Financial Debt of Pizza Hut Franchise Owner in UK Before Emergency Takeover
Pizza Hut's UK Parent Company on the Brink Before Rescue
Looks like the UK's Pizza Hut chain had a close call before being saved. The company responsible for operating those beloved pizza joints, Heart With Smart (HWS), was on the verge of owing over £50 million before its miraculous rescue.
The lifeline came in the form of an entity controlled by investment firm Directional Capital in January, managing to save all but one Pizza Hut location. Interestingly, HWS was previously the brand's main partner in Denmark and Sweden, and its dine-in franchise partner in the UK.
The pre-pack administration, overseen by Interpath Advisory, marked the end of a two-month rigorous hunt for new investors for the company. This rescuenot only saved more than 3,000 jobs nationwide but also brought a sigh of relief to pizza enthusiasts across the UK.
Prior to its rescue, HWS was the proud owner of Pizza Hut franchises, following a management buyout worth £100 million in 2018. Before that, the Pizza Hut franchise belonged to private equity firm Rutland Partners.
Now a new document filed with Companies House by Interpath Advisory sheds light on the substantial debt faced by HWS. According to this filing, the business had a massive shortfall of £53.1 million, with £31.5 million owed to Pricoa Private Capital, £8.3 million to Pricoa Capital Partners, and £8.3 million to unsecured creditors.
In August, City AM reported that the parent company of Pizza Hut and KFC, Yum! Brands, posted a significant turnaround by surging back into the black after a successful year. The group's European division reported a remarkable pre-tax profit of $317.1 million for 2023, as compared to a pre-tax loss of $300 million the previous year.
The following month, City AM also revealed that the European arm of Pizza Hut had managed to return to the black after posting a loss of nearly $140 million. Despite these challenging times, it seems Pizza Hut is still standing tall and delivering those delicious pizza pies to hungry customers across the UK.
The business troubles of Heart With Smart (HWS), the company responsible for Pizza Hut's UK operations, were seated firmly in the intersection of industry, finance, and business. Undeniably, HWS was grappling with a debt of over £53.1 million, with considerable portions owed to Pricoa Private Capital, Pricoa Capital Partners, and unsecured creditors.
