Guy Hands misses out as Terra Firma scraps its dividend

The buyout baron was forced to forgo his annual dividend last year

Guy Hands, whose Terra Firma Capital sold £20m in property (Bloomberg Finance)

The buyout baron Guy Hands missed out on a multimillion-pound windfall last year after a slump in profits at his private equity group Terra Firma forced him to forgo his annual dividend.

The City deal maker, known for his love of fine wines, may have to settle for cheaper plonk this year after the annual payout was scrapped for the year ending March 2015.

Terra Firma, which is totally owned by a company called London 58 Ltd, controlled by Mr Hands, paid out dividends of £3m in 2014, £3m in 2013 and £3.5m in 2012.

The last time Terra Firma failed to pay up was in 2011, although this followed a £12m windfall the year before.

The private equity firm was founded by Mr Hands in 2002 after he spun out a division of the Japanese investment bank Nomura, where he worked.

Accounts filed on Tuesday by the owner of Odeon Cinemas and Four Seasons care homes show profits fell to £1.86m in the year ending March 2015, from £2.23m in the same period last year.

Turnover – comprised of investor fees and earnings from the companies owned by Terra Firma – fell to £28.3m from £34.2m . Wages were also slashed across the group from £25.8m to £20.4m. It employs 86 staff.

The group donated £270,000 to charity.

Terra Firma hit the headlines last year after a debt crisis engulfed Four Seasons, leading to cost cuts and the sale of scores of care homes.

It has struggled to find a niche as US private equity giants such as Blackstone and Carlyle have pushed into the UK and continental Europe. The former Sainsbury’s boss Justin King came on board as vice-chairman last year, triggering speculation that the company would start acquiring retailers.