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Wed 23rd Jul 2014 - Propel Wednesday News Briefing

Story of the Day:

Greene King – leisure spending down in June during stay-at-home World Cup: The Greene King Leisure Tracker has found the average British household spent £180 on out-of-home leisure in June, a fall of £12 against May, largely driven down by a 15% fall in “other leisure” spending. Spend levels on eating out picked up slightly in June, after a considerable fall in spend between April and May. Despite the World Cup taking place from 12 June, the average British household cut back spend on drinking out by £3, to £40, in the month compared to May. Deep discounting on alcohol among major supermarkets coupled with the timing of fixtures and England’s early exit are expected to have played a part in influencing British households to watch the World Cup in their homes. The World Cup and continued consumer caution are likely to have contributed to a slowdown in total household leisure spend. In June, there was a 6% decline in total household leisure spending from May, which is thought to be as a direct result of people staying at home to watch World Cup games. The largest decline was in “other leisure” spending, which was down 15% compared to May. “Other leisure”, including activities such as bowling, live events and theatre, is likely to have been substituted by staying in and watching the tournament on TV. However, eating out saw modest spend growth of 5%, as the drier weather gave more opportunities for people less interested in the football to dine out. Steve Jebson, Greene King’s commercial director, said: “It has been a mixed month for leisure spending, with eating out up, but drinking out and other leisure down. The World Cup is bound to have affected household leisure decisions, with many choosing to stay at home and watch the tournament on TV. Furthermore, latest figures on consumer confidence have shown that, while people are feeling more confident about the improving economy, on a personal level they are still feeling cautious about their own financial situation.” Supermarkets also gave people a reason to stay at home, with heavy discounts on alcohol. Jebson said: “We know that people spent more money on beer to drink at home in June, as sales in supermarkets grew by 19%, another reason why this month’s figures are lower than May’s. However, we anticipate that July’s figures are likely to recover, as the weather has generally improved and there are fewer sporting events on TV.”

Industry News:

Cider sales boom in the US: Combined data from the US Department of Commerce on imported cider and the US Tax and Trade Bureau wine reports on sales of US-produced cider) show volumes up 42% in April 2014 from April 2013. US-produced cider grew 43% for the month, and imported cider grew 39%. April volumes took a slight dip, landing at 1.97 million cases, down from March’s all-time high of 2.01 million cases. Total volumes for the first four months of 2014 show case equivalents at an all time high of 7.5 million, growing 63% over the same period last year. Volumes of US-produced cider are 74% higher, though imports fell by 11%.

Chipotle posts 17.3% like-for-like sales jump: The US restaurant chain Chipotle Mexican Grill saw a 17.3% like-for-like sales increase during the second quarter ended 30 June, one of the strongest on record since the company went public in 2006. The increase in like-for-like sales was primarily driven by increases in traffic, though an increase in the average spend, reflecting menu price increases rolled out during the quarter, also boosted results. Revenue topped $1bn. The fast-casual operator said net income rose 25% for the quarter. The company added 45 new restaurants during the 13-week period, for a total of 1,681 units. Steve Ells, the company’s founder, chairman and co-chief executive said: “We’re pleased that we continued to drive excellent results in the second quarter, including one of our strongest sales comps as a public company.”

Thai brand plans 500 openings in Australia: Thailand’s Charoen Pokphand Foods is planning to roll out up to 500 quick-service Thai restaurants in Australia, a market it sees as ripe for a fast-food explosion. The company, the food arm of Thailand’s largest agriculture-based company, also plans to expand into the booming ready-to-eat meals segment as its Australian investments grow to more than $200m over the next five years. Its regional general manager, Richard Lovell, told an Australian newspaper before the opening the company’s first restaurant in the country, 1000Wat, in Melbourne: “The best-practice model for restaurants and franchises globally is in Australia. Over the next four years our target is 300 to 500 stores with a modern Thai fast-food, great value-for-money offering.”

McDonald’s to trial home delivery at Australian site: McDonald’s will trial late-night home delivery in Victoria, Australia. A McDonald’s store in South Melbourne will begin to offer the delivery service late next month, with other locations expected to follow. There will be a minimum A$25 on order and a A$4.95 delivery fee, which customers can place online, and will cater for customers in a 2.5km radius including South Melbourne, Port Melbourne and Albert Park. The move has prompted concerns from a health campaigner about easy accessibility to allegedly “unhealthy food”.

Zomato and ResDiary sign deal: Over 20 million diners who rely on the website Zomato.com to get the low-down on the best places to eat, can now take their experience one step further thanks to a new deal between Zomato and leading providers of reservation systems, ResDiary. The new partnership will allow Zomato users to actually book tables at venues that have been recommended to them. Zomato worked with ResDiary to develop a direct interface into the main ResDiary system, meaning that diners have the confidence of knowing that their booking is confirmed in real-time, whilst restaurant operators have the confidence of knowing that they have total control on availability. Mike Conyers, managing director of ResDiary, said: “We were delighted to be approached by Zomato, as their reputation as an excellent portal for diners to find great restaurants has spread around the world. Our collaboration with Zomato both adds value for ResDiary customers and broadens the choices available for diners.”

Company News:

McDonald’s reports like-for-like sales down 1% in Europe, flat elsewhere: McDonald’s saw like-for-like sales fall 1% in Europe, with operating income flat, and showing a decrease of 4% in constant currencies, for its second quarter ending 30 June. The UK and France delivered solid comparable sales and operating income results for the quarter. Germany’s quarterly performance reflected “ongoing weakness”, the company said. An emphasis on “compelling” premium menu offers, a renewed focus on the core menu and value options, and the roll-out of blended ice beverages in several markets supported the quarter’s performance, it said. In the United States, second quarter like-for-like sales fell 1.5% while operating income rose 1%. Results for the quarter reflected “negative comparable guest traffic” amid “ongoing broad-based challenges”, McDonald’s said. Looking ahead, McDonald’s US arm is intent on “strengthening the overall customer experience to effectively position the segment for long-term growth”. Key areas of focus include service excellence, enhanced marketing, and value, core menu and breakfast day part initiatives. In the Asia/Pacific, Middle East and Africa region, second quarter comparable sales rose 1.1%, reflecting strong comparable sales performance in China, as well as positive performance in many other markets, McDonald’s said. Results were impacted by continued weakness in Japan. Chief executive Don Thompson said: “Overall, 2014 is a year of strengthening the foundational elements of our business that are critical to enabling and advancing our longer-term strategies. Heading into 2014, we acknowledged that we did not expect any material changes to the operating environment this year. As such, full-year 2014 global comparable sales are expected to be relatively similar to year-to-date June performance, with July global comparable sales expected to be negative. While near-term results are expected to remain muted, sizable growth opportunities remain, and we are committed to pursuing these opportunities through continuous improvement in everything we do, from the food we serve, to our engagement with our customers, to the management of our financial resources.”

PizzaExpress begins marketing £610m bond: A £610m high-yield PizzaExpress bond began to be marketed yesterday, backing Hony Capital’s acquisition of the restaurant chain. A £410m senior secured piece, split into 7NC3 fixed and 7NC1 FRN tranches, is expected to be rated mid-Single B, while a £200m 8NC4 senior unsecured tranche is expected to be rated high Triple C. The joint book-runners are JP Morgan, Deutsche Bank and Goldman Sachs, with Bank of China as co-manager. A European roadshow will run from 22 to 25 July, before moving to Hong Kong on 28 July. The new deal is scheduled to price after this. The Chinese private equity firm Hony Capital struck a deal with Gondola Group to buy the PizzaExpress chain for about £900m earlier this month. The Gondola Group is owned by the private equity firm Cinven. Hony’s interest comes two months after PizzaExpress expanded its empire of 500 restaurants to include its first Beijing-based pizzeria. The group already runs 12 restaurants in Hong Kong and nine in Shanghai. Thomson Reuters reported in June that bankers were working on debt financing packages around the £600m mark for a variety of potential bidders, equating to around 5.5x-6x the group’s roughly £90m to £100m Ebitda.

M&B’s Vintage Inns launches weather-inspired treats: Mitchells & Butlers’ Vintage Inns brand has launched a customer reward scheme called Weather Pourcast, described as weather-inspired, one-day treats. The brand has told customers: “Let’s face it, the British weather is unpredictable at best. But at Vintage Inns, we’ve come up with an inspired solution to brighten your day. Our new Weather Pourcast brings you ever-changing daily offers that correspond to our fickle weather. So when the sun’s out, you might be in for a refreshing treat. And if it rains, there will always be something to put a smile on your face. All you need to do is find your nearest Vintage Inn and check the Pourcast Pop-up on the homepage for the latest offers. Then simply print your voucher and drop by to claim your special treat.”

Cattaneo invests in new healthy food concept: The Birmingham-based corporate finance firm Cattaneo has invested in a new quick service restaurant concept due to launch in Nottingham as part of a £400,000 funding round. Home of Fast Foods (Hoffs) has been developed by the Nottingham restaurateur Madoc Bellamy. The concept is to serve a range of healthy food quickly and at a fast-food price point. Hoffs will be targeting locations where universities, offices, entertainment centres and shopping complexes are all in close proximity, to give a high sustained footfall. The first restaurant will be launched in Trinity Place in Nottingham, with plans to build the brand and roll the chain out nationally over the next few years. Hoffs has attracted funding from a number of individual investors, including the Nottingham-based Turning Point, led by Tom Mawhood, all of whom have invested alongside Bellamy and Cattaneo. Bellamy said: “There’s a natural gap in the market for a quick-service restaurant that offers its customers a diverse choice of quality healthy food but at a fast-food price point.”

Three-Michelin-star sushi master to open in London in September: Sushi chef Mitsuhiro Araki, who was awarded three-star Michelin status for his previous restaurant in Tokyo, has chosen to open his new restaurant in the new W4 development in Regent Street, Central London The Araki will open in the autumn at 12 New Burlington Street and will be the chef’s only restaurant after his move to London. The restaurant will accommodate nine at the dining counter and six in a private dining room. Araki specialises in the simplest form of Edomae sushi, served in a traditional way. He opened Araki in 2000, when he was 34, in the residential area of Setagayaku, on the outskirts of Tokyo, but moved to the Ginza in 2010 where he received three Michelin stars in 2011 and 2012. The Araki will be part of the recently opened £250m W4 development, where around 75% of the 100,000 sq ft modern office space at 10 New Burlington Street has already been let and all of the 33,000 sq ft retail space has been let to J Crew and Watches of Switzerland. David Shaw, head of the Regent Street portfolio at the Crown Estate said: “We are honoured that the Michelin-starred sushi master Mitsuhiro Araki has chosen to locate his new London restaurant within the Regent Street portfolio. This is the latest example of how Regent Street continues to be a global destination that combines quality, heritage, style and success to deliver a world-class environment for people and business alike.”

Meat-free concept Ethos to open in September: The meat-free concept Ethos, a vegetarian fast-casual dining outlet open for breakfast, lunch, dinner or just drinks and offering a “global” menu, is to open in September on Eastcastle Street near Oxford Circus in Central London. The team behind the 3,100 sq ft, self-service, fully licensed venue say it will offer “nutritious and deliciously different meat-free cuisine from around the world”. Ethos is the brainchild of Jessica Kruger, 26. The food will be available to eat in or take away. The 74-cover venue will include indoor silver birch trees, floor-to-ceiling windows and a décor of “neutral tones” of whites, blues and gold. In addition, there will be 12 alfresco covers and the venue will also be available for private hire. Kruger said: “Ethos was born out of my frustration at the lack of creative and exciting meat-free cuisine available on the high street and the repetitiveness of the dishes offered. I hope the restaurant reflects my passion to offer and share good, deliciously different food with everyone, in a friendly, open and inviting environment.”

Cirrus Inns buys Cotswold coaching inn: Cirrus Inns, led by Alexander Langland Pearce, has bought The Seagrave Arms in Weston Subedge, near Chipping Campden, through the property agent Colliers International. The inn has eight bedrooms. Cirrus will close the pub for a week to carry out some refurbishment. Colliers International’s hotels director, Peter Brunt, said: “The Seagrave Arms is a handsome Georgian building in the heart of the Cotswolds, one of the most consistently popular visitor destinations outside of London, hence it popularity with buyers.” The previous owners were the Denton family, who have sold the hotel to Cirrus Inns for an undisclosed sum.

Peel Hunt – Max Property management will earn £40.2m fee: An analyst at Peel Hunt has reported that the management of Max Property will earn a fee of around £40m after the sale of the company’s assets to the private equity firm Blackstone. Analyst James Carswell said: “As per the management contract, 20% of cash surpluses over an 11% per annum hurdle are payable to the management team and an original cornerstone transaction. An incentive fee provision of £8.4m was made in the March 2014 accounts and [the] transaction has sped up the exit strategy; this has resulted in an increased payment of £40.3m (of which £31.2m goes to the management team and £9.1m to the cornerstone investor). The transaction is subject to an EGM that requires 50% vote approval, and the company has received support from 46% of shareholders already. We would expect the share price to rise to 169p, representing the 184p return minus the 15p dividend with a 16 July ex-dividend date. Max has taken advantage of the strong investor market to sell the entire portfolio in one transaction and, following the sale, Max will have made a compounded, annual return of 13% per annum since floating in 2009.”

Las Iguanas confirmed for Bracknell: Las Iguanas has been named as the latest addition to the new Bracknell town centre. The company has taken a 3,680 square foot unit in the new town centre on a 20-year lease. Helen Barnett, head of communications at Bracknell Regeneration Partnership, said: “We are delighted that Las Iguanas will be bringing their unique taste of Latin American food, drink and fun to Bracknell. We have now let 260,000 square feet to a fabulous mix of restaurants, retailers and leisure operators and will have more announcements to make in the coming months.”

Gastro-pub operator takes lease on hotel: Peter Heywood, who operates the highly rated White Lion gastro-pub in Hankelow, Cheshire, has taken a lease with a private owner on the Old Vicarage Hotel, the 17th century coaching inn and hotel in Holmes Chapel, Cheshire through the property agent Christie + Co. A new lease to the 29-bedroom hotel, which has been closed for some time, has been granted. Martin Davis, a director of Christie + Co in Manchester, said: “Although closed for some time, the Old Vicarage had previously traded as a 3-AA-Star hotel. With subsequent refurbishment by the freehold owner, the business proved very popular when presented to the market. We knew that it would attract interest from regional hotel, pub and restaurant operators, and it is therefore fitting that Peter Heywood should be the new tenant. With his background in operating the White Lion in Hankelow, he will undoubtedly make a success of this sleeping giant.”

Spirit invests £385,000 to convert Tamworth pub to Flaming Grill estate: Spirit Pub Company has invested £385,000 converting the Amington, on Amington Road, Tamworth, Staffordshire, to its Flaming Grill estate. General manager Shaun Howe said: “Tamworth residents were so excited to see the pub up and running again. The opening night was a real success, with great feedback from regulars and visitors alike on the delicious new menu and the fantastic interiors.”

New Moon Pub Company re-opens Sessions House after refurbishment: The New Moon Pub Company, led by David Mooney and Paul Newman, has re-open the Old Sessions House in Knutsford, Cheshire. The site has been completely refurbished after its owners admitted the amount of business it has had since it opened less than two years ago had left it “absolutely battered”. A new kitchen has been installed, along with new chairs, tables, back bar and floor. Money said: “We’ve been open two years in September and to be honest it has been absolutely battered. It has been so busy and we have been totally overwhelmed by that so we needed to make a few changes. The feedback we’ve had so far has been fantastic.”

London pub wins competition to have its beer brewed by Windsor brewery: A team from the Strongroom Bar & Kitchen on Curtain Road in Shoreditch, East London has been chosen by SABMiller to have its craft lager made and sold in London after winning a competition. The competition, run by Pilsner Urquell master brewer Vaclav Berka, selected the Strongroom’s Soundbite lager to be brewed at the Windsor and Eton Brewery and it will be sold at the European Beer Festival at the White Horse pub in Parsons Green, South West London in September. SABMiller has been delivering unpasteurised Tankovna Pilsner Urquell from Pilsen in the Czech Republic to London to the White Horse and the Strongroom. A third pub, the Draft House near Tower Bridge, will begin selling it by September.

Wetherspoon opens in Sheerness, Kent: JD Wetherspoon has opened a new site, The Belle and Lion, in Sheerness, Kent (population: 11,614). The £1.2 million refurbishment of the former Brittain and Hobbs shop in the High Street was approved in February and has created around 60 jobs.

Starbucks, Burger King and Papa John’s dragged into Chinese food scandal: Starbucks, Burger King Worldwide and Papa John’s International have been dragged into the food scandal in China, which has already affected Yum Brands’ KFC and McDonald’s. Starbucks earlier said some of its stores previously sold products containing chicken originally sourced from Shanghai Husi, which was forced to shut down its operations for selling tainted meat to a number of food firms. Burger King and the Chinese food brand Dicos said they would remove Shanghai Husi food products from their outlets. Pizza chain Papa John’s International said it has severed ties with the former supplier.

Board game cafe planned for Hackney: London’s first board game cafe looks likely to open in Hackney this year if the money to open can be raised through crowd-funding, the London Evening Standard has reported. The cafe, to be called Draughts, will stock more than 500 games for visitors to play while they enjoy a pint of craft beer and a snack. The cafe, in Acton Mews, which is modelled on a similar business in Canada called Snakes and Lattes, will charge £3.50 for members and £5 for non-members when it opens its doors in September. Co-owner Toby Hamand, a freelance sound engineer, quit his full-time job last year to focus on setting up the cafe with his girlfriend and two friends. He told the Standard: “I have always liked playing games. I think my generation has grown up playing video games. They still enjoy playing them but they do not necessarily want to play them on their computers on their own. When I was a kid, [board games] were things that you did with your grandparents, but I think they are losing that image. There is a huge revival now. It is kind of cool.” A crowdfunding page to raise cash for the project on Kickstarter is set to go live for 30 days on 1 August.

Sky News – William Grant & Son looking to buy Drambuie: Sky News has reported that the family-owned business behind Glenfiddich and Grant’s is examining a £100m takeover of Drambuie, the liqueur reputed to be made from a recipe concocted by Bonnie Prince Charlie. The news channel reported that William Grant & Sons is among an initial crop of bidders for Drambuie, which has been put up for sale by the MacKinnon family. Other suitors for the brand include Remy-Cointreau, the French maker of Remy Martin cognac, according to insiders. News of William Grant’s interest comes just weeks before the referendum on Scottish independence, and would facilitate the combination of some of the drinks industry’s most prestigious brands. The Balvenie Single Malt and Hendrick’s Gin are also part of William Grant’s portfolio, and analysts say that Drambuie would fit well alongside its other brands. Drambuie’s owners are reported to be seeking £100m for the business

30-bed Yeovil Citylodge on the market: The property agent Christie + Co is selling the freehold of the 30-bed Citylodge in the old town area of Yeovil, Somerset, off an £625,000 asking price. The lodge is housed in a restored 18th century building and has undergone a comprehensive refurbishment in the past five years. Matthew Smith of Christie + Co in Exeter said: “Prominently situated alongside other major leisure operators such as Cineworld, Bowlplex, Frankie & Benny’s and Pizza Hut, Citylodge enjoys a robust reputation with a high proportion of repeat bookings and recommendations throughout the year. A new owner will inherit a contemporarily renovated lodge that generates adjusted net profits in the region of £95,000 with the prospect to grow the business further.”

Papa John’s franchisee opens 15th site: Papa John’s franchisee Tony Singh has opened his 15th store, in Egham, Surrey. Singh joined the pizza chain in 2002 and has gone on to run multiple territories across the south east of England, including Milton Keynes, and Colchester, Essex. Papa John’s is calling on prospective franchisees to follow in Singh’s footsteps with franchise packages available from £175,000 and its “biggest and best” franchise incentive scheme running for 2014. The scheme offers franchisees with new store openings in Wales, the Midlands, the north east and north west of England and Scotland a royalty break of up to £50,000 if they join before the end of 2014, as well as discounted supply deals on equipment and marketing spend for the store launch. Papa John’s business development manager, Anthony Round, said: “We have been delighted to support Singh in the expansion of his pizza franchises over the years. Singh now successfully runs 15 pizza stores which is a testament to his hard work and ability to take full advantage of Papa John’s successful formula of ‘better ingredients, better pizza’. As a company, we are managing a programme of expansion and are looking for more enthusiastic, ambitious individuals to help us open new outlets across the UK.”

Rhubarb hires transport hub expert: Contract caterer Rhubarb has hired Martyn Barrett as its director of travel. With over 20 years’ experience at some of the UK’s best food operators, including Selfridges and SSP, Barrett is credited with the complete transformation of the food offering at London City Airport, developing the award-winning City Bar and Grill, Rhubarb Restaurant & Bar and Illy franchises. In his role as director of travel, he will run Rhubarb-operated airport locations, with responsibilities that range from product development and franchise management to finance and design. PB Jacobse, Rhubarb’s managing director, said: “Martyn will support and strengthen our management team as our travel portfolio expands. He brings significant experience and will play a pivotal role in our travel division.” In addition to operating in airports and providing bespoke catering for events, Rhubarb also runs Sky Garden at 20 Fenchurch Street, in the City, Gallery Mess at the Saatchi Gallery, in North London, Bond & Brook at Fenwick Bond Street in the West End of London and the six dining destinations at the Royal Albert Hall, including the recently opened Verdi, among others.

Brasserie Blanc roll-out begins: The Brasserie Bar Co, which also owns Brasserie Blanc, has begun an extensive expansion of its White Brasserie pub brand after funding from ESO Capital six months ago. The group aims to open 20 new pubs within the next three years, including the Hare in Harrow Weald, Middlesex, which opens next week, The British Queen in Orpington, Kent in August and The Sun Inn in Chobham, Surrey towards the end of the year. The White Brasserie Company already operates two pubs, The King’s Head in Teddington, Middlesex and The Queen’s Head in Weybridge, Surrey, both of which have shown consistent like-for-like growth from the outset. With the expansion comes the appointment of a new operations director, Paul Van Zijl, formerly operations manager with Gaucho Grill. Chief executive Mark Derry said: “The ESO funding enables us to roll out our successful pub brand and the Hare is the first step in growing our portfolio. We are confident that the Hare will offer fantastic quality food in a relaxed home-from-home environment.”

Douglas Jack – Enterprise Inns will have a tough wet-led market to buck: Numis Securities’ analyst Douglas Jack, issuing a ‘Hold’ recommendation and 125p target price, has argued that Enterprise Inns will have a tough wet-led market to buck when it reports third quarter results on 7 August. He said: “We forecast like-for-like net income being up 1% in Q3 and flat in Q4. The company is making gradual progress in many areas, but beer volumes are continuing to fall sharply in the wet-led pub segment and weather-comps in Q4 will be tough. Given this and a regulatory overhang, we advise caution. Like-for-like net income rose 1.1% in H1 aided by: easy comps of -4.2%; more growth-orientated investment (at 32% of capex); strong trading in 180 Beacon “managed tenanted” pubs; and, to a small extent, increasing central purchasing (in H1, the ratio of publicans buying centrally was: 13% for Sky; 24% for Arqiva Wi-Fi; and 6% for Brakes’ food). Like-for-like net income should be positive in Q3, having been up during the first six weeks. Subsequently, the World Cup should have helped slightly, given that 59% of Enterprise’s estate is residential wet-led (source: CGA). Q3’s weather was good, similar to Q3 2013, but weather comps will be tough in Q4 and wet-led sector volumes continue to fall. 129 pubs were sold for £42m in H1, with over 200 pubs expected to be sold this year, for a targeted £70m of proceeds. We forecast a 5% reduction in net debt this year versus a 3% decline in Ebitda enabling net debt/Ebitda to start falling (by 0.2x) from 8.1x. Bank debt, at £76m, should be paid off over the next two years. It is good that the Statutory Code does not include a mandatory free-of-tie option with open market rent review. However, this option, which could have potentially large negative consequences, is favoured by Labour and the Liberal Democrats. We expect to hold our full year PBT forecast (£121m; consensus £120m), which anticipates 0.7% like-for-like net income growth. Although debt is starting to fall more quickly than Ebitda, wet-led market trends, political risk and low tenanted portfolio disposal multiples (6-7x EV/Ebitda) justify caution, in our view. We are reducing our target price to 125p, equating to 9.7x 2015E EV/Ebitda (Punch Taverns: 9.5x)”.

Aveqia launches crowd-sourcing fund-raising on Crowdcube: Aveqia, the Swedish interactive restaurant brand founded by the Michelin-starred chef David Berggren that allows groups to cook with Michelin-starred chefs and “bond through a shared gastronomic journey”, is crowd-funding on Crowdcube with a view to raising £300,000 in return for 10% of the equity in its UK arm. The pitch states: “The Aveqia brand first opened in Stockholm and now have their eyes on the London market through their new company, Aveqia Farringdon with their first restaurant currently located by St Paul’s Cathedral. The Swedish proof of concept has welcomed corporate guests from Goldman Sachs, Deloitte and JP Morgan amongst many more. The flagship venue in central Stockholm houses six kitchens and a capacity of 160 guests per session, with the smaller Gothenburg site accommodating half of that. The two venues entertained approximately 12,000 guests between them in 2013. In Stockholm, revenue per person amounted to an average of £150 in 2013 and the total revenue reached £1.6 million with an EBIT margin exceeding 22%. Stockholm is a city of about 1.4 million inhabitants compared to London with 11.9 million – the London market houses great potential and could be expected to be seven to eight times larger than the Stockholm market. With the first UK flagship venue up and running at St. Paul’s, efforts for the future will be focused on reaching full capacity and maximising profit. A successful round on Crowdcube should give Aveqia UK the financial room to wholeheartedly focus on marketing, brand-building and developing client relationships. When initial goals have been reached at the flagship venue at St Paul’s, Aveqia’s attention will shift towards establishing additional flagship venues in new locations, first in London and then other major UK cities.” The Aveqia business plan shows turnover of £9.95m by June 2017 with pre-tax profit of £1.84m and Ebitda of £2.62m. The pitch adds: “We believe that a likely exit strategy is either a strategic sale or an IPO. Interested strategic partners/buyers are likely to be found among hotel chains/operators, travel agents/tour operators, cruise-lines, companies in the hospitality sector or financial institutions. Most of these actors can find very interesting synergies between their own and the Aveqia business, as soon as Aveqia gets some critical mass in the market place. The management team of Aveqia fully understands the importance for investors of liquidity and would like to achieve a ready market for Aveqia shares within five year at the latest, but preferably after Year Three. The base-case presented in this material is based on a total of five Flagship units and 30 “Aveqia At …” units by the end of the fifth year. If the plan has been implemented with satisfactory results over the first two years, management will consider increasing the speed of new openings, based on external bank financing. This can obviously increase the speed of growth and profit. The present valuation of Aveqia is £3m. Following the base-case and with an Ebitda multiple of ten the value of the company after year five would be about £39m.” The general manager is Michelle Cruz Garlick, who has worked at Feng Sushi. Investors who invest £50,000 or more are invited to bring up to nine guests to an exclusive evening at Aveqia in the Krug Kitchen. The pitch continues: “Guided by top Michelin star chefs, the Krug experience promises to be a true journey of the senses, culminating in a four-course feast with selected Krug champagne to every dish.” The Aveqia restaurant at St Paul’s on St Bride Street. It features five state-of the-art, kitchen and dining room studios accommodating up to 80 guests, as well as a private bar and lounge. 

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