Yates Group snaps up Santa Fe chain

Yates Group has bought the seven-strong Santa Fe restaurant chain for £3.55m, plus the assumption of £2.5m in debt. Sante Fe, which has two sites next door to Yates's Ha! Ha! Bar & Canteen brand, specialises in New Mexican and American south-west cuisine.

The acquisition is part of the Yates strategy of buying restaurant brands with a high percentage of wet sales in the turnover mix. Last year, Yates bought the Forno Vivo pizzeria in Tring, Hertfordshire. Since then Yates has increased the profit margin by 10 percentage points on wet sales at the site thanks to its buying power.

Yates chief executive Mark Jones said: "Sante Fe sites take £25,000 net a week ­ they punch well above their weight. There's a 50-50 food and drinks mix, which we like because we can apply purchasing synergies against the drinks sales. Sante Fe is very similar in ethos and shape to Ha! Ha! Bar & Canteen, which has a 60-40 sales split in favour of food."

Sante Fe sites produce about £200,000 in earnings annually each, producing a unit level total profit of around £1.2m last year.

In the 52 weeks ended 27 June 2004, however, Sante Fe Group reported a loss of £58,000 on a turnover of £8.115m. Jones added: " We'd like to grow Sante Fe. I've already seen two new sites where it can sit next to Ha! Ha! Bars. We're serious about growing and there are other things on our radar."

Existing Sante Fe sites are located in Reading, Berkshire; Brighton, Sussex; Portsmouth, Hampshire; Birmingham; Blue-water, Kent; and Nottingham.