Nov. 10, 2002
LONDON -- The family behind Ask Central sold nearly £5 million (U.S. $7.9 million) in shares of the company, sparking concerns that the company's pizza profits may be declining despite positive sales reports (See "Ask receives 25% profit boost for first six months of 2002").
According to the Independent, Adam and Samuel Kaye, the two brothers who set up the chain, each sold 1.2 million Ask shares for £1.68 million (U.S. $2.7 million). Their father, Phillip Kaye, a former restaurateur who also helped his sons found the company, sold 400,000 shares for £560,000 (U.S. $891,000). Additionally, Kaye family-owned investment trust, named the Emily trust, also sold 700,000 shares of Ask for £980,000 (U.S. $1.6 million).
Adam and Samuel Kaye now each hold 6.8 percent in Ask, down from 8.1 percent. Phillip Kaye now owns 9 percent.
"This is not the most optimistic sign for the company and shows they don't expect the share price to go anywhere in the short term," an unnamed analyst told the Independent. "The company is entering in to difficult trading territory and can't defy gravity. Ask, however, does have one of the strongest brands in the market and is debt free."
According to the company, the directors had sold their shares to "satisfy strong institutional demand and to satisfy personal tax liabilities."
The Kaye brothers set up Ask with one restaurant in 1993 and took it public in 1995. The chain now includes 140 restaurants around the UK, and it owns the Zizzi pasta and pizza chain.
Ask plans to open 25 new restaurants this year and aims to have 350 outlets by 2004, but analysts are expecting growth to slow in the face of a downturn in consumer spending.
The growth of Ask has contributed to pressure on its rival PizzaExpress, which once dominated the pizza scene in England. PizzaExpress' sales have declined since late 2001, however, and it recently received a takeover bid.