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Mon 16th Sep 2013 - Amber Taverns, Chiptole, Giraffe and M&B

Story of the day:

ALMR – Home Office plan on personal licences could prove more onerous: The Association of Licensed Multiple Operators has warned that Home Office plans to abolish the national system of personal licences in favour of beefed-up local authority control could prove more onerous for pub and restaurant operators. Strategic affairs director Kate Nicholls said: “While touted as reducing red tape and cutting costs, the consultation notes that there are real weaknesses to the personal licence system which means that not all staff are trained and the Criminal Records Bureau checks are infrequent. They are therefore proposing to strengthen controls by replacing a national personal licence regime with a new power for local authorities to impose conditions on a premises licence relating to training – not just enhanced training for the Designated Premises Supervisor (DPS) but for all bar staff, with potential refresher requirements. In addition, local authorities would be able to impose a condition requiring a CRB check to be made every time an application is made to vary the DPS and the police would be able to object to DPS appointments on crime prevention grounds, not just in exceptional circumstances. As a result, the new regime may be more onerous for some businesses and may not save the £16m costs the government has estimated. The government proposes to maintain the national benchmarks for training and criminal records checks to ensure that standards do not differ between authorities, but the proposals will result in greater local variation in approach.” The consultation is open until 7 November.

Industry news:

Luke Johnson to present at the next Propel Multi Club Conference: Luke Johnson, whose Risk Capital Partners is arguably the UK’s most prolific investor in the pub and restaurant sector, will present at the next Propel Multi Club Conference on Thursday 7 November. He will offer a private equity case study, talking about how his firm added value at Giraffe and is adding value at Patisserie Valerie. Operators can claim two free places by e-mailing The event takes place at One Moorgate Place, London.

JD Wetherspoon tops industry popularity and usage tables: JD Wetherspoon has topped the Peach BrandTrack tables of favoured brand and usage, chairman Tim Martin has reported. The company came top of a poll that asked consumers which of six brands they would choose if they were available. The results, in descending order were: Wetherspoon (11% of consumers polled), Nando’s (9%), Harvester (8%), Frankie & Benny’s (7%), PizzaExpress (7%) and Pizza Hut (6%). The company also came top of a survey of big brand usage that asked consumers where they had eaten in the past six months. The results were: Wetherspoon (43% of those asked had eaten in a Wetherspoon in the past six months), Pizza Hut (32%), Harvester (28%), Nando’s (23%), PizzaExpress (21%), Frankie & Benny’s (21%), Toby Carvery (16%), Brewer’s Fayre (14%), Beefeater (13%), Hungry Horse (11%), TGI Friday’s (11%) and Café Rouge (10%).

Industry group to encourage parents to take their children to the pub: A campaign to encourage parents to take their older children to the pub is being planned by the Vintners’ Federation, the trade organisation for Irish publicans. Publicans in Cork and Kerry will take part in a pilot project at Christmas where parents will be urged to bring their 18 and 19-year-olds to the local pub. The VFI said it admitted it had a vested interest in getting more customers to use the pub, but it wanted to address the problem of young people bingeing on cheap alcohol purchased in establishments other than pubs. The organisation said it believed that teenagers “pre-loading” – drinking at home before going out to premises where alcohol is available – was a cause for concern and led to serious late-night problems. According to The Irish Examiner, a recent survey found more than half of 18 to 24-year-olds in Ireland always, or occasionally, drink before going out.

Company news:

McDonald’s plans more menu customisation to please Millennials: The Millennial generation, those born between the early 1980s and the late 1990s, “like a lot more customisation” with their food, according to McDonald’s chief operating officer in the US, Tim Fenton which is feeding through into the burger giant’s new menus. Fenton told the Goldman Sachs Global Retailing Conference in the US: “One of the things we’re finding is the consumer, particularly Millennials, like a lot more customisation. So, we’re looking at different ethnic flavours that we can add to our products – different sauces, different ingredients we’ll be able to put on our burgers,” he said. “We’ve invested in our top line to have the capacity to do such, and you’ll see some of it coming next year.” Commentators have pointed to chicken wings as the ideal Millennials fast food because of the possibilities of customising them with different sauces, and McDonald’s is set to roll out its new Mighty Wings line across the US this month after a test in Atlanta and Chicago that went “quite well,” according to Fenton. The national promotion will run for six to eight weeks and could be extended for as long as the supply chain permits.

Amber Taverns extends debt facility to buy more pubs: Amber Taverns, the north west-based operator of freehold community pubs owned by LGV Capital and led by James Baer and Bryan Wardman, has extended its debt facility with Lloyds Bank by £5m to £27.5m. The company will now be able to acquire another 30 pubs with the company looking further afield in the Midlands for sites. In June, chairman Clive Preston told Propel that Amber Taverns had lifted average site Ebitda to £109,000 – it stood in the low £90,000s two years ago. The company has previously targeted an estate of 100 community pubs each producing site Ebitda of £100,000 – it is expects to reach 92 pubs this year and hit 100 pubs next year. Chairman Clive Preston told Propel that a couple of its more recent developments are producing site Ebitda in excess of £200,000. Preston also reported that Amber has evolved its acquisition focus and is now buying and investing in more city centre circuit and high street sites, spending around £550,000 each on acquisition and development compared to £500,000 spent on Amber schemes around two year ago. He added: “We spend £6m each year on buying and refurbishing properties. We are buying slightly fewer but bigger sites, still targeting between ten and 15 openings a year.”

BrewKitchen puts Artisan up for sale: BrewKitchen, the joint venture between restaurateur Richard Smith and Thornbridge Brewery, has put its Michelin Guide-endorsed restaurant Artisan in Crosspool, Sheffield on the market. Smith, BrewKitchen’s chef director, said: “We have developed the BrewKitchen brand significantly during the last 12 months and feel that Artisan no longer fits the profile. It is, and always has been, a successful restaurant and a pleasure to run – operating it for almost 20 years with buoyant sales and continued popularity is testament to that. Our decision to sell comes knowing it best lends itself to being an owner-run establishment – there’s plenty for someone to get their teeth into, as I experienced when I was in the kitchen.” In the past year BrewKitchen has expanded significantly, opening The Graze Inn on Ecclesall Road in Sheffield and launching Jack Baker’s Brasserie at the Beauchief hotel in the city. The group plans to make the Brasserie its flagship Sheffield outlet.

Brakspear re-opens famous Cotswold pub: Henley-based pub operator Brakspear has reopened the historic Royalist, believed to be the oldest inn in England, under a new name after a major refurbishment – creating up to 25 new jobs. The Royalist in Stow-on-the-Wold and its adjoining gastro pub The Eagle and Child has opened again under the name The Porch House. The new name is believed to have been in use during medieval times, with parts of its timber frame dating back to 947AD. The Grade II listed building on Digbeth Street was bought in July last year by Brakspear. Its 14 en suite rooms are also once again open to the public. James Rogers is the new manager at The Porch House, after working at The Old Bell in Hurley, Berkshire, a five-star restaurant with a reputation for good food.

Chipotle Mexican Grill parent company pumps £4,350,000 into UK subsidiary: The US parent company of Chipotle Mexican Grill invested £4,350,000 into its UK subsidiary in February and March this year, according to documents filed at Companies House. The company reported its UK assets were worth £3,489,000 at the end of 2012 and it had £1,112,494 cash at the bank and in hand. Chipotle currently has six London locations.

Starbucks UK to stock only ethical water: Starbucks has announced that ethical brand ‘One Water’ will be the only bottled water it will sell at its UK stores. Starting this month, One Water will be available at Starbucks in 750ml sports cap (still) and 500ml (still and sparkling) variants. One Water was launched in 2005, and has raised £8m to date for projects in some of the world’s harshest regions. The company noted: “This partnership with Starbucks is a great step for the brand, transforming our high street presence and providing an invaluable touchpoint for consumer education.”

Yorkshire brewer Theakston reports profits up 35%: Yorkshire-based brewer Theakston has reported turnover rose 7% to £10,439,000 in the year to 31 December 2012, up from £10,013,000 the year before. Pre-tax profit rose 35% to £1,952,000, up from £1,447,000 the year before. The company said Progressive Beer Duty, introduced in 2002, had given “disproportionately significant advantage to small scale brewers” and, while Theakston still “strongly supported” the initiative, there should be a formal review to reassess its impact on the UK market. The company will repay a loan note to Heineken of £1,785,000 next month and refinance the debt.

Council opposes Giraffe application: Aylesbury Town Council has objected to plans to build a Giraffe restaurant in the carpark of a Tesco supermarket on the edge of the Buckinghamshire town, claiming the development “will not comply with aspirations for improvement of the restaurants offer within the town centre.” The council said there was “already a choice of two restaurants nearby in this out-of-centre location”, and added: “Clear pedestrian routes across the large supermarket car park are needed to ensure safety. Why not locate in under-used floor space within the store?” Tesco bought the Giraffe chain for £48.1m in March. Aylesbury Vale District Council will make the final decision on the application for the new restaurant.

JD Wetherspoon M40 site to open in January 2014: JD Wetherspoon will open its much-debated M40 site at Beaconsfield Extra motorway services in January 2014. Chief executive John Hutson said: “We’ll do that first and then see about doing others.” (See bottom of the e-mail for Tim Martin’s comment on the current tax regime)

Browns marketing boss Paul Hulyer to leave Mitchells & Butlers: Paul Hulyer is stepping down from his position as a senior marketing manager at Mitchells & Butlers after almost 12 years with the company, most recently serving as brand marketing manager for the brasserie concept Browns. Hulyer told a Technomic conference recently that Browns had regained its confidence after 12 openings in 15 months. The brand, which celebrates its fortieth birthday this year, operated 14 sites up until two years ago, and has now had an impressive expansion spurt as M&B moved the offer from “colonial brasserie” to “modern brasserie”.

VQ to launch second site in central London: VQ, the 24-hour diner in the Fulham Road, West London, is to open a second site for the first time in 18 years. The new site, in Great Russell Street, just off Tottenham Court Road, marks the start of what could be a nationwide expansion for the chain. The site is a self-contained 3,700 square feet unit on the ground floor at the back of the 720-bedroom St Giles Hotel, with room for 120 covers, twice as many as the Fulham Road diner, London’s oldest 24-hour restaurant. Simon Prideaux, VQ’s managing director, said the new venue, which replaces a Japanese restaurant called Hakuba, will provide a breakfast service with waitress for the hotel’s executive guests, some 70 to 100 people a day, but will not be offering a full room service for the hotel. However, he said, as the chain looked to expand in the future, other hotel sites would definitely be considered alongside High Street premises: “VQ makes a good match with hotels.” Prideaux said that providing the second outlet, which is due to open the week beginning 14 October 14 after a five-week refit, goes well, the company would “like to hope” it could open a third site within nine months to a year, and the search for the next site would begin “sharpish”. The intention, he said, was to have three to four outlets in London “to prove the concept and get brand awareness” and then expand outside the capital. “I’ve been approached to do sites elsewhere, mainly Brighton,” he said. “But it’s important to have three or four in London first. We need to prove we can open sites for under £500,000. However, I believe there is room for a VQ in most major cities in the country.” The Fulham Road site has seen a record year since its revamp late in 2012, with sales up “well over 20%”, he said.

Giraffe wins design award: Tesco-owned Giraffe has been awarded Best Restaurant or Bar in Another Space for its Burgers & Cocktails by Giraffe restaurant at Xscape Yorkshire in Castleford in the Restaurant & Bar Design Awards. Burgers & Cocktails by Giraffe, designed by leading international hospitality design consultancy Harrison, beat off stiff competition from ASK Italian, Vinoteca and Galvin at Windows Bar.

Masterchef finalist opens restaurant with five tables: Chef Marianne Lumb has opened her self-titled restaurant Marianne, on Chepstow Road in London. Lumb has trained at restaurants including Gravetye Manor, The River Café and Le Gavroche. In 2009 she was a finalist on BBC Masterchef: The Professionals, the same year her first book ‘Kitchen Knife Skills’ (Quarto) was published. Drawing upon her experience as a private chef to high profile families including the Bamford’s, Sainsbury’s and Soros’s, and taking inspiration from similar sized restaurants in New York and Paris, Marianne will continue to cook at an intimate scale, with a dining room of just five tables.

Robinsons invests £3.5m in 35 pubs: Cheshire brewer and retailer Robinsons has revealed it’s investing £3.5m on pub refurbishments in 2013, with the same sum committed for 2014. Operations Director David Harrison said. “We currently have four new business development managers (and are recruiting a fifth) who, between them and our in-house design team, have developed 35 pubs this year with significant investment schemes. Ever more rewarding is that we are seeing volume growth to encourage a similar investment next year. Some of our pubs in the Lake District, North Wales and Cheshire are amongst the best pubs you will ever see. But we have dozens of great community-focussed pubs that need an equal amount of love. So alongside significant investment into pub repairs we need to continue to support our pubs at all levels in order to make the most of our diverse pub estate in the north west.”

Rollo – Mitchells & Butlers expansionary capex could increase after introspective period: Morgan Stanley leisure analyst Jamie Rollo has forecast that Mitchells & Butlers could increase its expansionary capital expenditure after an introspective period. He said: “At the interim results the company announced that it plans to invest only in its new categories of ‘Upmarket Social’ (All Bar One, Castle, Nicholson’s and Alex), ‘Special’ (Miller & Carter, Vintage Inns, Village Pub & Kitchen, Premium Country Dining and Browns), and ‘Family’ (Harvester and Toby Carvery) segments, and more details were given at an informal analyst meeting last week. The company is now more focused on returns rather than targeting specific numbers of new openings. This introspective work led to a lower level of openings in Half One, with ten new sites, and M&B reduced its rollout plan from around 40 pubs in the year to circa 20. At its Quarter Three trading update, M&B had opened 11 sites. We expect 20 for the full year, and openings tend to be back-end loaded. The company said at the interims that it expects a lower level of expansionary capex this year of around £30m (versus £55m last year), and to spend £50-80m per annum in the medium term, in line with our forecasts, although commentary at last week’s analyst meeting was encouraging, suggesting we think this could be increased.”

Crown Catering Cambridge coverts pub to restaurant: Crown Catering Cambridge, which is principal cater to Tattersalls, has acquired The King’s Head in Dullingham and will re-open the site tomorrow. The company is looking to relocate the kitchens of its outside catering business to one of the outbuildings on The King’s Head site. And once the restaurant is established, a former coach house in front of The King’s Head could be turned into a village shop. “We hope our investment will be seen locally in a positive light and we look forward to integrating our business activities into Dullingham village life,” said company chairman Roger Hornett. “In due course we intend to turn one of our outbuildings into a small specialist retail outlet. As part of our research into the viability of such a venture, we are happy to take soundings as to what might be of benefit locally.”

Brewdog teams up with beer bloggers to produce Dead Metaphor: Scottish brewer and retailer Brewdog has teamed with a pair of beer bloggers to produce a new beer – Dead Metaphor. The company stated: “The world of beer blogging is an incredibly colourful canvas of extremes. There are the foodies, the traditionalists, the angry mobs, the attention seekers and there’s a healthy dose of the downright crazy. But in among this minefield, there are some of the most articulate, thought-provoking, insightful blogs available online. We wanted to connect with some of the most intelligent and entertaining beer writers that we follow and do what we do best with them – brew beer! So we invited Rob from Hopzine and Rich from The Beer Cast, two of our most frequented blogs, to join us in Fraserburgh to brew a beer of which they were to design. The guys chose to collaborate on a beer that really embodied what a writer needs to get those cogs turning; coffee for a pick-me-up and chocolate for a sweet kick and they added oatmeal for a Scottish twist. The beer is a 6.5% milk, oatmeal, chocolate coffee stout.”

Chiquito and Bella Italia tipped for Huntingdon: Chiquito and Bella Italia are tipped locally to open in Huntingdon’s Towerfields retail park. Frankie & Benny’s, McDonald’s and KFC already operate sites at the centre.

Gatecrasher – dodgy vodka was not our fault: Nightclub company Gatecrasher has explained the circumstances surrounding its prosecution for having 656 litres of industrial alcohol to sell as vodka at a student freshers week event at its Leeds site in 2012 – it was fined £5,000 last month. The company has blamed a ‘second tier reputable and registered supplier’ called Midnight Tipples that was tasked with buying house vodka for its Leeds venue. The club had an existing two-year relationship with the London-based supplier. Gatecrasher managing director Simon Raine said: “It is unfair that the actions of a third party supplier now call in to question our reputation. It is unacceptable that we have been prosecuted when the supplier’s court case has yet to take place. Gatecrasher will seek legal recourse against the supplier and may appeal against the Trading Standards ruling. We want to assure our customers that they can continue to feel confident and safe in all of our venues. The actions of this supplier represent a complete violation of our company’s values and standards. We will not tolerate actions that undermine the trust of our customers and call into question the reputation we have built up over the past 20 years. Gatecrasher no longer uses second tier suppliers and only buys directly from brands. Only branded vodka is used at its venues.”

Enterprise Inns director raises £154,000 with share sale: Enterprise Inns chief operating officer Simon Townsend, sold 100,000 shares in the company last Friday at a price of 154.30p, raising £154,000. Townsend still holds 546,555 shares in Enterprise.

Wetherspoon founder attended results meeting to make tax case: JD Wetherspoon founder and chairman Tim Martin attended his first company results meeting since 2003 on Friday. His appearance was to publicise Tax Parity Day on Wednesday 25 September, when prices will be cut at JD Wetherspoon pubs – and a large number of other pub and restaurant companies – by 7.5% to highlight the benefits to consumers of lowering VAT in the foodservice sector. Martin believes that the pub sector is facing an unsustainable future unless the tax disparity with supermarkets on food can be reduced – supermarkets pay no VAT whilst pubs and restaurants pay 20%. On paying £632,000 in tax per pub, he said: “It’s only a matter of time before all three of us (he was seated with chief executive John Hutson and finance director Kirk Davis) are knighted for efforts on behalf of the country. We like to pay taxes. We love it – it’s a good thing to do. We paid £551.1m in tax this year. We aspire to pay £1bn a year in tax but we think we should be paying the same as supermarkets. We think it’s time everybody woke up to the fact that the pub industry has lost 50% of its beer sales and 15% of pubs have closed down. There is a decision for the country. It doesn’t matter what Andrew Griffiths (MP for Burton who has publicly fallen out with Martin over the campaign to reduce VAT) or George Osborne think. Anybody who has visited Sweden knows how boring it is without a pub – (it’s the reason why) there are more Swedes here in the UK pro rata than Poles. The closure of pubs is not fast enough for people to panic – it’s not like a car factory closing down. (But) there is a big movement away from pubs – we’ve lost a lot of students and pensioners. I think it’s the price differential (with the supermarkets) that’s causing the change.” Martin reports coming home to find his son drinking Budweiser bought from Tesco with his friends. He reported using Anglo Saxon language to urge him to go down the pub. He later told The Telegraph: “This (tax) disparity enables supermarkets to subsidise their alcohol drink sales to the detriment of pubs and, indeed, restaurants. This serious economic disadvantage has contributed to the closure of many thousands of pubs.”

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