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Morning Briefing for pub, restaurant and food wervice operators

Mon 5th Aug 2013 - Domino's, Platinum Lace, Pret A Manger and Punch

Story of the day:

Domino’s Pizza to launch new concept: Domino’s Pizza is to launch a new dining and takeaway concept in the UK after agreeing a package deal with Extra Motorway Service Area Group to initially open six outlets on the UK motorway network. Domino’s will offer pizzas from a specially designed kiosk where the introduction of new technology means Domino’s ‘Ready2go’ can deliver the same product customers enjoy on the high street or delivered to their homes, instantly to take away. The first kiosk unit is planned to open this month at Beaconsfield Extra, followed by a programme of openings across the portfolio through August and September. Andrew Long, chief executive of Extra Group, said: “We are delighted to be working with Domino’s, which we regard as the dominant brand in its sector. The addition of Domino’s to Extra’s Food Courts will compliment the range of substantial and popular brands already represented.” Julia Poulson, head of property at Domino’s, said: “Our mission is to bring pizza to the people where and when they want it. Opening stores in Extra Service Areas is a great way to help us take that mission to the next level.” The fast food operator has leased kiosk units of approximately 150 square foot within Extra’s Food Court Buildings at M40 J2 Beaconsfield, A1M J10 Baldock, A14/M11 Cambridge, A1M J17 Peterborough, M5 J28 Cullompton and M65 J4 Blackburn with Darwen Motorway Service Areas. Each lease incorporates base rent and turnover rent provisions. The opening of the Domino’s at Beaconsfield Extra will be followed at the end of this year by a JD Wetherspoon opening. Domino’s operates 825 stores in the UK, Republic of Ireland, Germany and Switzerland. Of these, 634 stores are in England, 51 are in Scotland, 33 are in Wales, 20 are in Northern Ireland, one is on the Isle of Man, three are mobile units, 48 are in the Republic of Ireland, 25 are in Germany and ten are in Switzerland. Neil Grice at Grice Collins Long and DWF Solicitors advised Extra. 

Industry news:

Visit Britain reports 50% of foreign visitors never travel outside of London: Research by Visit Britain has shown that half of the UK’s 31 million visitors last year only went to the capital. The rest of the UK had 13 million visitors, Scotland has 2.2 million and Wales 900,000. Visit Britain has now made encouraging visitors beyond London a priority. The initiative will see country pubs, Stonehenge and cathedral cities such as Winchester and Lincoln promoted abroad. The campaign will also stress that Britain is a small country and that’s it’s easy to get around. Chief executive Sandie Dawe said: “The Olympics increased the interest in Britain around the world. We just have to make sure that some our other fantastic assets are not put in the shade by the brilliance of London’s light.”

Coroner to warn pubs and bars against holding eating competitions: A coroner is warning pubs about the dangers of eating competitions after a contestant choked to death on a boiled egg. Sharon Dixon, 54, was taking part in the egg eating contest to win a free drink when she collapsed at The Wellington Arms pub in Grimsby. Staff tried to perform the Heimlich manoeuvre but Ms Dixon died in hospital two days later from a lack of oxygen to her brain, an inquest into her death heard. Now, Coroner Paul Kelly says he will write to North East Lincolnshire Council to warn licensing officers about the dangers of people who have been drinking taking part in eating competitions in pubs and bars.

Pret A Manger owner raises new £375m loan to pay dividend: Private equity firm Bridgepoint’s sandwich chain Pret A Manger has raised a new £375m loan to refinance existing debt and pay a £150m dividend to shareholders, Reuters has reported. Bridgepoint bought Pret in 2008 in a deal backed by £220m of debt. It decided in June to get value out of the company by conducting a dividend recapitalisation – a refinancing process that increases a company’s debt to allow a payout. Out of the £375m of new loans raised, £150m will be paid via a dividend to shareholders including Bridgepoint, management and Pret’s founders, according to Reuters. By raising a new loan, leverage on the company increased to 4.17 times its EBITDA from a level of below two times in 2012. When Bridgepoint acquired the business, Pret’s leverage was over five times. Pret posted sales in 2012 of £443m and EBITDA of £61.1m compared with EBITDA of £30m in 2008.

Company news:

Punch Taverns – ‘we want to meet innovative operators’: Punch Taverns has issued an invitation to innovative and ambitious operators to meet senior executives of the company at a networking event to discuss how the company can work with them. The purpose of the evening is to create relationships and allow Punch to discuss their site opportunities in Herts, Beds, Bucks, East Anglia and London and discuss their investment plans for the next year. Regional operations director John Price said: “We have won an increasing reputation for co-investment with great operators and are keen to forge relationships with ambitious and entrepreneurial companies. Punch is also very flexible and is happy to bespoke leases and investment plans to the meet the requirements of our partners.” The networking evening we will be held on Wednesday, 4 September at The Cock & Lion, 62 Wigmore St, London starting at 5.30pm. Price added: “We plan to invite a large number of top operators from across the UK and hope that we will have a good attendance. The purpose of the evening is to talk through our lease options with prospective partners to highlight the benefits of them to their business. We really do want to get the message out to as many great, innovative operators as possible that our leases really could work for them. If you do have any enquiries or would like to be sent an invite please call Vicky Brown on 01283 523648.”

Platinum Lace reports big jump in profit: Platinum Lace, the five-strong lap-dancing chain headed by Simon Warr, has reported a large jump in profit. Turnover rose to £7,787,566 in the year to 31 December 2012 (2011: £6,870,393). Pre-tax profit was £534,150 compared to £51,329 the year before. A report stated: “With the consolidation of the business process that started in 2010, the group has also sustained its group margin slightly above 80% for the past two years. The group has achieved a net increase in cashflow amounting to £285,869 after repaying loans totaling £128,716. The group is currently consolidating its brand image built over the last two years and looking to expand globally.”

Caledonian Heritable reports profit dip: Caledonian Heritable, the operator of pubs, restaurants, nightclubs and a golf course, has reported a dip in profit for the year to 31 October 2012. The company’s turnover rose to £39,454,713 (2011: £39,080,006) but pre-tax profit was £2,050,701 compared to £5,006,208 the year before. It stated: “Despite the group reporting an increase in revenue of 1%, (it) experienced a reduction in operating profit by 30% as a result of difficult trading conditions and an exceptional impairment charge. Overall, the directors are satisfied with the results for the year, particularly in light of the economic conditions. The wider pub sector has found trading difficult and the directors will continue to monitor the results of (its) tenanted pubs.” Total bank borrowings amount to £25,726,049 (2011: £34,202,856. There was an impairment charge of £1.5m in respect of its pubs and a loan to a third party of £1,000,638 was written off.

McDonald’s has sites in just over 50% of the world’s countries: McDonald’s now has sites open in 119 different countries but there are still 105 countries without the fast food giant. There are six countries where McDonald’s once had a presence, but due to economics, and sometimes politics, the franchises closed. Two-thirds of the company’s total revenue is outside of the US. Miguel Centeno, a sociologist at Princeton University, was part of a team that created maps to track globalisation – one of them is called “The Fries That Bind Us,” a look at McDonald’s and its reach worldwide. He said: “If you want a definition of what the rich world and the poor world are, well, if you can get a McDonald’s, you are in the rich world. If you look at where these restaurants are located, it doesn’t map on to culture; it maps on to money.”

JD Wetherspoon and Spirit have 40,000 staff on contracts with no guaranteed hours: JD Wetherspoon has 24,000 staff – 80% of his workforce – on contracts with no guarantee of work each week while Spirit has 16,000 staff on zero-hours’ contracts. Wetherspoon, which runs 888 pubs across the country, said its staff were still entitled to holiday and sick pay. Su Cacioppo, legal and personnel director at Wetherspoon, told The Guardian that the contracts could not be described as zero-hours, but admitted staff were not guaranteed work from week to week. She told the newspaper: “We want to be a good employer and not every employee wants fixed hours, so it can be incredibly advantageous for them and for us. We would be willing to listen to any employee who wanted to go on to a fixed-hour contract, but the majority we speak to say they are happy with the way things are.” A Spirit spokesman said: “We operate in a seasonal sector and offer flexible contracts to ensure we meet demand and all our employees are entitled to benefits such as holiday pay and company discounts.”

Gary Neville’s Café Football to open in November: Café Football, a new casual dining concept established by Manchester United star Gary Neville and Ryan Giggs, will open at Westfield Stratford City in November. The 120-seat restaurant – which also benefits from an additional 40 al fresco covers – will offer ‘affordable food in a family friendly atmosphere’. The menu will have an international influence with a particular focus on sharing dishes as well as some playful nods to the ‘beautiful game’ including orange parfait (reflecting half-time oranges) and frosted turf (pistachios and chocolate mousse). Kate Taylor, associate director at Davis Coffer Lyons, which let the site, said: “We are delighted to have found a home for the first Café Football. Westfield is always looking for new concepts to create a point of difference and this letting is a perfect, exciting addition to what is already a dynamic and eclectic dining mix.”

Whitbread gets go-ahead for Brewers Fayre and Premier Inn in Cleethorpes: Whitbread has won planning consent for a £8 million Premier Inn hotel and Brewers Fayre in Cleethorpes. Based at Meridian Point close to Parkway Cinema, the company hopes the hotel and 190-cover Brewers Fayre will be open by spring 2014. Senior acquisition manager for Whitbread Hotels and Restaurants Kevin Murray said: “Our hotel is a strong proposition for Cleethorpes and it’s great to finally get planning approval for the scheme.”

A taste of Italy arrives in the City: A new Italian restaurant, deli and cicchetti bar will open on 19 New Bridge Street in Blackfriars on 19 September. Located at Crowne Plaza London, The City Hotel, Diciannove is overseen by executive chef Alessandro Bay, who trained under Michelin-starred Giorgio Locatelli, and will offer authentic seasonal Italian dishes alongside a drinks list that features a range of aperitivo Campari and Aperol cocktails. The 120-cover restaurant is split between the main dining area, deli, bar and a private dining space.

Domino’s investor sells entire holding for £28m: Businessman Nigel Wray, one of the earliest investors in Domino’s Pizza sold his entire stake of £4.9m shares in Domino’s, 3% of the company’s share base, at a price of 570p each on Friday to net £28m. Chairman Stephen Hemsley sold 600,000 shares worth £3.42m. A week ago chief financial officer Lee Ginsberg sold 70,000 shares at 578p, making £404,600. The shares sales follow Domino’s reporting that it will not now make a profit in Germany until 2016. 

McDonald’s to convert former Little Chef site: McDonald’s is converting a former Little Chef in Alcester, on the Oversley Mill Roundabout, into a drive thru. The store will create 75 full and part-time jobs and is expected to open in October. It will also feature special outside patio area furniture recycled from the McDonald’s restaurants which served the millions of visitors to the Olympic Park in 2012. The building will also have energy saving solar panels and outdoor heaters. The store will be run by franchisee Robert Holdcroft who already runs three McDonald’s restaurants.

Luminar to re-open Cambridge nightclub with new name: Nightclub company Luminar is to convert its Cambridge nightclub, The Place in Sidney Street, into “a stylish boutique” club with a “luxury feel”. The club will also be given a new name, Kuda, with 15 extra staff being taken on. Work on refurbishing the premises is under way, and the club’s manager Richard Hill said it would re-open under its new name on Saturday, 24 August.

Stonegate trials new Guinness fount: Stonegate Pub Company outlets in the UK are the first to trial a new Guinness marketing tool – it’s in use at 20 venues until the end of August. Customers in the selected sites will be able to use their smartphone to enable NFC technology by tapping it against the harp on new ‘magic behind the gates’ Guinness founts to see if they have won a complimentary pint. “Guinness is committed to using innovation to develop new marketing tools that will excite consumers and drive valuable sales for our customers. The new NFC activity is a prime example of this, and shows how we have implemented the latest technology in our founts, to keep our audience engaged whilst rewarding them with offers, vouchers competitions and content,” said Nick Britton, marketing manager for Guinness Western Europe at Diageo.

New Continental Properties acquires another Preston pub: New Continental Properties has bought The Mad Ferret in Preston – the company is also currently converting the former Co-Operative head office on Ormskirk Road. Jeremy Rowlands, co-owner of New Continental Properties, said the company is planning to keep the ethos of The Ferret as a live music venue but will drop the ‘Mad’ from its title to become The Ferret. A full refurbishment of the venue is planned including moving the stage to open up more space for watching bands. The Ferret is expected to re-open in early September. The company already runs the New Continental on South Meadow Lane, which re-opened in Autumn 2008 and has been twice named as CAMRA’s real ale pub of the year in West Lancashire.

Community group eyes Spirit pub: The Bromley Arts and Community Initiative (BACI) wants to turn the Grade II listed Royal Bell building in High Street, Bromley, which has lain empty for years, into a community space. The group is hoping to meet with the Spirit Pub Company, which currently holds the lease, about being able to sub-let the property. Under its plan there would be offices, exhibition space, a gallery, a shop, a studio and rehearsal spaces along with a pub. Once this has happened BACI will start applying for grants to pay for the necessary renovation works.

Greene King reports 33% ROI on first seven Realpubs and Capital Pub Company conversion: Greene King has reported that it has achieved a 33% Return on Investment (ROI) on the seven sites it converted to its premium Capital Pub Company and Realpubs format in the last financial year. The company cautioned that it expects “investment returns to moderate gong forward”. The company also reveals in its annual report that it opened its first Hungry Horse leasehold site.

Salamander Brewing Company founder opens cask bar: Christopher Bee, who co-founded the Salamander Brewing Company in 1999, has left the brewer to open a cask ale bar in Shipley, Yorkshire, The Fox. Bee said the rise in popularity of micro-brewery pubs and craft beers and finding the right location had meant the time was right to realise his ambition of opening his own bar.

Plans submitted to turn former La Tasca into a Hawaiian bar: A former La Tasca in Northampton Drapery district could soon re-open as a Hawaiian bar. Plans have been submitted to Northampton Borough Council to convert the building into a Kukui Bar – named after the state tree of Hawaii. Documents submitted to the council reveal the redeveloped venue would have a ‘tropical feel’ with bamboo features, thatched booths, a dance floor and a ‘feature fish tank’. The papers said: “Kukui is a quality operation, not based on volume sales, which seeks to offer escapism with a tropical twist. Music is a secondary feature, however it remains an important part in the Kukui cocktail.” The development of the bar would create about 12 new jobs. The venue would open until 3am, seven days a week.

Browns Bar and Brasserie extends apprenticeship scheme: Mitchells & Butlers Browns Bar & Brasserie brand has launched a second phase of the catering and hospitality management apprenticeship scheme it launched in 2012. This year, apprentices, who each have a mentor, are tasked with producing a Plat Du Jour dish for the Browns autumn menu. Simon King, retail director for Browns said: “Our apprentices have already proven themselves to be dedicated and hard-working members of the Browns team, contributing to the success of the business over the last year. This initiative will help our apprentices gain confidence and provides a genuine career path into the catering industry.”

Enterprise places six London area pubs on the market: Enterprise Inns has placed six London area freehold pubs on the market through agent AG&G with a combined value of £4.87m. The pubs are: The Three Crowns, Staines, (£850,000 plus VAT), The Alexandra in Penge (£375,000 plus VAT), The Clipper, Rotherhithe (£600,000 plus VAT), The Holly Bush, Enfield (£695,000 plus VAT), The St James’s Tavern, Bermondsey (£1.1m plus VAT) and The Manby Arms in Stratford (£1.25m plus VAT).

Kuwaiti foodservice firm buys Little Chef: Kuwaiti-based foodservice firm Kout Food Group has expanded its UK presence by buying 78 of the 80-strong Little Chef restaurant estate from private equity firm R Capital in a deal estimated to be worth around £15m. The deal was completed late on Thursday night but the announcement was delayed until this morning to allow the company to inform the Kuwait Stock Exchange, which re-opens today after a two-day shutdown. Kout Food Group already has a sizeable business in the UK that stretches from fast food franchises through to a London noodle bar brand. The company partnered Wagamama founder Alan Yau to open Cha Cha Moon in 2008 and last year it launched Chi Wok, an Asian Fusion concept at the Westfield White City Shopping Mall with other sites now being sought. Kout also owns Maison Blanc, the artisan bakery which supplies Waitrose, Starbucks, Booths and the Mitchells & Butlers estate, including Ember Inns, Vintage Inns, Village Pub & Kitchen, Miller & Carter and Browns Bar & Brasserie. In addition, the bakery supplies 14 Maison Blanc shops based within London and the south east. In 2012, Kout, as part of its international expansion strategy, acquired the franchise rights for a total of eight Kentucky Fried Chicken sites in the UK from Banquets New Chicken for 2.25m Kuwaiti dollars to add to its existing UK fast food franchise business involving 33 branches of Burger King. It is understood that Kout Food Group was the only bidder that wanted to keep the Little Chef brand going. Little Chef attracted interest from a range of fast food and coffee companies, which looked at converting the brand’s roadside estate to their own brands. R Capital will keep two of the estate’s largest sites, on either side of the A34 in Sutton Scotney, Hampshire with a view to expanding them. Kout also operates 60 Burger King, 48 Pizza Hut franchises, five Applebees and four Taco Bells sites in the Middle East – and some of its own brands such a Scoop a Cone and Ayyame. Trevor Watson led a team of Davis Coffer Lyons personnel in providing comprehensive property due diligence and strategic advice on behalf of Kout.

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