Investment Scheme (EIS) in the last year, according to Radius Equity, the specialist provider of EIS and SEIS investments.
Radius Equity says the number of restaurants, pubs and bars looking to raise funds through the Enterprise Investment Scheme (EIS) jumped to 85 this year, up from 60 in the previous year*, as more restaurants and gastro pub businesses seek investment to capitalise on increased consumer spending.
The EIS is designed to encourage private investment in unquoted companies through generous tax breaks.
Gary Robins, Director at Radius Equity, says: “In light of the improving economy, many consumers are feeling a little less guilty about spending their cash on a nice meal or a weekend break. Investors are keen to capitalise on consumers’ growing confidence and see restaurants and gastro pubs as good investment opportunities.”
“Gastro pubs in particular are continuing to prove popular, as consumers turn away from fine dining. Some now have Michelin stars and famous chefs. Consumers appear to be increasingly happy to pay for the premium products they offer.”
Famous gastro pubs include TV chef Tom Kerridge’s ‘The Hand and Flowers’, the only UK pub to be awarded two Michelin stars, and winner of Masterchef 2012, Anton Piotrowski’s Treby Arms in Sparkwell.
Gary Robins says: “Gastro pubs and restaurants can provide great returns for investors as skilled chefs can add significant value to relatively inexpensive ingredients, and of course rents are much cheaper for gastro pubs which tend to be away from traditional restaurant hotspots like Mayfair and the West End.”
Gary Robins says: “We are helping two chefs to raise £2.4 million through the EIS scheme. They were previously chefs at St. Johns and Jamie Oliver’s Fifteen restaurants, and are planning a Michelin standard dining room in East London. EIS is a great way for SMEs to access funding which isn’t readily available to them through the banks, whilst investors gain generous tax breaks through financing interesting new projects.”
The EIS was expanded in 2012, when the Government made the scheme available to larger businesses and dramatically increased the annual fundraising limit for businesses to £5million, meaning more businesses can raise more funding for their growth.