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Mon 19th Nov 2012 - Tynemill, Wetherspoon and Wimpy

Story of the day:

Former Wagamama boss acquires stake in K10: Ian Neill, former chief executive and chairman of Wagamama, has acquired a significant stake in the long-established City of London Japanese restaurant concept K10 as part of a £1 million plus investment in the business alongside Chrysalis VCT. K10, based in Copthall Avenue, City of London, offers sushi and contemporary Japanese food at affordable prices with a delivery and takeaway offer. Founder Chris Kemper has been joined in the business by Maurice Abboudi and sales are over £40,000 per week, on a limited trading window. The company has now gone through a financial reorganisation, with Neill and Chrysalis VCT introducing an injection of capital and loans of more than £1 million to facilitate further development of the business. K10 has exchanged on a second site, a former Ping Pong restaurant at 3, Appold Street, EC2. Completion will take place at the end of December when work will start on converting it into a K10 restaurant opening at the end of February 2013. Other sites are under consideration, with a third site planned for later next year. Ian Neill and Chris Kay of Chrysalis VCT have joined the board, with industry veteran Neill becoming chairman. Neill said: “I was absolutely knocked out by the food quality and value at K10. The lines of happy customers demonstrated I wasn’t the only one who appreciated what Chris, Maurice and the K10 team have achieved. It was difficult to find a reason not to invest in this wonderful business.” Maurice Abboudi said: “Chris Kemper and I are delighted that K10 has secured new investment from backers as experienced as Chris Kay and Ian Neill. Their contribution to the board will be significant in the development and expansion of K10.” The name K10 is a play on the Japanese word “Kaiten” which is essentially a conveyor belt sushi restaurant. The original restaurant was set up by Chris Kemper in 1999 to serve as a ‘canteen’ for the City. Twelve years on it is now one of the highest grossing conveyor belt Japanese restaurants in the UK. Two further sites are planned over the next two years to bring the estate total to four.

ALMR National Restaurant Show Study Tour in Chicago open 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 jo.charity@propelinfo.com or call her on (01444) 810304. Places are limited.

Industry news:

Harriet Harman – I’m going to boycott Starbucks: Deputy leader of the Labour Party Harriet Harman has stated on Question Time that she will take unilateral action over the failure of the multinational companies to pay their taxes – she’s going to boycott Starbucks and buy her morning cappuccino elsewhere. Harman’s decision follows the appearance of Starbucks, Amazon and Google executives before the Commons public accounts committee – a public spending watchdog – chaired by Labour MP Margaret Hodge last week.

Doctors call for 50p minimum price for alcohol: A group of doctors have written to The Sunday Times calling for a minimum unit price (MUP) of 50p for alcohol. The government is set to start a consultation on minimum pricing this week. Katherine Brown, director of policy at the Institute of Alcohol Studies, said: “It is essential that a minimum unit price for alcohol is set at a meaningful level that will reap significant health and social benefits. A 50p MUP promises to make a far greater difference on the number of lives saved than a 40p MUP, and with little impact on moderate drinkers.” Meanwhile, The Treasury is reported to be concerned that a MUP could cost the government hundreds of millions of pounds in lost tax income, according to The Daily Telegraph. “Treasury has serious doubt about this – they’re worried about the money,” a source told the newspaper

Caffe Nero in firing line over no tax payment: Coffee shop chain Caffe Nero has become the latest retailer to receive criticism over paying no UK corporation tax for the last two years. Although it has achieved profits of £36m over the two years it has avoided tax by borrowing money from an offshore sister and using interest payment on this debt to offset its UK tax liabilities. Founder Gerry Ford denied the company had done anything wrong. He told The Sunday Telegraph: “We always pay our taxes. In the last few years our operational profit have been wiped out by paying UK banks interest. They, in turn, pay taxes on our money that they get.”

Daily Mail reveals Starbucks quartet’s £50m pay: The pressure on Starbucks in relation to its UK tax bill has continued with The Daily Mail this morning revealing that the company’s four most senior executives earned £50m over the last three years. The newspaper reports that founder Howard Shultz has earned £33m, finance chief Troy Alstead has been paid £5.7m, Cliff Burrows, who oversees the US operation, earned £6.5m and UK director John Culver earned £3.8m. Yesterday, Business Secretary Vince Cable told the Andrew Marr Show: “Our own tax authorities have got to be very tough on things like royalty payments, which is where a lot of the subterfuge takes place.” 

British youngsters near top of “getting drunk” world league table: Young people in Briton are more likely to have got drunk by the age of 13 than almost any country in the world. Only young people in Estonia, Malta and The Isle of Man record higher figures, according to a survey for Age Concern as part of Alcohol Awareness Week. In the survey, young people interviewed pointed out that a three litre bottle of cider is cheaper than a cinema ticket.

Hotel and catering sector one of the worst affected by zombie status: The Financial Times has reported that one in ten British businesses are so-called “zombies” being kept functioning thanks to the reluctance of lenders to write-off bad loans. One of the worst sectors for companies paying the interest on the debt and not the debt itself is the hotel and catering sector. The number of zombie firms is linked to the UK’s sluggish economic recovery. The number of companies only able to pay the interest on their debts, but not reduce the debt itself, has risen by ten per cent to 160,000 in the past four months, according to R3, the insolvency industry trade body.

Company news:

Tynemill reports turnover up but profit down: Tynemill, the East Midlands brewer and retailer, founded by Chris Holmes but led by Colin Wilde since 1 April this year, has reported mixed fortunes with its brewery, Castle Rock, performing well whilst its pubs saw mixed trading in the most recent year. Turnover rose to £8,097,592 in the year to 31 March compared to £7,611,620 the year before. Pre-tax profit dropped to £314,655 compared to £450,755 the year before. Operating profit was £685,928 compared to £715,134 the year before. Wilde reported Castle Rock Brewery continues to provide “double digit growth, both in volume and profit”. It has its highest ever stockists outside the company and the brewery operated at 66 per cent of its increased capacity. The company’s Kiss Me Kate beer, brewed for the Royal Wedding, became a “worldwide media phenomenon” and saw sales well ahead of budget. The pub estate saw “mixed trading” with some pubs up and some pubs down on previous trading. It has entered into a long-term operating agreement to run Lady Bay Inns. Wilde said: “The first year was profitable but the directors believe there is much scope to increase this income level in multiples. We lost one joint venture site, The Old Crown, Old Dalby, which made a significant dent in last year’s numbers and some of the shock waves of this are seen in these numbers too.” 

Franchisor Wimpy Restaurants reports strong profit despite closure of 11 restaurants: Wimpy Restaurants, which franchises the rights to the Wimpy name and employs 16 head office staff, has reported pre-tax profit of £817,574 for the year to 29 February, down from £1,099,155 the year before after 11 restaurants closed and only one opened. The company ended the year with 121 franchisee sites. Turnover dropped 17 per cent to £6,697,120. In Companies House documents, the company stated: “Franchisee profitability in various sites suffered on account of the recession and eleven restaurants closed their doors. Notwithstanding these adverse circumstances, the group managed its cost base very well, partly by internal restructuring and partly by cost saving. Despite the volume shortfall, total expenses as a percentage of revenue increased by only 1.4 per cent to 88.1 per cent against 86.7 per cent in the previous year. A satisfactory profit after taxation, albeit at a moderately reduced level, for the year ahead is forecast.”

Wetherspoon writes to landlords asking for insurance cut: Managed operator JD Wetherspoon has written to 400 of its landlords asking for reductions in insurance premiums, according to Property Week. The move came after Wetherspoon noticed that premiums on its freeholds are as much as 75 per cent lower than on leasehold sites. Property Week reports that Wetherspoon has saved £1m a year after concessions from landlords.

Gail’s Artisan Bakery team to open first restaurant: Gail’s Kitchen – the first restaurant from the team behind Gail’s Artisan Bakery - will open in Bermondsey this week. The restaurant features an open kitchen and a bread oven – the restaurant major on the artisan bread that is the cornerstone of the Gail’s bakeries offer.

Derby micro-pub opens: A “micro-pub”, The Little Chester Ale House has opened for business in Derby. The pub has opened on the site of a former dry-cleaners. Landlord Walter Scott said: “We opened last weekend and since then it has been really excellent. I have had so many people in who have loved it and I’ve also had people come in who had misconceptions about the kind of place it would be. But they have told me they are now happy it is here.”

Backyard Brewhouse to open first pub: Brownhills-based microbrewer Backyard Brewhouse is to open its first pub. The company will invest £50,000 re-opening The Fountain Inn in Walsall town centre, which closed its doors last year. Backyard director Austen Morgan said the firm intended to take over more pubs.

Banwell House Pub Company to open fourth site: Banwell House Pub Company, which was founded in 2010 and is led by Toby Brett, is to re-open The New Westhall in Upper Bristol Road, Bath as the Victoria Pub and Kitchen on 30 November. Banwell House also operates three freeholds - The Rose and Crown in Trowbridge, The Three Horseshoes in Chapsmanlade and The Duke of Cumberland, Holcombe. Brett worked for Greene King and Wadworth’s for nine years before setting up Banwell. Brett was a finalist in the Association of Licensed Multiple Retailers awards for outstanding area managers a few years ago.

Simon French – Young’s shares a buy: Panmure Gordon leisure analyst Simon French has rated Young’s shares a buy ahead of its interim results this Thursday with a target price of 804p, which is £1 more than the current price. He said: “Over the medium-term the group is well positioned to make single site or package acquisitions whilst adding bedrooms where appropriate at existing London pubs. With circa 90 per cent of group earnings coming from managed pubs within the M25 we think Young’s also has appealing defensive characteristics underpinned by a forecast Net Asset Value per share of 685p reflecting 2012’s property revaluation (excluding a lotting premium). The group said it has benefitted from strong trading during the Diamond Jubilee celebrations and last year’s investment in its pubs. We expect the group to have had a modest benefit to trade from the London Olympics.”

Punch licensee goes multi-site: Punch licensee Liz Lawson has taken on her second Punch pub, The Chieftain Hotel in Inverness, after a £350,000 joint investment. Situated on Millburn Road, the 14-bedroom hotel is within walking distance of the city centre and is popular with local residents as well as tourists. The restaurant has also been revamped and a new menu has been created, serving traditional homemade pub food. Liz already runs the Blacksmiths pub with her partner Kenny McNellan in Culloden.

Beefeater offers 50 per cent off over the weekend - and then extends the offer to Thursday: Beefeater, the Whitbread-owned pub restaurant brand, has been offering 50 per cent of all food items over the weekend. The offer to its database of customers was available to anyone who pre-booked a table and brought the voucher into a restaurant with them. Last night, at 7.30pm, there a further e-mail to the database extending the offer for four more days until this Thursday.

Harvester unveils second week of “Six Weeks of Christmas” campaign: Harvester, the 205-strong brand owned by Mitchells & Butlers, is offering groups of four diners a free bottle of sauce to take home in the second week of its Six Weeks of Christmas campaign. The campaign was launched last week with a two takeaway meals for £10 offer.

SA Brains gets go-ahead for flagship Coffee#1 in Circencester: SA Brains has won planning consent to open a flagship store at The Old Post Office in Castle Street, Circencester. Planners gave the scheme the go-ahead despite a 151-signature petition and seven letters of objection. The new Coffee#1 has a capacity of 62 seats inside with an additional 20 seats outside – the venue is expected to open on Friday 30 November. 

Businessman opens £500,000 nightclub in Basingstoke: Businessman Stuart Harris is investing £500,000 opening a new nightclub called Zeus in Basingstoke on the former Caffe Piccolo site, Winchester Street. A private members’ bar on the first floor called Rapture will open in February. Harris said: “We want to stop professional people going up to London for a night out and keep them in Basingstoke. Rapture will have a hostess service offering food to guests who can enjoy our eight and 16-seater booths and our circular bar. It’s just for older clients and will have everything you will find in a top London Club. We’ll be offering malt whiskies, Champagne and cocktails – it’s going to be high-end quality.”

New gay bar opens in Soho: A new gay bar, Manbar, described as the biggest gay bar launch in the capital in a decade, has opened in Soho. Located at 79 Charing Cross Road, the venue has had a major refit with new sound system, air conditioning and new décor and is set to revitalise a location that is part of London’s gay heritage.

Stonegate completes £515,000 investment in Chester nightspot: Stonegate Pub Company has completed a £515,000 investment in a Chester nightclub. Rosie’s on Northgate Street has undergone a £200,000 refurbishment of its top floor that has seen the introduction of VIP booths, a state-of-the-art sound and lighting system and a revamped roof terrace. It’s the second phase of an investment of £515,000 by Stonegate - the middle floor of the three-tiered nightclub underwent a £300,000 transformation in September to include a new VIP area.

Former Spirit chief executive Ian Dyson earned £1,161,000 in most recent year: Ian Dyson earned £1,161,000 from Spirit in the most recent year despite stepping down as chief executive on 16 December last year. Dyson earned a salary of £234,000 for a part year of employment as chief executive plus £863,000 notice payment, the equivalent of a full year’s salary plus benefits. Chief executive Mike Tye, who took over from Dyson last December, earned a total of £940,000, made up of basic salary of £463,000 and bonus of £356,000 plus benefits compared to £559,000 the year before. 

Spirit sells New Forest pub: Spirit Pub company has sold The Croft in Langdown Lawn, Hythe, to a developer. The Croft is a former country house that is tipped locally to be turned into housing after being sold for £575,000. Maureen Robinson, chairman of the parish council, said: “It’s very sad. A lot of money has been invested in the pub in recent years and a lot of time and effort has gone into building it up into a good community venue.” Two years ago, councillors rejected plans to build flats behind The Croft but an application to redevelop the whole site is thought to be imminent.

Soho House close to signing City of London site: Soho House, the company led by Nick Jones, is close to signing its first site in the City of London, according to The Sunday Times. The company has lined up the former Midland Bank headquarters on Poultry, a Grade I listed building that has planning consent for a hotel, restaurant, spa and private members’ clubs. The latest opening may not use the Soho House name.

Cirrus Inns re-opens former Marco Pierre White pub: Cirrus Inns has re-opened the Yew Tree in Highclere, West Berkshire, a former Marco Pierre White pub. Pierre White used the Yew Tree as the location for his 2008 television series, Marco’s Great British Feast. It was sold in August off an asking price of £1.65m.

Irish operator Gaughans opens second Star Pubs and Bars site: Irish operator Gaughans is opening its second Star Pubs and Bars site in two months – Star Pubs and Bars is the new name for the former Scottish & Newcastle Pub Company estate. The company, headed by Martin Gaughan, is opening The Bear and Ragged Staff at Wrecclesham after a £400,000 investment. It follows two months after it re-opened The Dog & Partridge in Yateley following a £220,000 refurbishment. The pubs are the first two sites in the UK for Gaughans who have previously operated pubs and hotels in Ireland. Director Martin Gaughan says the company has plans to expand further in the UK creating a group of “excellent traditional, community pubs focusing on service and standards”. Gaughans also specialises in pub and hotel refurbishments and has undertaken the construction work at the sites working with Star Pubs and Bars designers. “We shared the same vision (Star Pubs and Bars) for the pubs and it has been great to be involved in their relaunch from the start,” said Martin Gaughan. “(The company) has been extremely easy to work with; open, helpful and driven, like us, to get the sites just right. And, as an independent operator, we have appreciated the freedom they have given us to put our own mark on the pubs.” 

Cheshire multiple re-opens Robinsons pub: Broad Oak Pub Company, headed by Darren Sayle, has re-opened The Red Lion in Pickmere, near Knutsford Cheshire village after a joint investment with owner Stockport-based brewer and retailer Robinsons. The investment has seen a new catering kitchen, new washroom facilities and a state-of-the-art cellar. A new orangery has also been added to the pub. Road Oak Pub Company also runs The White Lion at Alvanley and The Parr Arms at Grapenhall.

Minerva unveils plan for Wandsworth brewery: Developer Minerva has unveiled plan to regenerate the former Young’s Ram Brewery in Wandsworth. The company wants to create more than 9,500 square metres of shops, cafes, bars and restaurants as well as 669 homes plus 1200 spaces for bikes. “We believe the plans will preserve and bring new life to the heritage brewery buildings, open up public access to the River Wandle, attract high quality retail to the town centre and create hundreds of jobs,” said Tim Garnham, Minerva’s joint chief executive.

Great British Beer Company to open thirteenth site in New England: The British Beer Company is to open its thirteenth site in Plymouth, Massachusetts. Its sites have 38 beers on tap and an unique aspect of the venues is that everything inside is made in England. “We have craftsmen over in England that make the bar for us and our unique seating and leather booths,” a spokesman said. “We try and stay as authentic to a British pub as possible.” Employees of the restaurant are also taken to England for a week to gain experience working in an actual British pub. The spokesman added. “They go over and see what real pubs are like and hopefully they bring that back with them.”

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