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Morning Briefing Strap Line
Tue 30th Oct 2012 - Domino’s UK, Enterprise and Wetherspoon

Story of the day:

Fleurets – tenants having to get creative to get landlords to consent to sub-let: A property agent has outlined the creative ways in which tenants are having to work to get landlord consent to sub-let. Fleurets senior associate Graham Campbell said sub-letting has become complicated in the current market because landlords may need to get consent from their lenders to allow tenants sub-let, especially when it is at a lower rent. Campbell said: “It is our experience that some lenders have used this as an opportunity to review the terms of the borrowing arrangement and command payments from the landlord, or renegotiate terms (in their favour), if the loan-to-value requirements have been breached. Accordingly some landlords have become very wary about alerting their lenders of changing market conditions impacting on their asset values and possibly giving rise to breaches of loan to value conditions. The result of all this is that tenants, in some cases, are having to become more creative in how they address the terms of the subletting to achieve landlord’s consent.” Campbell reported that Fleurets has recently sublet a property at 25 per cent of passing rent - the property had been highly rented as a result of a sale and leaseback and had been closed for many years. He said: “So as not to alert the landlord’s bank (a specific concern of the landlord), the subletting was agreed at the passing rent, but with a side agreement entered into by the tenant and subtenant to cover the rental shortfall. This agreement was by no means straightforward and there were many other implications on both tenant and subtenant, the result of which was that the transaction from start to finish took 19 months. Another example of how we overcame the same problem of subletting below passing rent, was to offer an extended rent free period to the subtenant to cover the rental shortfall. In this case, the passing rent was £100,000 per annum and the market rent for the property was £75,000 per annum. To overcome the rent shortfall of £25,000 per annum, which amounted to £125,000 over the five-year period to the next rent review, the subtenant was offered a 15 month rent-free period. These are difficult times we live in and as agents trying to assist clients exit their onerous leases, market conditions force us to be creative and innovative to help them achieve their objectives.”

Free Report: The Association of Licensed Multiple Retailers (ALMR) and CPL Training have teamed up to commission a free report on the key foodservice trends in Europe. The report, written by Propel Info managing director Paul Charity after a visit to the European Foodservice Summit in Zurich, looks at the companies and sectors that are out-performing in Europe and has insight and analysis from some of the world’s top operators. To receive a free copy, e-mail Paul Charity on

ALMR National Restaurant Show Study Tour in Chicago opens for bookings: The Association of Licensed Multiple Retailers (ALMR) has opened its study tour to the National Restaurant Association Show in Chicago in May 2013 for bookings. Next year’s visit takes place between Thursday 16 May and Monday 20 May. The ALMR launched its first study tour trip to the NRA show this year, with the trip led by Propel Morning Briefing managing director Paul Charity. The NRA draws 58,000-plus industry professionals from all 50 states and 100 countries, all seeking the newest innovations and up-to-the-minute information about trends and issues. The ALMR trip provides: insights from industry experts on the rise in fast-casual dining, social media, new and emerging brands, menu development, staff management and a host of other issues – with 70 free education sessions; involves a tour of Chicago’s hottest concepts and a market overview briefing sessions from US experts. ALMR chief executive Nick Bish said: “Our first trip in May this year was a tremendous success with our attendees reporting they had benefited enormously from the visit to the Show and the chance to study the key trends in the innovative US market.” Paul Charity, managing director of Propel Info, said: “The NRA show is a fantastic opportunity to find fresh inspiration and understand the emerging trends shaping the fast-changing US market.” To book a place, e-mail Jo Charity on or call her on (01444) 810304. Places are limited.

Industry news:

Accountant reports top-end independent pubs show sales growth in line with Peach Tracker: Trade accountant Roslyn’s has reported that its top-end independent pub clients produced average sales growth of 2.65 per cent in the year to August 2012, which is in line with the Coffer Peach sales tracker. Clients in Scotland and the north east shows the greatest increase of 6.54 per cent year-on-year followed by the M1 corridor with a 3.89 per cent increase, a 2.75 per cent increase in the South (generally south of M4) and a small decline in the North West of 0.82 per cent. The information is from clients with Roslyn’s for a year or more, from all types of agreement, freehouse, tenancy and leased, and trading styles - wet only, wet-led and wet and dry. Managing director Martin Roslyn said: “Our clients are achieving results akin to managed houses in terms of sales growth, which underlines the importance of good quality, reliable management information provided in a timely and regular fashion.”

Burger King pays maiden dividend: Burger King has reported a better-than-expected quarterly profit as new items on the fast-food chain’s menu and accompanying advertising campaigns helped boost like-for-like sales in the United States and Canada. The company, which went public in June, initiated a quarterly cash dividend of four cents per share. The US and Canada saw like-for-like sales rise 1.6 per cent in the quarter, driven by Burger King’s Summer BBQ and chicken offerings.

Bradford retains Curry Capital of Britain title: Bradford has retained the Curry Capital of Britain title. The city hung on to its title by the narrowest of margins after receiving the same number of points from the judges as Glasgow. The title went to Bradford because the city received a higher number of votes in the public poll. Organiser Peter Grove said Bradford was “Curry Central - they eat, sleep, breath and export curry and it is part of the city makeup.” The four restaurants representing Bradford this year were Shimla Spice, Aagrah Shipley, Zouk and Akbars.

Nottingham pubs and clubs send out “No Jimmy Saviles” on Halloween message: Pubs and clubs in Nottingham have sent out a clear message that anyone “tasteless and disrespectful” enough to dress as Jimmy Savile on Halloween will be turned away. Stonegate Pub Company’s Yates’s, in Long Row, has already turned away one Savile impersonator. Deputy manager Charlotte Cordon said: “We feel it is very inappropriate as Yates’s is a family venue in the day and we don’t want people to be offended by what has happened and therefore lose custom on the basis. It is completely unacceptable to be making jokes about this situation and anyone attempting it will be refused entry and service.”

PASS commissions research on door supervisors: PASS, the national proof of age accreditation scheme, has commissioned a research project to understand how door supervisors can best verify the age of young adults. The research is being carried out by CGA Strategy, which will conduct both qualitative and quantitative research with door supervisors across the UK. The research project has been sponsored by Diageo, Heineken, AB-Inbev and Stonegate Pub Company. It is anticipated that the research will be completed before the end of the year and published in early 2013.

Oliver Letwin – minimum pricing is experimentation: Minister of State at the Cabinet Office Oliver Letwin MP has described minimum unit pricing as a piece of “experimentation” in terms of trying to influence people’s drinking habits. Speaking at the Alcohol in Moderation (AIM) Conference, Letwin argued that there is “dynamic between the government and the media which reduces everything (in the alcohol debate) to a level of crudity whereby experimentation is limited”. On excessive consumption, he added: “There is no one answer and so we are trying a broad manner of things. We could, in theory, raise the minimum price to a level, which makes it impossible for any but the extraordinarily rich to buy but people would find a way round it. Similarly, it can’t be too low as it wouldn’t have any effect. Minimum pricing is an effort to achieve a subtle behavioural effect.”

Company news:

Domino’s teams up with Lionsgate to offer movie delivery: Domino’s UK has teamed up with Lionsgate UK, the leading independent film entertainment studio, to become the first UK company to deliver movies alongside pizza with its new Domino’s Pizza Box Office service. Customers can now order pizza and a whole host of popular films online via Domino’s website. Customers can choose from a range of pizza and movie deals and confirm the order to receive a code to begin the film download - the movies are then streamed direct through a PC/MAC, mobile and tablet. Domino’s Pizza Box Office features the films for streaming rental at the same time as they are released for hire on DVD, meaning customers can watch films weeks before they are available on other subscription services. Films will be continually added to Domino’s service. Simon Wallis, sales and marketing director for Domino’s, said: “Everyone knows that pizza and film are a match made in heaven and with our new Domino’s Pizza Box Office, there are even more good reasons to stay in and watch a great movie while you enjoy a piping hot pizza. We pride ourselves on offering a vast choice when it comes to pizza and the same is true of Domino’s Pizza Box Office - whether you’re into action, horror or rom coms, there’s something for every pizza eating occasion. With us now delivering both the pizza and the movie, there’s never been a better recipe for a top night in!” Guy Avshalom, chief operating officer, Lionsgate UK, said: “We are delighted to be working with Domino’s on this innovative new service and look forward to bringing our new releases and cult classics to pizza eaters in their homes across the country.”

Hall & Woodhouse reports two pubs acquired since the year-end: Dorset brewer and retailer Hall & Woodhouse has reported that it has bought two pubs since its financial year-end in January. The company has added sites in Bristol and Milford-on-Sea – and has also signed an option on a site in Melksham. Hall & Woodhouse opened a new £5m brewery in the year. Chairman Mark Woodhouse said: “We are extremely proud to have opened our new brewery, which has secured the future of brewing in Blandford for the next 100 years.” Hall & Woodhouse has made a profit of £5,666,000 on the sale of assets in the past five years.

Faucett Inn reports £17.2m turnover: Faucett Inn, London the multi-site operator headed by Steve Cox, has reported £17.2m turnover from its 22 sites. Managing director Steve Cox told Pub and Bar magazine: “We’ve bought and sold maybe 40-45 bars over the years. We’ve moved from tied leaseholds, to leaseholds to freeholds now. The company has organically grown to where we are currently, which is 22 sites.”

Collyer – we think dividend reinstatement key area of contention between M&B management and shareholders: Deutsche Bank analyst Geof Collyer has argued that dividend reinstatement and how quickly the company can reinvest the proceeds of the 2010 wet-led estate disposal are the “key areas of contention between some of the shareholders and management” at Mitchells & Butlers. He said: “Maybe the outcome of the pension triennial review will have an impact on this matter. After all, the board would not want to reinstate the dividend payment if it was unable to maintain the cover or indeed be unable grow it, once reinstated. Still questions surrounding corporate governance It would be helpful for the group if the corporate governance situation has finally calmed down, although the two largest shareholders still own more than half of the group’s equity, with Elpida adding around seven million shares to its holding recently. This has probably reduced its average in-price to somewhere close to the current M&B share price. Certainly, the new chief executive and new senior operating management team that have emerged following last year’s major restructuring could do with some much-needed stability on the main board to enable them to concentrate on making the new divisional platform work.”

Mash to open London site, the first overseas, with 50 per cent discount: Danish restaurant brand MASH - Modern American Steak House – is have a soft opening on 2 November when it opens its Brewer Street site in London, its first overseas restaurant opening. There will be 50 per cent discount through to 12 November. With five restaurants in Copenhagen and two outside the Danish capital, MASH was co-founded by Danish sommelier and restaurateur Jesper Boelskifte and his four partners.

Oliver Peyton plans assault on Panera Bread territory: Restaurateur Oliver Peyton is planning to emulate the success of US concept Panera Bread to roll out a bakery and café concept at up to ten sites in the next year. Peyton, who is judge on The Great British Menu and is best-known for his 1990s opening Atlantic Bar & Grill, has secured funding for the project and will now expand the bakery concept beyond concessions and into high-street retail space. Peyton said: “We’ve got lots of shops planned. Ideally we’d like to open between six and ten next year.” Everything at the bakery would be fresh, from the fig rolls and game pies to Victoria sponges and hand-made breads. The majority of sites are likely to be in London, though Peyton said he was in talks about venues outside the capital.

Collyer – not much chance of dividend growth at JD Wetherspoon: Deutsche Bank analyst Geof Collyer has claimed that there isn’t much chance of dividend growth at JD Wetherspoon. He said: “The main disappointment for us from the final results in early September was that despite the significant reduction in the opening programme, the group is likely to be cash flow negative this year after the rollout but before any share buybacks. After adjusting for the timing issues on working capital and other, and on a post rollout, pre-dividend basis, we are forecasting cash neutrality for 2013. So there does not seem much chance of the dividend growing. We think the shares need upgrades to kick on from here, but this is unlikely so early in the new financial year.” 

InnBrighton to re-open third London pub; announces date of micro-brewery official opening: InnBrighton, the 50-strong Brighton-based multiple headed by Gavin George and Gary Pettet, will re-open its third London pub this Thursday (1 November). The company will re-open The Greyhound on Battersea High Street as the Candlemaker. The pub takes its inspiration from the candle factory that operated for over a hundred years in nearby York Road. An additional nod to the pub’s 1960s heyday as a thriving market tavern is represented by colourful pop-art and psychedelic imagery adorning the walls. The radical refit also extends to the garden with “outdoor rooms”, both front and rear, colourfully-lit and containing cosy heated pods. InnBrighton, which is backed by Graphite Capital, will also officially open the North Laine brewery, the microbrewery at its new North Laine pub in Brighton, on Tuesday 13 November.

Wharfebank Brewery hires top chef for Otley pub: Wharfebank Brewery, the company set up by Martin Kellaway, former sales director at Caledonian, has hired Simon Miller as head chef at the The Fleece in Westgate, Otley. Miller gained his experience working alongside Ilkley’s The Box Tree restaurant’s Michelin starred chef Simon Gueller and celebrity chef Marco Pierre White.

Simon French – equity value for Punch shareholders in Matthew Clark holding: Panmure Gordon analyst Simon French has set a Price Target of 7p on Punch Taverns’ shares and a hold recommendation on the basis of the £44m stake in the Matthew Clark wholesale business. French said: “The key issue for investors is whether they think there is any value left in the pubco business for equity holders. We do not think there is, as there is likely to be a debt for equity swap as well as a change to the amortisation profile of the remaining debt (and likely resetting of covenants alongside these steps). It will take time for this consensus to be reached, in our view, meaning the only visible value is the group’s shareholding in Matthew Clark valued at circa £44m, or 7p per share. This therefore dictates our target price - Hold.”

Bramwell Pub Company launches customer understanding programme: Bramwell Pub Company, formerly called Barracuda, is looking to learn more about their customers’ experiences in its pubs and bars by launching a customer service programme called ‘Thirst for Service’. The programme has been designed to better understand the needs of customers; their experience when visiting Bramwell Pub Company businesses; their advocacy and return rate; areas for improvement and areas where Bramwell’s pubs and bars are performing well. Each customer visiting a Bramwell Pub Company business will be presented with a card upon point of purchase which will display a link to a designated website Alternatively, customers can access the link via point-of-sale material that will carry a QR code which they can scan using their smart phone and will take them to a short survey to complete. Customers will be further incentivised to complete the survey by having the chance to win a party for ten people at a Bramwell pub of their choice in a monthly draw. Kate Eastwood, head of sales and marketing at Bramwell Pub Company, said: “As a business we are committed to constantly improving and evolving our offer and listening to our customers is vital for the success and growth of the company. We need to continue to create compelling reasons for people to visit our pubs and bars. Service, high standards and a great atmosphere keep customers coming back time after time as well as ensuring we’re front of mind when it comes to recommending a good pub or bar. This is a first for us as a company and will help us to shape our customers’ experiences going forward ensuring we make the right decisions to enhance every visit they make to our pubs.”

Collyer – here’s what Enterprise Inns management needs to do: Deutsche Bank leisure analyst Geof Collyer has set out the action that Enterprise management need to take at the forthcoming results on 20 November. He said: “After five years of choosing to or being forced to concentrate on the financial side of the group – repaying short-term bank debt, sorting out a plan for the securitisation – we expect Enterprise to focus much more on the operational aspects of the business and what it is doing to improve the outlook for its licensees. Successfully convincing investors to reconnect with the equity story should see much of the debt pay-down transfer to the equity value. We are not arguing for a re-rating as such, just a reflection in the value of the equity of the successful restructuring of the debt story that the group has achieved. We estimate that between end the 2009 financial year and the end of the 2012 financial year, the group will have repaid around £800m of debt (worth around 160p a share) yet the current value of the equity is 40 per cent below the £620m (value) when Enterprise reported in Nov 2009 – and (the company) is in better shape today than it was back then. The key for the management’s programme to persuade the equity market to re-engage with its story is to provide some back history that shows the progression over the past five years for its total estate. Enterprise should have ended the 2012 financial year with around 6,000 pubs that it has owned for the past five years. Highlighting what has happened to this collection on an annual basis should provide a clear insight into how well the business is recovering from the depths of the recent past.”

New cocktail bar gets go-ahead – subject to a ban on dancing: A new cocktail bar has been given the go-ahead to open in Northampton town centre on the condition no dancing takes place inside. Martin Stevens, owner of Hakamou Bar, near the Grosvenor Centre in the town centre, has been given permission by Northampton Borough Council to convert the former restaurant Occo, in Derngate, into a “cocktail and canape” bar. At a meeting of the borough council’s licensing sub-committee, Stevens said the new venue would be modelled on bars and eateries found in Berlin or Barcelona where people would sit, enjoy a drink and receive table service. He said: “People will be able to have a nice drinking experience. There will be no standing up or dance floor and the sound system will only be at the level of background music.”

Bloomfield takes up two-day UK residency; hints at UK opening: April Bloomfield, the English chef who runs three of New York’s top restaurants, including the Spotted Pig, has begun a two-day residency at Fergus St John Chinatown - she will be cooking today and tomorrow (31 October). Bloomfield also told Bloomberg that she would like to open a restaurant in London. “I would love to come back and open somewhere. I don’t know if it would be like the Pig. We’re just not sure. I visit London all the time. It’s my second home. London is going through a boom now, with lots of new places opening. There has been a lot of influence from New York. Soho has a West Village feel, with an undercurrent of grittiness. I like that.” She is also publishing her own cookbook, “A Girl and Her Pig”, on 1 November priced at £14.99.

PizzaExpress Middle East franchisee undertakes radical makeover: PizzaExpress franchisee Jordana Restaurants is to overhaul the look and feel of its seven PizzaExpress sites in the Middle East in the next 12 months. Jordana Restaurants has been working with a team of designers, a theatre director, a professor of acoustics, and even a conversation expert who have all been recruited to enhance and improve the customers experience. Changes will include new restaurant designs, new uniforms, new additions to the menu, open plan kitchens and a big push to reduce the noise levels with the introduction of the sound absorbent rafters that cover the ceiling.

Wetherspoon founder Tim Martin to open Stock Exchange trading to mark twentieth anniversary of float: JD Wetherspoon founder and chairman Tim Martin is to officially open trading on the London Stock Exchange (LSE) today (Tuesday October 30) – to mark the 20th anniversary of the company’s listing. Wetherspoon floated on the LSE in October 1992, with 44 pubs and 1,200 employees. At present, it has 863 pubs across the UK and employs almost 30,000 staff. Martin founded JD Wetherspoon in 1979, naming the company after one of his teachers and JD Hogg from The Dukes of Hazzard TV series. He will be joined at the ceremony by the company’s executive directors, together with a number of pub and head office staff who have 20 years’ service. Martin said: “This is a great honour for the company. In the past 20 years, Wetherspoon has gone from strength to strength and continues to do so. Our success is due to our talented and hard working staff and the millions of customers who visit our pubs each week.”

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