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Mon 8th Jul 2013 - Bramwell, Orchid, Patisserie Valerie, JDW and Young’s

Story of the day:

Patisserie Valerie to open in second Scottish city – plans 25 openings this year: Artisan baker and cafe chain Patisserie Valerie is to expand into Glasgow with two new branches after success at three sites in Edinburgh, its only sites north of the border. It will open at Glasgow Central railway station and on West Nile Street. The former Franco’s in the station will be transformed into a 38-cover Patisserie Valerie. A hairdressers on West Nile Street will be adapted into an 80-seater cafe. Until now the company’s only presence in Scotland was in Edinburgh, with a third outlet opening at 25 George IV Bridge at the end of May. Paul May, chief executive at Patisserie Valerie, said: “We opened two sites in Edinburgh a year ago and we just opened our third site in the capital which has been extremely successful. Glasgow seemed to be the next step. I’ve been trying to find a site in the city for over 12 months, Glasgow has been at the top of our list for some time and it’s just the way things have worked out that we’ll be opening two this year. We’ve got a good relationship with Network Rail now as we’ve nine sites with them across the country, so we took up this opportunity to open in Central Station.” There are currently 107 branches of the company across the UK with a further 25 set to be in operation by the end of the year. May added: “If you generally look around there’s nobody that provides what we do. We sell celebration cakes and slices, which the customer can take a seat and enjoy – we always call it an affordable treat. Our business is a bit different because people can come to us and they’ll just spend £5 or £6 and they can stay as long as they like. We understand that people don’t have the disposable income that they used to and I think that’s why we’re able to expand in these tough times.” Patisserie Valerie reported that Ebitda rose to £9.6m in the year to 30 September 2012, up from £8m the year before. Turnover rose to £49,511,423 from £40,482,648 the year before. Pre-tax profit stood at £5,895,285 compared to £4,595,649 in the prior year. The company, which has 1,500 staff, has reported it targets a cash payback in excess of 40% return and two-year payback on investment.

Industry news:

VAT campaign takes message to 50,000 pubs: The campaign to reduce VAT in the sector from 20% to 5%, led by Jacques Borel, has produced 500,000 copies of a special magazine called Taxing Times, which sets out the case for lower VAT in the sector. The magazine has been sent to around 50,000 pubs in the UK with enough spare copies for customers to read. It contain articles by Jacques Borel, Wetherspoon chairman Tim Martin and St Austell chief executive James Staughton, who is also chairman of the family brewers. Staughton states: “Pubs are beleaguered with tax and legislation so this campaign is to kickstart some economic growth and help landlords get their businesses and local communities into growth. Reducing VAT will help to regenerate high streets, giving a boost to the sector and creating new jobs as pubs get busier. This will particularly help youth unemployment as pubs take on junior help.” Martin writes: “Pubs should not pay higher taxes than supermarkets – but they do. This is because supermarkets pay no VAT on their food sales, yet pubs pay 20%. What is the logic or fairness in that?”.

Supermarkets criticised over food poisoning linked to chicken: Food poisoning cases linked to infected chicken in supermarkets is rising. An estimated 580,000 people last year contracted the bug campylobacter, a common cause of stomach upsets. The number of cases has risen by 140,000 a year for the past four years. Food Standards Authority chief executive Catherine Brown said it was unacceptable that two-thirds of all fresh chicken on supermarkets shelves is contaminated with the bug and called for supermarkets to get their act together. 

Center Parcs new opening to create 1,500 jobs: The opening of the new Center Parcs in Woburn next Spring, the fifth site in the UK, will create 1,500 jobs, including 126 waiting staff. Martin Dalby, the chief executive of Center Parcs, told The Times: “As the job market remains unsteady, I’m delighted that we are able to create such a large number of new jobs.”

Survey of pub accommodation providers finds 65% think TripAdvisor is ‘positive’ influence: The first survey of the 5,500 accommodation providers in the pub sector has found 65% think TripAdvisor is a positive influence on their business. Report publisher RPBI emailed 4,500 pubs with accommodation and 397 pub owners/managers completed an online survey comprising questions covering their opinions between 20 April and 28 May. For the consumer survey, 691 respondents took part in an online survey. A total of 87% of pubs offering accommodation are listed on TripAdvisor and 65% said that customer comments had a positive impact, against 10% that said they had a negative impact (the rest were either no impact or not applicable). The customer survey found that 67% of consumers use TripAdvisor and 57% found the comments ‘somewhat important’ and 30% ‘very important’. However one pub owner said: “Ban TripAdvisor or have it policed the way online booking sites do. Anybody can write anything they want regardless of if it is true or not or if they have even stayed there.” Go to www.rpbireports.co.uk to buy the report.

KFC owner threatens legal action against Hitler restaurant: Kentucky Fried Chicken owner Yum! Brands has threatened legal action against a fried chicken shop named Hitler in Thailand that sports a storefront emblem very similar to KFC’s, only with Adolf Hitler’s head replacing Colonel Sanders. “We find it extremely distasteful and are considering legal action since it is an infringement of our brand trademark and has nothing to do with us,” a spokesman for KFC parent Yum! said. At the entrance to the restaurant there is also a Ronald McDonald statue, which has a Hitler moustache and is giving a Nazi salute. There is trend to poke fun at Hitler and the Nazis in Thailand by using imagery in unexpected places.

Coca-Cola UK boss reveals thinking behind ‘names campaign’: Coca-Cola UK boss Jon Wood has revealed the strategy behind the current campaign that has seen 250 Christian names printed on the Coca-Cola packaging. He told The Sunday Telegraph that the campaign is aimed at getting the brand ‘talked about’ as people search out their names. He said “In Australia, (where Coke first launched the campaign), it drove a 3% transaction increase. It makes it very personal – and that personalistion of marketing is very important.” Meanwhile, Coke Zero has seen a 24.8% increase in volumes in 2013 and the company’s overall first quarter sales grew by 3.7%.

Company news:

Orchid’s Rufus Hall reports progress on investments: Orchid Pub Company chief executive Rufus Hall has reported 39 pubs have seen investment in the past year with sales at its new All Inns format, opened at five sites, up more than 30%, ‘way ahead of our expectations’. In his blog, he said: “We have invested £12m in 39 brilliant new look pubs. (There have been) 22 pizza ovens shipped in from Italy and installed as part of the Pizza Kitchen Bar success story (we run 24 – there could be 200!). Five All Inns have re-opened with ‘Rocket’ party rooms, interactive games, endless ice-cream and a great British pub all under one roof. (There have been) 68 new carvery pods installed, 3,100 new chairs ordered and 26 flexible meeting rooms created in our new look carveries. Sales across our investments are up by more than 25% with record-breaking returns of 40% plus. We’re not just investing in pubs. This year, we’re committing more pounds and people to training than ever before. A big ‘thank you’ to everybody in ‘Orchid’ Land for putting their heart and soul into our investments and also our board and bankers for supporting our growth plans. The investment programme is going so well that £20m committed last year will probably be spent by Christmas – right now, we’re putting together our plans to support further investment.”

Bettys Tea Rooms owner reports record profit: Bettys and Taylors of Harrogate, which operates six Bettys Tea Rooms and the Yorkshire Tea brand, has reported turnover rose 14% to £133.2m in the year to 31 October 2012, with pre-tax profit up from £8.1m to £10m. The company operates without a chief executive after former Duchy Original boss Andrew Bake left the business two years ago. It stated: “Instead of recruiting a traditional chief executive we have created a collaborative leadership team.” Finance director Paul Cogan said: “In difficult times people turn to businesses and brands they can trust where quality is never compromised. It means a great deal to us that they choose a good cup of Yorkshire tea or a Bettys cake.” The company paid its 1,293 employees an average bonus of £2,000 each, a total of £2.7m.

Bramwell Pub Company opens second premium London pub: Bramwell Pub Company has opened its second premium site in London, The Nag’s Head on Upper Street in Islington, a Star Pubs & Bars site. The venue is described as “a classic pub with an artisan food and cocktail offer”. The pub builds on the success of its sister venue, The Longroom in Smithfield, by offering the Reuben, classic salt beef sandwiches and grilled cheese that The Longroom has become known for. It also offers artisan pizzas which are stone baked with a parmesan crust and, by combining the best from the food menus of both pubs, the team have created a salt beef pizza. Customers can choose from red pizzas (made with tomato) or white pizzas, all served with an authentic puffy crust and charred crisp base. Cocktails are a key part of The Nag’s Head drinks offer and the highlights include the habanero and maple syrup margarita; a blood orange and sage julep and a red beer – a blend of ale, golden tequila, spiced tomato juice served with a salt rim.

John Dunsmore’s fund invests £2.4m in wine maker: Hothouse Club, the investment fund overseen by former Scottish & Newcastle chief executive John Dunsmore, has invested £2.4m in English wine maker Chapel Down. The investment is part of a total of £4.4m raised from institutional investors. Chapel Down has turnover of £4.8m and pre-tax profit of £370,000 in its most recent year. 

San Carlo restaurant company reports turnover and profit up: The San Carlo restaurants company has reported turnover rose 10.9% to £30.1 in the year to 30 September 2012. Pre-tax profit jumped to £1.75m from £1.02m the year before. The company opened San Carlo Fumo in Birmingham and Cicchetti Piccadilly, London, in the year. At the year-end, the company had shareholders’ funds of £3.7m including distributable reserves of £2.9m. During the year, the company spent £1.82m on the development of its new restaurants, £585,000 on new plant and equipment for the sites and £1,008,000 on new plant and equipment at its other sites in Manchester and Birmingham. A dividend of £175,000 was paid.

Greg Wallace relaunches Wallace & Co with fresh investment: Greg Wallace has relaunched his Wallace & Co restaurant in Putney after finding fresh investment. The venue has also launched a new bar area where customers can order sharing platers as well as coffee and pastries. Wallace & Co was formally relaunched last week with the MasterChef presenter bringing in Annabel Lawrence, the owner of private caterer Green Fig, to run it. The venue also has a new head chef, Jono Foot. Both Lawrence and Foot previously worked at Smiths of Smithfield, the London restaurant founded by Wallace’s fellow MasterChef judge, John Torode. Wallace told The Daily Express: “I’m delighted with the investment and changes we’ve made. Annabelle Lawrence came highly recommended by John Torode and I look forward to working with her to improve the offering to our customers.” Earlier this year Wallace had to put his greengrocer business West Veg, which traded under the name Secretts Direct, into administration.

Liverpool’s Sergeant Pepper’s Bistro to re-open: Liverpool’s Beatles-inspired Sergeant Pepper’s Bistro is to reopen with an added second floor. Developers are to add an upper floor and a new glass frontage to the restaurant, which has stood empty for several years. The former tram ticket office and public toilet faces the top of Penny Lane where it meets Allerton Road, and remains a popular stop-off for tourists on Beatles tours. Businessman Ray Maatook, the building’s owner, is currently holding talks with a number of operators to run the restaurant once the building work is finished. The name and theme of the reopened restaurant will be subject to agreement between the parties involved.

JD Wetherspoon names Thatchers as its most responsible supplier: Thatchers Cider’s emphasis on sustainability has been recognised with the presentation of an award by JD Wetherspoon. Its innovations in orchard management, the installation of a biomass boiler, and the creation of lighter weight glass bottles were highlighted by JD Wetherspoon when presenting Thatchers with its Corporate Social Responsibility Supplier of the Year trophy. Neil Day, Thatchers operations director said: “This award something we’re really proud to receive, as we’ve been working hard across all areas of our business to make sure we’re doing the right thing, from the work in our orchards, reducing our energy consumption, and our support of activities within our local community.”

Roosters Piri Piri lines up two more openings: Roosters Piri Piri, which operates an estate of 35 managed and franchised restaurants offering “vibrant street food from around the world”, is to open sites in next two sites in Mile End and Shirley. The openings follow new sites in High Wycombe, Portsmouth, Basingstoke, Oxford, Streatham Hill, Bedford and Rayners Lane since the start of the year. Founded by Khalid Mirza in 2003, Roosters Piri Piri (formerly Roosters) was initially set up to fill a gap in the market for halal fried chicken. As the business grew, Roosters Piri Piri focussed on offering a healthier alternative grilled chicken. Now, Roosters Piri Piri is phasing out fried chicken and is focused on ‘offering a diverse menu with the focus on healthier, fast nutritious food’. Last year, the company, which is a provisional member of the British Franchise Association, introduced a new restaurant design. Rosters Piri Piri franchises are priced at £130,000 plus VAT.

Circle 360 Champagne & Cocktails bar to open at Lakeside: A 120-cover Circle 360 Champagne & Cocktails bar is to open at the Intu Lakeside shopping centre. The brand has taken a 1,862 square foot unit on a ten-year lease. Intu asset management director Jonathan Ainsley said: “360 bars are trading extremely well in other Intu centres reflecting the desire of our shoppers to try new and aspirational offers. We specifically sought a champagne bar for this location as it will really add to the ambience at the heart of the centre and is visible from three levels.” Last month, Propel reported Buchanan Galleries is to become the first shopping centre in Glasgow city centre to open a champagne bar as part of a dozen planned openings by champagne bar specialist 360 Champagne & Cocktails. 360 Champagne & Cocktails successfully launched its first bar in the Trafford Centre, Manchester in July 2011, followed by the opening of our second bar at Metrocentre, Gateshead, with a further eight openings planned in the current year.

Mike Dowell joins Kornicis in non-executive role: Mike Dowell, the executive who ran the Pitcher & Piano brand for a number of years at Marston’s and who was previously managing director of Costa Coffee, has joined Kornicis, the operator of Jamie’s wine bar brand, in a non-executive role. His arrival comes as Kornicis, led by Nick Tamblyn, opens a more contemporary brand, Kamique, with a focus on cocktails at its newly acquired St Martin Lane site, in London’s Covent Garden.

Turnover drops and losses reduce at Maison Blanc: Maison Blanc, the baker and retailer of bread and French patisserie through 14 branches, has reported turnover down 8% to £11,050,000 in the year ended 31 December 2012. Losses before tax dropped to £2,349,000 from £3,225,000 the year before. The company, which reported a ‘substantial improvement in cost control’, saw operating loses reduce by £404,000, or 14%, to £2,508,000. 

Sambuca owner secures new site: Dan Miller, who runs a number of restaurants in the north east that trade under the Sambuca brand, has bought La Lanterna in Edinburgh’s Hanover Street through agent Christie + Co. The restaurant has been a prominent and successful fixture on the Edinburgh dining scene since the late 1970s. Miller will continue to trade under La Lanterna name for the time being but promises some ‘exciting new developments’. 

Living Ventures opens Artisan: Living Ventures, the north west operator headed by Tim Bacon and Jeremy Roberts, has opened its biggest restaurant to date – Artisan, which is located in a 12,000 square foot, semi-industrial space on the first floor of Tower 12, Avenue North in Spinningfields, Manchester. It features exposed brickwork and roof timbers, with lots of salvaged materials. Artisan is described as ‘artist’s loft studio meets concrete warehouse – stripped back and raw”. Two huge wood fired ovens are featured. It offers a ‘modestly priced, rustic menu’. Flamed meat, fish and unusual pizzas come straight from the ovens.

Keltek Cornish Brewery buys four pubs: The Keltek Cornish Brewery has embarked on an ambitious expansion plan starting with the acquisition of four Cornish village pubs. The Redruth-based brewer has invested more than £1.6 million to purchase The Coppice Inn at Lanner, the Robartes Arms in Illogan, The London Inn at Summercourt and The Fox & Hounds in Scorrier. Keltek founder Stuart Heath said: “Pubs have always been a central part of my life. I can imagine a much emptier life without a local pub and many communities have been losing theirs. The idea of celebrating and supporting local pubs which really serve a key role in their surrounding community is very important to me. Although the pubs are tied to our brand we’ll be selling our real ales to our tied estate at a similar competitive price to those at which we sell to free houses and clubs. This will allow our landlords to be both very competitive and make a sensible and reasonable profit on their beer sales. Beer swaps with other breweries up country are another way in which we can keep prices competitive whilst offering a wider choice of ales in our pubs.”

Simon French – we expect Young’s trading to have remained strong but slowed: Panmure Gordon leisure analyst Simon French has issued a ‘Buy’ note on Young’s shares, with a Price Target of 955p, ahead of tomorrow’s trading update. He said: “When the group reported its full year 2013 results, current trading was very strong with like-for-like sales growth of 10.6% for the first seven weeks of 2014. However, the comparative was a relatively weak comparative of -2.0%. We expect trading to have remained strong but slowed over the remainder of the quarter reflecting a stronger comparative.” 

Partners Ales buys second pub: Partners Ales has bought its second pub, The Halfway House in Morley. Brewery owner Paul Horne already owns The Spotted Cow in Drighlington, Horne said: “There’s a need for a good real ale pub in Morley.” Horne said that it will be serving eight real ales which include Partners Ales and a selection of guest ales from across the UK.

French themed cafe planned for Southampton: Plans have been revealed for a French themed cafe and restaurant in Southampton city centre that would create 25 jobs. Under the proposals submitted to city planners, the former Mack fruit and vegetable warehouse in the High Street will be transformed into a cafe/patisserie with outside seating. The basement of the property will also be converted into a cabaret cafe/restaurant with a cocktail bar and function room which will only be open on Friday and Saturday nights.

Admiral Taverns pub sees record investment: A pub in Newport, Wales, has seen one of the highest investments yet made by tenanted pub company Admiral Taverns. The Lamb pub, on Bridge Street, Newport has undergone a £200,000 refurbishment, with a £125,000 investment by Admiral Taverns. Licensee Jon Thomas, who has worked in the hospitality trade for over 25 years, believed the opportunity to invest in Newport was too good to be missed. He said: “I’ve known of The Lamb for years, so when the opportunity came up to take over the reins I leapt at the chance. I saw it as a great opportunity to open a London-style pub in the centre of Newport.”

Creditors to lose £2.25m from 52-strong pubco collapse; administrator investigates ‘relevance’ of hedging product: Unsecured creditors are set to lose £2,250,000 from the collapse of HK Taverns in the wake of the death its controlling party Harry Kelly in February this year – the company ran an estate of 52 pubs in the East Midlands. The pubs ranged from wet-led community pubs to large rural food-led pubs, with the majority of the pubs leased from major pub companies with five being personally owned by Harry Kelly. Administrator Baker Tilly reports that the company grew rapidly in a relatively short period of time. It noted: “However, due to an absence of investment, the administrative functions and management structure were insufficient for a business of its size. Furthermore, there appears to have been an absence of formality in the company’s management and administration, with weak systems and controls in place. Helen Kelly is the sole director and shareholder of the company, although Harry Kelly controlled the action of the company, seemingly acting as a shadow director. Following Mr Kelly’s death, there was a loss of direction at the company. In the absence of systems or controls or a succession plan, the company became increasingly dysfunctional. This is evidenced by the substantial HMRC arrears and non-payment of suppliers. PAYE and VAT arrears were estimated at circa £500,000, utility arrears were £250,000 and total unsecured claims were £2,250,000.” The company has only filed one set of accounts since it started trading and had handed back the majority of its pubs prior to administration – 15 to Enterprise Inns and 13 to Punch Taverns. A further 11 pubs have been handed back to Enterprise Inns at or post appointment of administrators. Lloyds TSB Bank has a charge on the five freeholds owned by Harry Kelly personally and the bank has underwritten £100,000 of trading losses to allow the pubs to remain open and sold – and to preserve their going concern value. Colliers International is marketing the five pubs – The Red Lion, Rothwell, The Admiral Hornblower, Oakham, The Wishing Well, Dyke, The Beehive Inn, Grantham and The Magnet Tavern, Boston – with sales expected to complete in September or October this year; no funds are expected to be available for unsecured creditors although there is “substantial interest” in the portfolio. Baker Tilly also reports it is ‘currently investigating’ whether the company was sold a ‘relevant’ interest rate hedging product and ‘whether there is an entitlement to redress’.

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