Four words. That’s all it takes David Page to explain why investors backed his new venture Clapham House Group to the tune of £15m when it floated as a cash shell in October 2003.
“We’d done it before,” he says, shrugging with obvious satisfaction. Page, and co-founder Paul Campbell, formed the company weeks after agreeing exits from Pizza Express. They floated on AIM one month later. The idea was simple: buy three profitable emerging restaurant chains at the three to five-site stage and expand them. The sell was even simpler: Page’s experience. If there’s one thing investors value it’s market knowledge and a proven track record. When it comes to expanding restaurants, Page has both in abundance.
Earning a crust
‘Knowing a business from top to bottom’ is a claim CEOs like to make but few can justify. Page is one of those few. Well, almost. He actually got to know the restaurant trade from bottom to top – and a little by chance. Expelled from grammar school for spending the summer term lounging by a friend’s swimming pool and then sacked from his first job as a cartographer for refusing to wear a tie, Page’s early rebellion led him to the kitchens of Pizza Express as a dish cleaner.
The three years spent there part-time while training as a teacher taught him one thing: he didn’t want to be a teacher. Fortunately, Page’s employer had noticed where his true talents lay – even if he, by then, hadn’t. He offered Page the opportunity to run one of his restaurants for him. “It was better than teaching and paid more money,” recalls Page. “He gave me 15% of the profits, a good salary and taught me the rudiments of being a small businessman.”
The partnership proved a success, but after five years helping grow someone else’s business he wanted to do it for himself. A second mortgage and a loan of £6,000 secured him a Pizza Express franchise in Chiswick. Over the next decade, Page established a portfolio of restaurants, which included, after buying-out his former employer, 14 Pizza Express franchises, under the company name of G&F Holdings. By the end of the 1980s, he’d built a turnover of around £5m and cash profits of £1m.
“I had a knack for running restaurants, making customers happy and choosing sites,” says Page. “All my restaurants were successful and had 20% profit margins.” But he had his eyes on bigger things. When the original founders of Pizza Express decided to sell in 1992, his opportunity to join the big league appeared. As the major Pizza Express franchisee, Page’s G&F Holdings was absorbed into the newly aquired Pizza Express company and floated on the stock market in February 1993.
Page was appointed CEO of the group by new owners Luke Johnson and Hugh Osmond and oversaw a period of spectacular growth, with the issue share price of 40p rocketing to a high of £9.50. “It’s not often that the shares go up more than 20-times so it was quite an exciting ride,” admits Page.
Exciting, but not, Page insists, as personally profitable as most would imagine. “I put every single penny into the business and there was no room for error. When we floated it I was technically a millionaire but I had negative equity in my house. I didn’t own anything other than a lot of paper that said I was a millionaire.”
Despite a decade of almost sustained success, it was perhaps this which fuelled Page’s enthusiasm to reinvest some of the profits he made from the eventual sale of Pizza Express, which, by that time had seen its share price drop to a less-frenzied figure. At around £3 a share, Page insists the buyers got a “very good purchase” – not that he stopped to dwell on it. As he had been 20 years earlier, Page was more interested in putting the experience gained to good use in a new venture.