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Thu 2nd Jan 2014 - Propel Thursday News Briefing

Story of the Day:

First companies report December trading uplift: Managed pub and bar group TCG has reported an average 7% like-for-like sales uplift across the estate during Christmas and New Year. Chief operating officer Nigel Wright said: “Our festive performance reflected investment earlier in the year. Corporate bookings, for example, were up thanks to an earlier, more structured drive to secure this business, while several of this year’s capex sites enjoyed massive, even record-breaking, sales over the holiday period. We saw significant divergence in the sales uplift, by type of pub, by week and by region – Christmas 2013 was very much a ‘moveable feast’, with the busiest sectors of the market changing as the extended festive season progressed. There was a definite upturn in consumer confidence this year. Whether they were in our more aspirational London venues, in young bars, high street or community pubs, there were more people going out to celebrate than there have been for some years – provided they were getting value for money.” Henry’s Covent Garden set a new record, with sales in excess of £125,000 in the week to 22 December. Wright added: “Overall, we saw a 10% increase in food sales across the business, with new menus launched in November, as well as strong Christmas offers, proving very popular.” Seven-strong coaching inn business Bulldog Hotel Group, led by Kevin Charity, reported a “fabulous December” with like-for-like sales up 6.8% for the month. Charity said: “Three sites had their personal best weeks ever and each site averaged £29,500 net of VAT per week throughout the December period.” Six-strong Innventure, led by Chris Gerard, saw 2.5% like-for-like growth on last year’s “spectacular numbers across December”. Week Three of December produced record sales for the Innventure estate of £233,000, Gerard reported. How was your December trading? E-mail paul.charity@propelinfo.com to report your December figures. 

Industry News:

The first Propel Multi Club Conference of 2014 open to bookings: The first Propel Multi Club Conference of 2014, to be held on Thursday 13 March at The Lancaster Gate Hotel, London, is now open for bookings. Multi site pub, restaurant and foodservice companies can claim up to two free places each. E-mail jo.charity@propelinfo.com to reserve places.

Councils plan ban on strong lagers and ales: Around 30 local authorities have introduced or are planning bans on strong lagers or ales to crackdown on street drinking. Supermarkets, corner shops, newsagents and off-licences are being asked to stop selling super-strength drinks as part of new licence conditions. The move has been pioneered by Ipswich Council in a campaign called “Reducing the Strength”. Simon Emeny, chief executive of Fuller’s, told The Mail on Sunday: “We’ve very worried indeed. Local authorities don’t know what they’re dealing with here. They’re just demonising beer and targeting beer-drinkers. Our beers are premium beers, drunk by connoisseurs and are not going to be consumed by people on the street.”

CPL Training takes record personal licence qualification market share: CPL Training Group has taken record market share in the Third Quarter of 2013 in respect of the personal licence qualification, the APLH. Paul Chase, CPL Training’s director and head of UK Compliance, said: “In Quarter Three 2013 we achieved a record 31.1% of the personal licence training market. In this quarter, 4,040 people sat and passed the APLH qualification in England and Wales with us. We are naturally delighted at this result, which reflects our growing corporate client base from across the licensed retail sector.”

Boris Johnson – my New Year resolution is to recruit more London firms to support the Living Wage: London Mayor Boris Johnson has pledged to recruit more London firms to support the Living Wage – set at £8.80 an hour this year – as his New Year resolution. Writing in The Daily Telegraph, he stated: “In the past year there has been a 450% increase in firms signing up – the total now stands at 432. Those companies find that paying the Living Wage makes sense for them, too. They build loyalty and commitment in staff who feel properly valued, they reduce staff turnover and they end up actually saving in labour costs.”

Welsh brewer condemns New Year beer price hikes: Welsh Brewer and pub owner Evan-Evans has condemned national brewers for price increases planned for this month. Evan-Evans reports wholesale price increases across the board of more than 6p per pint that, it argues, translates to 20p at the bar. Evan-Evans chief executive Simon Buckley said: “This year the government gave way and supported the industry with the removal of the duty escalator and a duty reduction – the first time for 57 years. Now the national brewers are pushing their prices up in the trade, and as a result are sending our customers to the supermarkets. When are they going to get the message that the consumer cannot and will not pay an additional 20p per pint?”

Longden, Corbin and King awarded OBEs: Pub is the Hub founder John Longden and restaurateurs Chris Corbin and Jeremy King have been awarded OBEs in the New Year’s Honours list. Corbin and King have been awarded OBEs for their services to hospitality and their voluntary work – King for “voluntary service to the arts” and Corbin through his work with leukaemia research group Leuka. Longden has been recognised for “voluntary service to rural communities in the UK”. 

Company News:

Cote reports turnover hits £64.7m: Cote has reported turnover jumped 31.2% to hit £64.7m in the year ended 29 July 2013, a year that saw 11 new openings to reach an estate total of 43. Ebitda increased 28% to £12.8m. Pre-tax profit was £8,917,872 compared to £6,916,508 the year prior. The company was acquired by private equity firm CBPE Capital in September 2013 and a new six-year facility was negotiated with a syndicate of banks. Cote paid former owner Richard Caring an outstanding loan of £8,145,000 in September and sister company Bill’s paid Cote a debt of £11,231,351 it owed in the same month.

Hook Norton reports return to profit; signals intent to sell more pubs: Oxfordshire brewer and retailer Hook Norton has reported a return to profit. The company saw turnover up 0.6% to £7,461,035 in the year to 30 September 2013. Pre-tax profit was £401,955 compared to a loss of £178,662 the year before. The company stated: “It is increasingly difficult to sustain some smaller village pubs and we have perhaps in the past been too willing to keep persisting where local demand is no longer sufficient to retain a pub, to the detriment of the company. We will therefore be disposing of some further sites in the next two years and looking to invest the proceeds back into the long term estate and potentially buying other pubs that meet our criteria.” The company has net assets of £2,848,168 and shareholder funds of £10,712,230. It added: “While the results of the year are very encouraging, much still needs to be done. But the essence of achieving success in the future is increasing the volumes of cask beer produced to dilute the fixed costs of the brewery and ensuring we have a sustainable good quality pub estate, with the right pubs in the right locations.”

Giraffe turnover up to £44.2m in the year before Tesco sale: Turnover at Giraffe rose 9.3% to £44.2m in the year ended 24 March 2013. The company had 48 sites, of which six were franchised, as of its year-end. Administrative expenses rose to £38.7m from £29.5m as the company opened new sites, increased its operations team and faced one-off costs relating to the sale of the business to Tesco in March 2013. The company paid £3.5m of costs related to its sale together with £133,000 of re-organisation costs. A Companies House filing stated: “Trading in the first six months of 2013 have been above expectations. With Tesco having acquired 100% of the share capital in March 2013 the company is well-placed to perform strongly and expand at speed. Five new UK sites have been opened in 2013 together with a site in Dubai International Airport. After several years of depressed economic times what remains clear is that eating out is now very much a key part of the UK consumer’s psyche. With the support of the new parent company, expansion is set to move forward apace.” 

Masala World operator reports £2m profit: The operator of Masala World and Chutney Mary Indian restaurants, MW Eat, owned by Ranjit Mathrani and Namita Panjabi, has reported pre-tax profit of £2,064,225 in the year to 31 March 2014, up from £1,794,919 the year before. Turnover rose to £19,065,692 compared to £17,778,477 the year prior. The company stated: “In 2011-2012, we took on concessions in Selfridges, London. We are also exploring new opportunities in the UK and overseas.” A dividend of £2,375,000 was paid. 

JD Wetherspoon asks all staff to wear aprons and carry cleaning materials: JD Wetherspoon founder Tim Martin has revealed that all staff have been asked to wear aprons and carry cleaning materials to deal with the problem of tables that have not been cleaned properly. Answering a customer complaint on the subject, Martin stated in the company’s in-pub magazine: “This is a perennial problem, particularly as our food sales increase. I’ve recently asked that all managers and staff wear aprons and carry cleaning materials at all times, which has helped somewhat. I, myself, find that our tables are not as clean as they should be, on occasions, and will try to ensure that we up our game in this vital area. Nothing is more off-putting.” 

Peyton & Byrne reports “platform consolidation”: Catering services company Peyton & Byrne, headed by Oliver Peyton, has reported a dip in turnover and profit in a year described as one of “platform consolidation”. Turnover dropped to £18,717,055 in the year to 31 March 2013 from £19,971,346 the year before. Pre-tax profit was £182,993 compared to £256,301 the year before. Ebitda was £1,191,253 compared to £1,324,252 in the year prior. A Companies House filing stated: “The directors are pleased with the progress of the business in 2013, which has seen continued consolidation and the establishment of a platform on which to grow. This culminated in the signing of a £6.25m investment deal with the Business Growth Fund in November 2012. The initial tranche (£2,550,000) has enabled the business to be in a stronger position to consider suitable growth opportunities. These have already started coming to fruition during 2013 with the winning of two new contracts, the Imperial War Museum opening in 2014 and Design Museum in 2015 and the launch of our redesigned bakery business with a flagship site in Covent Garden.” The company received a payment of £355,426 relating to a compensation claim arising from disruption caused by the 2012 London Olympics. Oliver Peyton repaid an interest free loan of £300,000 from his mother-in-law, Olga Polizzi, during the year.

Gregarious completes assignment of five Antic Limited leases, two more still under negotiation: Gregarious, the company backed by investment fund Downing that acquired the former Antic Limited leasehold estate out of administration for £1.2m, has completed the assignment of four leases from the estate – Balham Bowls Club, Pepper Saint in Cross Harbour, Tiger in Camberwell Green, White Hart in Stoke Newington. Negotiations are still underway for The Graveney and Meadow in Totting and The Wheatsheaf in Upper Tooting Road. Gregarious has ended its licence to occupy six other sites – Stapleton Tavern, Battersea Mess and Music Hall, King’s Head, Royal Albert, Jam Circus and Bohemia. Administrator Chantrey Velacott has reported unsecured creditors, who are owed £1.2m, are likely to receive 42p in the pound after HMRC reduced its claim against the company by £400,000 to £900,000. Bailiffs have been paid £12,000 in relation to their work in evicting squatters from the Bohemia in North Finchley.

Hillary & Scott plans first new-build pub: Hillary & Scott, the operator of four pubs led by Daryl Cockerill and Shane Holland, plans to build its first new-build pub at the Mercia Marina in Derbyshire. The company will be opening what it describes as a “high quality, cosmopolitan” bar and restaurant at the 74-acre South Derbyshire marina. Cockerill, who founded Hillary & Scott two years ago with Holland, said: “It’s a big and exciting project for us. It’s our first new-build operation, which gives us the advantage of creating a venue with exactly the look and feel we are after. We’re definitely looking forward to offering visitors something very stylish, with quite a cosmopolitan feel, and maybe different to what they are currently used to.” Cockerill has worked for Marston’s and Bass, as well as roles with Leicestershire-based Everards Brewery, and Greene King in Suffolk. The construction project for The Boardwalk at Mercia Marina began last month and is scheduled to open to the public in late summer 2014.

Beds and Bars reports negative short-term impact of Olympics on UK business; business bounces back in 2013: Pan-European hostel provider Bed and Bars, led by Keith Knowles, has reported a 8.5% drop in UK accommodation income in the year to 30 March 2013, resulting in a pre-tax loss of £751,804 compared to a profit of £347,683 the year before. Group turnover was £29,939,287 compared to £27,820,274 the year before. The company stated: “The directors believe the UK performance was in large part due to the influence of the 2012 Olympics. The beneficial legacy of the games in now becoming apparent. However, the group’s accommodation income streams began to show decline on the previous year’s trading from May 2012 and continued through to January 2013. Our core customers, young travellers on a budget, were discouraged from visiting the UK with a view that London might be more expensive. Instead, they demonstrated a preference for our sites across Europe. The current financial year to March 2014 has seen the UK business return to growth. UK accommodation income has returned to the 2012 financial year levels indicating that the drop experienced in the period was indeed exceptional.” Group operating profit for the 2013 financial year dropped to £972,943 compared to £1,446,778 in 2012. Ebitda was £2,629,264 compared to £2,961,127 in the year previous. The company, which derives 60% of its income from the UK, exited a leased site in Fulham during the year and sold its investment in a joint venture site in Prague whilst agreeing a franchise agreement with its partner, Bohemian Hotels, so the St Christopher’s Inn brand retains a presence in the city.

Marston’s wins planning consent for “national park” new-build in Scotland: A controversial plan by Marston’s to build a new-build pub restaurant at the entrance to Balloch in Scotland has been approved by the Loch Lomond and Trossachs National Park. The proposal by Marston’s for the 180-seater pub restaurant and 27-bed hotel on vacant land between Old Luss Road and Ben Lomond Way was granted planning permission before Christmas despite fierce opposition from residents and businesses in the village. The decision by Loch Lomond and the Trossachs National Park, which was backed by Balloch and Haldane Community Council, has sparked anger in the village. Guest house owner Alison Thomson said: “Marston’s other premises across the UK are located in business or retail parks, not in a national park. We feel the planning authority has let the community down.” Meanwhile, a plan to transform a derelict Colne mill in Lancashire into a Marston’s new-build pub and a Lidl supermarket has been submitted this week to Pendle Council.

Loungers applies to convert former Witney nightclub to new site: Cafe bar concept Loungers has applied for planning consent to convert the former Witney nightclub Izi to a new site. Loungers co-founder Alex Reilley said: “I have been very impressed with Witney town centre. It has a real buzz about it and we are keen to be part of it. There will be a forthcoming planning application to renovate the front of the building as it will be very much for daytime use and family orientated. We would like to be in by spring or summer time.” Izi closed down in September amid complaints of increasing competition and soaring rates.

Pod plans seven new sites in 2014: Healthy eating brand Pod plans to open seven new sites in 2014, founder Tim Hall has told The Sunday Times. The company reported turnover of £12.2m last year and is expected to have increased sales to £14m in 2013. It has 23 sites in London and would like to expand outside of the capital. Hall said: “I have no doubt that the demand for what we sell would be as great outside London. It’s just a question of timing.”

Nicola Horlick closes Barnes restaurant, plans Chiswick opening: City investment figure Nicola Horlick has closed her first restaurant in Barnes, south west London after 18 months. She said: “The problem is Barnes is full of mothers with children who don’t go out much at night. So although we were doing 200 lunches on a Saturday and breaking even, I need to give a proper return to shareholders.” She plans to open a second site in Chiswick by Valentine’s Day. “We have six chefs and six front-of-house staff all ready to go.” 

West Berkshire Brewery plans £3m fund-raising: West Berkshire Brewery, which is chaired by City Pub Company chairman David Bruce, is planning a £2m fund-raising. Bruce has already invested £100,000 in the company and will commit a further £50,000 in the latest round. The company was founded in 1995 by Dave and Helen Maggs and has annual sales of £1m. The money raised will be invested in expansion.

Mitchells & Butlers to open All Bar One at airport: Mitchells & Butlers will open its first All Bar One at an airport in June 2014. The venue will open at new long-haul terminal at Birmingham international airport. The opening will follow a new All Bar One at Euston train station in November last year.

McDonald’s takes down website advising staff to avoid fast food: McDonald’s has taken down a website that offered staff tips that included trying to avoid fast food. The company said in a statement: “Between links to irrelevant or outdated information, along with outside groups taking elements out of context, this create unwarranted scrutiny or inappropriate commentary. None of this helps our McDonald’s team members.” 

Deckers Restaurants reports jump in turnover and profit: Deckers Restaurants has reported turnover rose by 12% to £28,556,00 in the year to 31 March 2013, up from £25,519,000 the year before. Pre-tax profit jumped to £556,000 compared to £299,000 in the year prior. The company has decided to invest in its butchery department to develop sales to customers outside of the group.

Nightclub brand Pacha steps up digital presence: Global club franchise Pacha is to launch a virtual clubbing platform to give consumers a taste of what it is like to rave in one of its clubs from the comfort of their homes as part of wider digital drive. The platform represents a key pillar of the franchise’s online strategy moving forward and will allow clubbers to stream live videos from Pacha events worldwide for free. It aims to introduce House music fans to dance culture in the hopes of convincing them to experience a club night in person. The awareness effort is being accompanied by the launch of the Pacha Recordings store on iTunes early this year, which the business will use to sell tracks directly to fans on the platform for the first time. It is also expanding its apparel range to new markets alongside taking its Sony Playstation-sponsored ‘Pacha TV’ Channel to the US and Australia.

Three Tuns Brewery buys historic Marston’s pub in Shropshire: Three Tuns Brewery has bought the historic Sun Inn in Clun, Shropshire from owner Marston’s. The pub has a rare set of three “Molly Lane Cash Register” hand pulls. They are believed to come originally from The Cock Inn in Fleet Street, where Charles Dickens did his apprenticeship. John Russell, managing director of the Three Tuns Brewery, said: “I hope this move will reassure people that The Sun Inn, a much-loved Shropshire gem, is now in sympathetic hands. We know the Sun well and it is our kind of pub – old and crammed full of character. We believe it will benefit from being in the hands of a local brewery, which is tied into the area. We will take our time, have a good look at the place and get a good sense of what needs to be done.”

Harrods opens London’s biggest restaurant – for staff: Harrods has opened what it claims to be the biggest restaurant in London – for staff. Its new 550-seat staff canteen serves the 5,000 employees who work for the Knightsbridge store and has been created as part of a £200 million overhaul of the grade II listed building. At 28,000 square feet the restaurant, which was unveiled before Christmas, is half as big again as the one it replaced and is expected to serve thousands of meals a day. It is divided into six areas serving different cuisine including sushi, Mexican and traditional British.

Fire closes Chef & Brewer site on Christmas Eve: A fire closed a Spirit Chef & Brewer site in Caversham, The Griffin, on Christmas Eve. Part of the bar and ceiling of The Griffin were badly damaged by the blaze and the building also suffered smoke damage. A statement from Spirit said: “Upon confirming we were unable to open on Christmas Day, we immediately began contacting all of the guests who had booked with us – as a result, we managed to accommodate the majority of our guests at other Chef & Brewer pubs within the area on Christmas Day, with the rest of the guests being offered full refunds. We hope to re-open the pub as soon as possible, which we anticipate will be in mid-January.”

Hydes Brewery reports increase in operating profit on lower turnover: Salford-based Hydes Brewery has reported turnover of £16,953,975 in the year to 31 March 2013, down from £23,233,326 the year before. Pre-tax profit was £1,466,441 compared to a loss of £2,697,575 the year before. Operating profit was £1,415,429 compared to £1,129,116 in the year prior. Like-for-like sales in its managed division were up 1.3%, with food sales growing from 19% to 21.7% of overall sales. The company spent £704,000 on its new brewery, The Beer Studio close to Salford’s Media City development, and head office site and a further £1,386,000 on brewery plant, fixtures and fittings. The company stated: “We believe that managed houses provide the greatest potential for the future and we have developed two successful trading styles, a high quality food proposition and a traditional wet-led offer with ancillary food. We anticipate at least six by the end of 2013. We also intend to test out a value dining concept this year with a view to establishing a third trading style and we are actively seeking high quality acquisitions that will grow our managed business.”

Bumpkin operator Ignite Group swings into profit: Bar, restaurant and nightclub operator Ignite Group, the company headed by Matt Hermer that operates Boujis and Bumpkin, has reported a pre-tax profit of £1,009,915 in the year to 31 March 2013 after a loss of £2,392,979 the year before. Turnover rose to £11,780,221 from £11,215,116 the year before, excluding £1,412,217 of sales from discontinued operations. The company stated: “The core brands performed solidly during the year. The consolidation of start-up losses from a new overseas venture impacted the overall results for the year as did some exceptional costs associated with changes to the board. An exceptional gain (£1,792,385) was recorded during the year primarily as a result of the completion of the sale of a site from non-core assets.”

Searcy’s reports losses on turnover slightly up: Champagne bar operator Searcy’s has reported a loss of £63,506 on turnover of £34,198,446 in the year to 30 June 2013. The year before it made a pre-tax profit of £17,323 on turnover of £33,700,712. Ebitda was £1,153,000 compared to £880,000 the year before. The company reported sites with a link to the Olympics saw benefits whilst other venues saw a reduction in sales volume prior to and during the Games. Searcy’s lost its Commonwealth Club contract during the year but helped Southend Airport establish its food and beverage proposition. 

Spirit’s Fayre and Square brand promises Christmas bonus: Family pub restaurant brand, Fayre & Square is promising a second helping of festive cheer to one deserving family, by giving them the opportunity to celebrate the Christmas they missed – for free. Fayre & Square, which is owned by Spirit Pub Company, is calling on the nation to nominate worthy families whose Christmas was more of a party pooper than party popper. The winner will receive £1,000 cash as well as a family meal at their local Fayre & Square. To nominate, guests will need to get in touch via Facebook or the website at www.fayre-square.com or www.facebook.com/FayreandSquare before Friday 10th January 2014.

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