Story of the day:
McMullens – investment plans threatened by tax burden: Hertford-based brewer and retailer McMullens has reported that the current tax burden has “forced the company to consider its investment plans”. Managing director Peter Furness-Smith said: “Even before the latest inflation busting increase in duty and a new tax on gaming machines, around a third of our sales goes straight to the Exchequer in the form of tax, which increased by more than £2m over the previous year. This means that we hand over to the Exchequer over three times as much in tax as we make in profit. Even more incredibly we pay the government over 20 times more than what we pay out in dividends to the investors who risk their capital investing in our pubs and the local economy. This is clearly not conducive to stimulating investment and growth, let alone creating employment opportunities.” The comments came as the company released figures showing turnover up by 3.5 per cent to £60.8m in the year to 1 October 2011 compared with the 53 week period in 2010. Profit before tax and exceptional items increased from £5.9m to £7.4m. “Profit growth was largely the result of a good performance from our managed pubs, in particular recent acquisitions, and the phasing of our pub repair programme which resulted in a lower spend than in 2010.” Total sales in managed houses were up 5.8 per cent with like-for-like sales up 2.5 per cent. Like-for-like sales in managed houses are 3.7 per cent to the end of March – but have dropped back to 1.2 per cent after a very challenging last ten weeks, largely due to the disappointing weather. Furness-Smith, whose company has signed up in support of the Jacques Borel campaign to reduce VAT in the hospitality sector, added: “A substantial reduction in VAT for pubs is needed to help reverse the trend of cheap supermarket alcohol being consumed in unsupervised environments by encouraging more socialising in pubs. This in turn would lead to the creation of many more jobs and is estimated would quickly generate more revenue for the treasury”.
Thwaites to pay £11.9m to exit hedge contracts: North-West brewer and retailer is the latest company to be hit by interest rate swaps. The company is forking out £11.9m to end £50m of swap contracts. In 2009, it had £75m of fixed interest rate swaps where it was paying the difference between LIBOR and the fixed rates for a period of up to 22 years. The company said: “During the last financial year the structure of these financial instruments resulted in the fixed interest rate swaps increasing to £95m, on which interest of £2.9m was paid in the year. Due to the continued turmoil in the financial markets and the adverse impact upon the valuation of our swap contracts, we have undertaken a review of our longer term funding requirements, including the costs of the new brewery and have taken the decision to pay off swap contracts that are not highly likely to be used against future borrowings.” The company made a pre-tax profit of £6.7m (before exceptional items), down 4.3 per cent, on turnover of £137.2m, up 8.3 per cent in the year to 31 March.
Propel Opinion: Not unlike Mitchells & Butlers, Thwaites took out swaps in 2006 (M&B was only a year later) in the belief that interest rates would climb. The opposite has happened in the wake of the financial crash of 2008 and companies have been left nursing serious hangovers. The £11.9m amounts to the profits produced by the hard work of the entire staff at Thwaites for two full calendar years.
ALMR to meet PPL in early July: The Association of Licensed Multiple Retailers will meet PPL early next month in an attempt to reach an agreement on music licensing fees. PPL had proposed increases in fees which would have seen costs increase tenfold over a three-year period. Intensive lobbying has secured a freeze in rates but only until 2013. The next round of discussions are likely to fall on how the rates and tariffs are set and particularly on the use of “choice modeling” in determining rates. If PPL fails to reach an agreement with the industry then the proposed increases can be referred to the Copyright Tribunal. PPL licence fee income grew seven per cent to £153.5 million in 2011.
Two lattes a day good for you: Researchers have concluded that two lattes a day may help prevent heart failure. The new study has found moderate consumption can protect against heart failure by 11 per cent. Habitual coffee drinkers may develop a tolerance to caffeine, decreasing the risk of high blood pressure. Regular coffee drinking has also been linked with a lower risk of type 2 diabetes. Excessive coffee drinking – five or six cups a day - has no benefit and may even be dangerous, researchers concluded.
Beer duty escalator e-petition tops 60,000 signatures: The e-petition aimed at forcing a parliamentary debate on the beer duty escalator topped 60,000 petitions yesterday morning. A total of 100,000 signatures are needed to force a debate in the House of Commons.
Co-operative formed to run classic inter-war York pub: A co-operative has been formed to run The Golden Ball in York’s Bishophill area, regarded as having the most complete inter-war layout of any pub in the city – it was re-modelled in 1929 and left unchanged since. Residents living near The Golden Ball, in Bishophill, have formed a co-operative and will next week launch a share-issue to buy a ten-year lease on the pub. Locals can buy shares at £500 each but at least 51 per cent of shares must be owned by people in York.
CGA – closures edge down to net 13-a-week: On-trade market information firm CGA has reported that pub closures have edged down by two a week. The closure rate for the first three months of 2012 stood at net 13 – compared to 15 the previous year. Meanwhile, pub openings have increased from 14-a-week to 21, though total closures per week have risen from 29 to 34.
Martin blasts Euro (again): Tim Martin, founder of JD Wetherspoon, has renewed his attack on the Euro – he campaigned against Britain joining the single currency a decade ago. In the current edition of Wetherspoon News he states: “It’s distressing to observe attempts by the Eurocrats to subvert democracy in pursuit of their cause in countries like Greece and Spain and to see another generation in Europe falling for the pseudo-intellectual Blarney of the euro, a successor to the disastrous totalitarian philosophies of the 19th and 20th centuries. Current attempts to shore up the wretched currency centre on imposing economic rule from Brussels and depriving the Greeks, Spanish and Portuguese of democratic control of their own economy.”
London Evening Standard features BII Licensee of the Year: The London Evening Standard has reported the personal story of current BII Licensee of the Year Mahdis Neghabian – and how she turned The Camden Eye pub from a drinking den used by Hell’s Angels to a £20,000-a-week turnover success story. The pub, operated by Peter Linacre’s New Pub Company, offers a range of world food as well as live music, theatre, open mic comedy spots and life-drawing classes. She said: “I had threats and some dodgy moments and I had to bar a lot of people, but I just held my ground. Once the clientele was sorted, we started attracting new types of people and it all took off from there.”
Town Centre Restaurants goes through pre-pack: Town Centre Restaurants, which operates Café Giardino, Azzurro and Auberge brands, has undergone a pre-pack administration in which 17 of its 39 sites have been left in administration. Accountancy firm Zolfo Cooper was appointed in November to advise Town Centre Restaurants on strategic options for the business. The prepack administration came three days after rent was due for the third quarter of the year. Town Centre Restaurants made a £5.98m pre-tax loss for the year to 30 January 2011. Town Centre Restaurants’ chief executive Mark Winter said: “We hope that through this restructuring and new investment we can take the business forward and deliver sustainable growth again in the years ahead.” Bank of Scotland Corporate backed a £16m deal to take the company private in 2004. Gresham Private Equity acquired the business for £48m in 2006.
Ponti’s Italian Kitchen wins recognition for high customer feedback ratings: Ponti’s Italian Kitchen, specialists in Italian cuisine from the Emilia Romagna region, has received a TripAdvisor Certificate of Excellence award. The accolade, which honours hospitality excellence, is only given to establishments that consistently achieve outstanding reviews. Currently, just ten per cent of businesses listed on TripAdvisor have received the prestigious award. To qualify for the Certificate of Excellence, Ponti’s Italian Kitchen had to maintain an overall rating of four or higher out of a possible five, as reviewed by travellers. Additional criteria included the volume of reviews received within the last 12 months.
Marston’s (and Travelodge) lose out in Newquay: A plan by Midlands based Marston’s to open a site at Trevithick Manor in Newquay looks to have hit the buffers. Marston's won planning consent for a restaurant pub at the start of the year – but site owners Kingsley Real Estate said they have scrapped the proposals. Project manager John Marshall told The Cornish Guardian: “We have decided to drop the pub element of the secured planning permission as we do not feel it is needed on the site. There is already a public house close by and plenty of establishments already in the town centre.” Marshall told the newspaper that he “was not sure” that Travelodge would develop the 60-bedroom hotel planned for the site. Meanwhile, Marston’s has set an opening date of autumn for a new build pub restaurant in Gainsborough, Lincolnshire to be built off the A631 Thorndyke Way and opened a new site, The Smithfield Bell, in Welshpool yesterday.
Customer – more and more JD Wetherspoon pubs “looking tired”: A JD Wetherspoon customer has written to complain to the company that “more and more of your pubs are looking a bit tired”. The customer, a Mr Lyons from Yorkshire, added: “(They’re) not bad and generally above the competition but the little details, like broken tables or dirty loos, which you would never see at Wetherspoon, are increasingly common. I think it’s great in these hard times to read in your magazine about all of the new pubs which you are opening but might it be worth thinking about diverting some cash by not opening one or two pubs and spending it instead on some paint and a little TLC on your existing pubs?”. Chairman Tim Martin said: “We’ve spent about £37m on repairs and £40m on refurbishments of existing pubs in the last year so apologies if a few have slipped the net. External vigilance is required – and our philosophy is CQSMA, which stands for Cleanliness, Quality, Service, Maintenance and Atmosphere. We need to walk the walk as well as talk the talk, though.”
Collyer – Greene King will learn a lot from Realpubs and Capital: Deutsche Bank analyst Geof Collyer has spotlighted the performance of some of the pubs Greene King acquired in its Capital Pubs and Realpubs deals last year. He reported that The Crabtree in Hammersmith, a Realpubs site, has achieved like-for-like growth of 15.6 per cent since acquisition and is taking £40,400 a week on average while The Angelsea Arms, South Kensington, a former Capital Pub Company site, has seen like-for-likes rise 8.2 per cent to boost takings to £32,300 per week. The Maynard Arms, Crouch End has been converted to the Realpubs format and has seen a 171.6 per cent uplift to £22,600 average takings per week. He said: “The plan with the Locals divisional structure is to further differentiate the pubs in the ‘Premium Local’ category by creating a new Metropolitan Pubs division that will encompass not just the 47 pubs acquired in the two London deals but also seek to transfer around 20-30 other pubs to this format. We would expect the Greene King operational management to learn a lot from these two teams – RealPubs, in terms of food focus, and Capital, in terms of wet focus. The Maynard’s best average weekly turnover under Greene King ownership was £13,000, whereas since its refurbishment, it has achieved a best week of £36,000, which is not bad, given the focus of the capex was to materially improve the gardens. Although struggling with the inclement weather, The Crabtree (sitting on the River Thames with a huge beer and food garden) has recorded a weekly high of £76,000 when the sun shone.”
Sizzling Pub Company names UK’s most selfless mum: Sizzling Pub Company, the brand owned by Mitchells & Butlers, has reinforced its family dining credentials by running a competition to find the UK’s “Most Selfless Mum”. 53-year-old East Midlands mum of two Rose Pond won the title this week after a national search. Victoria Jupe, Sizzling spokeswoman, said: “We are a family brand and wanted to champion mums across the country and give them something back. At Sizzling Pubs, we believe that mums have a lot on their plates so the prize is the perfect excuse to put her feet up.” Rose won £100 of Sizzling Pubs vouchers.
Bar Sports opens in Croydon today: Bar Sports, the franchised sports bar offer overseen by Scott Murray, opens in Croydon today. A site in Loughborough re-opens in August with a Southend site to follow on at month later. The original Bar Sport business went into administration in 2008 but Murray bought the company out of administration in 2010.
Spirit sells two Yorkshire sites: Managed operator Spirit has sold two sites in Yorkshire. The company has sold the freehold of Spencer's, near to the city’s railway station, to Michael Chamberlain of business recovery firm Chamberlain & Co. Chamberlain intends to relocate his Leeds office to the upper floors of the property. Elsewhere, Spirit has sold the freehold of The Fox in Stockton on the Forest near York. The property, a traditional village pub, was sold to London Ebor Developments after the previous tenants had closed the business at the end of last year. The York-based purchaser is hoping to use some of the land to the rear of the existing pub for a small residential development and find an operator for the pub. Agent for both deals is Collier International.
Camp & Furnace opens in Liverpool: A new concept Camp and Furnace has opened in Liverpool Baltic Triangle. Part-bar, part-eatery, part-event space, the Greenland Street destination has been developed to accommodate a variety of uses from large scale conferences to club-nights, photography shoots and pop-up restaurants. Miles Falkingham, director at Camp and Furnace, said: “We’d all enjoyed a decade or so of going to festivals and wondered what it would look like if we took all of the best bits and brought them together under one roof. It was massively important to us to retain that outdoor aesthetic, we wanted to keep that feeling of being in a field with your friends, but in a city centre location.”
Orchid pub managers pitch trading ideas: Orchid Pub Company managers have taken part in a Dragon’s Den style beauty parade of trading ideas in front of chief executive Rufus Hall. These included introducing takeaway food at the Living Room brand, starting a Rock Idol competition and ideas to improve the Diamond Club loyalty programme for older customer. In his blog, Hall said: “Brilliant presentations all around and a common theme in every single one: all of the sales/marketing initiatives had social media at their heart. Whether we like it or not Twitter, Facebook and databases will be an integral part of successful businesses going forward.”
UK’s best fish and chip shop operator to open Express unit: Seniors Fish & Chips, whose outlet in Thornton, Lancashire, is current UK fish and chip shop of the year, is to open its first Seniors Express in Bispham, a sit-down diner format. Seniors Fish and Chips has three sites at the moment.