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Morning Briefing for pub, restaurant and food wervice operators

Fri 10th Oct 2014 - Propel Friday News Briefing

Story of the Day:

CGA Strategy – cocktail sales rise by 10% over two years: Cocktail sales have grown by more than 10% over the last two years—and the mojito is the drinkers’ favourite. Those are among the insights in The Mixed Drinks Report 2014, a new survey of this significant market for the on-trade from CGA Strategy. The report reveals that cocktail sales have grown by an impressive 10.8% in just two years, and that more than one in five (22%) of the country’s on-trade venues now serve them. It is the timeless classic mojito that remains the biggest selling cocktail across the on-trade. Contrary to some popular perceptions, it is not just women who enjoy cocktails, with the split between female (54%) and male (46%) drinkers fairly even. In addition, amongst the core 18-35 demographic, cocktails are becoming a drink for all on trade occasions, with consumers increasingly choosing to drink cocktails throughout the night, rather than just at the start. Cocktails are surging in popularity among young adults in particular. The proportion of under-35s who say they have bought a cocktail in the last week has jumped over the last year—from 36% to 43%. Bombs and pitchers of cocktails are especially popular. Three quarters (74%) of 18 to 24 year-olds have bought a bomb drink, while nine in ten (88%) in the same age range say they drink pitchers. London is the capital of cocktails, with more outlets serving them here than in any other region. Scotland, Yorkshire and Lancashire all have high concentrations, too. Tom Lynch, commercial director at CGA Strategy, said: “Cocktails and the bars and pubs that serve them have been surging in popularity over the last few years and our latest research emphasises just how integrated they’ve become to mainstream drinking.”

Industry News:

Customer loyalty firm launches crowd-funding campaign: Fidel, a UK-based platform that allows customer-facing businesses primarily within retail and food and beverage to set-up and run a sophisticated customer loyalty system, has launched an equity crowd-funding campaign on Crowdcube. A total of 15 investors, have offered £91,850 of its £230,000 goal in return for 10.31% of its equity. “Corporates have been leveraging ‘big data’ to make better decisions and enhance profitability for years,” the pitch states. “Fidel make these tools available to everyone by making consumer data simple, affordable and accessible.” The company has been financed by the directors since inception. Burn-rate was £85,000 in the year to May 2014. This is expected to increase to £205,000 for the year to May 2015, assuming a successful round of funding, reaching cash flow break-even by October 2015.

Punch Taverns, Star Pubs & Bars and St Austell win BBPA awards: Punch Taverns, Star Pubs & Bars and St Austell have won recognition in the British Beer & Pub Association annual awards. Punch Taverns was named Beer Champion 2014 winner for “true dedication to bringing a huge range of Great British beers to their estate of over 4,000 pubs”. Star Pubs & Bars was named Pub Champion 2014 for “working hard to secure pubs for future generations through effective investment in pubs through both physical improvements to the pub estate, and engagement in the social responsibility agenda”. St Austell Brewery won the Heart of the Community award for “going above and beyond through it work in the community”. The family business has raised over £400,000 for charity since 2003.

ALMR Benchmarking Report points towards sector recovery: Britain’s pubs and bars have consolidated their recovery – with food led, high street operators leading the way – but their ability to deliver ever greater levels of investment, growth and jobs is hampered by increasing legislative costs. That’s the key message from the industry’s authoritative Benchmarking Report, launched the Association of Licensed Multiple Retailers (ALMR) in association with Barclays. The Report – which benchmarks operating costs, business performance and market trends – shows a second year of capital investment, cost control and positive growth. It reveals average capex of 3% of turnover and like-for-like sales increasing by 5% with food-led, high street operators delivering double the sector average. ALMR chief executive Kate Nicholls, said: “Taken as a whole these findings reinforce our messages to government – we are a responsible employer and community stakeholder, well-placed to generate jobs, invest in our high streets and play a full part in addressing the challenges we face collectively as the economy grows its way out of recession. While it is good news that overall operating costs are under control, those cost lines directly linked to legislation continue to climb and reached a record high at 5.5% of turnover. Premises costs, driven by business rates, are also up significantly at 6.5% of turnover. As a result, margins have tightened and business profitability is down 2%. This has a very real price in terms of our continued ability to invest.”

Company News:

Domino’s extends alcohol sales trial, sparks controversy: Domino’s is extending a trial on the sale of alcohol at selected sites. The company is offering customers to chance to buy beer and wine to consume with their delivery pizza. A branch in St Helens is charging £2.49 for a bottle of Budweiser, £2.99 for a bottle of Peroni and three Blossom Hill options for £7.99. It is thought that around a dozen sites have been trialing alcohol sales. Domino’s is currently applying for a licence to deliver alcohol from its site in The Broadway, Newbury, Berkshire. The plan has been criticised by Newbury town councillors with its Conservative group leader Tony Stretton likening the scheme to “delivering alcohol on a platter” to underage drinkers. Coun Jeff Beck said: “We all know the situation you get. An older person will sometimes front a party and the people who are actually consuming the alcohol are under age. There’s totally insufficient protection for the young people of the district. This could potentially be very misused.” Domino’s spokeswoman Sarah McGhie, told the local newspaper that all staff would be trained on the procedures required when selling alcohol, and would be given a script to follow. “At the point of sale, if the staff member suspects that they are already intoxicated or have concerns over the customer then they [can] refuse to sell alcohol to them,” she said. “By providing all of this information during the order process, we are limiting the exposure of the driver.” A decision is due to be made on the Newbury application at a meeting of West Berkshire Council’s licensing committee on 15 October.

Pop-up cocktail company takes first pub: A pop-up cocktail company, believed up to be Sweet and Chilli, has taken its first step into the pub trade by taking over the lease on Punch Taverns’ Gunmakers in Clerkenwell. It has purchased the remaining eight years of a 20-year lease on the pub at a passing rent of £35,000 a year through agent AG&G. “It’s a great match, given that the pub already has what The Guardian describes as an achingly hip clientele and the new lessees run bars for big name festivals and major drinks brands,” said Michael Penfold of AG&G. “The Gunmakers already has a great reputation for real ale and traditional pub food so we can expect some cutting-edge touches to be added to the mix. With Crossrail coming to nearby Farringdon, the area is only going to go further up.”

Former Modern British Inns boss to open pizza restaurant in Chester: An award-winning pub licensee is opening what is planned to be the first of a chain of pizza restaurants. Ian Wade, who runs a Trust Inns outlet, the Ring O’ Bells, in Christleton, Cheshire, and his business partner John Roberts are opening the first Urbano32 on Bridge Street, Chester in mid-November. The pair hope to have up to four more branches in the west Cheshire area in the next three years. Wade, who used to run Modern British Inns, said it would be a restaurant, bar and social meeting place, with a “rustic and industrial” interior, all designed around a handmade clay pizza oven. He said: “Urbano32 will be serving sourdough pizzas, alongside antipasti and daily specials using only the freshest quality ingredients. The menu will have a progressive approach towards pizza and is committed to sourcing great seasonal and local produce. It’s hoped it will be a thriving bar scene, both before and after dining and an atmosphere where diners are encouraged to eat at the counter in a continental style.” The Ring O’ Bells, which also sells pizzas, was the winner of Best Dinning Pub of the Year at The Cheshire Life Awards 2013.

Iberica puts back Manchester opening to ‘early 2015’: Iberica, the Spanish restaurant brand, has put back the opening of its first restaurant outside London, in The Avenue in Spinningfields, Manchester, from this autumn to “early 2015”. The 200-cover restaurant will be the fifth site for Iberica and the first outside London. A refit will transform the former shop into an “authentic Spanish environment” which will include traditional silk shawls chandeliers, matador jacket lanterns, and brocade printed chairs. The space is to include a mezzanine level, as well as two huge new terraces, which the chain, led by head chef Nacho Manzano, promises will “bring the atmosphere of Madrid’s famous terrace culture to Manchester”.

Toby Smith becomes Novus chief executive: Toby Smith has become Novus chief executive, less than a fortnight after stepping down as chief executive of Stonegate Pub Company. He replaces Tim Cullum who joined the 46-strong operator in June 2013. Smith informed the Stonegate board that he was stepping down but worked for a further six months after Greene King required his successor Simon Longbottom to serve six of his 12 months’ notice period.

Premier Inn to open in the Brewery complex in Cheltenham: Whitbread is to open a Premier Inn at the Brewery complex in Cheltenham. The company used to own the Cheltenham brewery, the home of West Country Breweries, which Whitbread took over in 1963. John Bates, head of acquisitions for Premier Inn, said: “Getting construction going with our new Premier Inn for Cheltenham is great news. Not only is this an excellent location in the town centre, but it’s also a case of Whitbread coming home.” The 104-bedroom, £6m hotel is due to be completed by summer 2016, creating 35 full and part-time jobs. Premier Inn will also open a hotel on the site of the former lorry park next to the Kingsmeadow roundabout in Cirencester. As well as a 60-bed hotel, the 1.5 acre site will also include a Beefeater restaurant, creating around 50 new jobs, half of which will be offered to those who have been long-term unemployed. Meanwhile Hollywood Bowl is opening above restaurants at the Brewery complex on 10 November, taking over the site of Gala Bingo, which closed two years ago.

London Village Inns keen to acquire more as it opens sixth: London Village Inns boss Martin Harley reports he wants is to acquire more outlets as he celebrated opening the company’s sixth venture, the Westbury in Wood Green, North London, this week. The company now has two leases from Punch, one from Enterprise Inns, one from Star Pubs & Bars and two freehouses, and Harley said all six were trading well. He added that he was “always looking for freeholds and leaseholds” to add to the company’s portfolio. The Westbury is a co-venture with landlord Punch Taverns, which has invested £300,000 in refurbishing the pub, while London Village Inns has put in £100,000. Harley praised the Punch craft beer list – “the choice is much better than it used to be” – which has enabled him to stock beers from BrewDog and Meantime at the pub

Thwaites acquires Cheshire pub: Brewer and retailer Daniel Thwaites, has added to its burgeoning pub estate with the acquisition of The Ship Inn, Handbridge, Chester. The purchase was made from a longstanding freeholder – new father-and-son team, Steve and Marc Edmunds, have taken the reins as licensees. Andrew Buchanan, head of pub operations, said: “We’re delighted to have expanded our pub estate with the acquisition of The Ship Inn. It has already established itself as a jewel in Chester’s crown with a coveted food and drink offering. Part of The Ship Inn’s charm is that it has year-round appeal.” 

Davy’s repositions The Steak Exchange as casual dining format Salt Point: London bar and restaurant operator Davy’s has converted the restaurant-led Steak Exchange, in Exchange Square, to a new bar and casual dining format, Salt Point. “We have introduced a range of cocktails for after-work drinks any night of the week,” said Sarah Weir, retail operations director. “We have retained a full list of wines from our wine merchants, and a food selection from Davy’s Wine Bars, managing to blend our offer to appeal to the right market – young professionals based above and around the square. The sales speak for themselves.” 

Camerons opens new Head of Steam venue today: Brewer and retailer Camerons re-opens The Dun Cow today (10 October) following a £300,000 investment to restore the historic pub to its former glory, trading within its Head of Steam cask ale template. Camerons has been working in partnership with the Sunderland Music, Arts and Culture Trust over the last four months on the project to reopen the former ‘Edwardian Gin Palace’ located next door to the famous Empire Theatre on High Street West, Sunderland. The Dun Cow will always offer between six and ten draught craft beers, over 75 bottled craft beers, over ten ciders and seven cask beers as well as a great selection of wines and spirits as well as a range of premium gins. All the beers and ciders will rotate on weekly basis giving customers unlimited choice. General manager Anthony Ellis said: “The Head of Steam is known for its live music and this venue will be no different. We are looking for local acts to play on our regular acoustic nights and when the function room is completed later next month we will be getting some fantastic new bands playing at the Dun Cow.”

Wetherspoon eyes expansion to Street, Somerset site: JD Wetherspoon plans to add 2,000 square foot of space to its Street, Somerset (population: 11,805) site having bought the property, Peggy’s Pantry, next door. A spokesman for JD Wetherspoon said: “Subject to planning we want to make the pub a little bigger and add a garden, but keep the area at the front. The pub will be only about another 1,000 square foot and the garden the same.” The company bought the former cafe Peggy’s Pantry in the High Street, next to its existing bar, forcing the café to leave in mid-July.

Cask Marque reports Cask Ale Week drove footfall: The cask ale standards watchdog Cask Marque has reported that scans on the Cask Marque CaskFinder app were up 58% during Cask Ale Week. Paul Nunny, director of Cask Marque, said: “Ale trailers who are part of the World’s Biggest Ale Trail, covering 9,100 pubs, scan the QR code on the Cask Marque certificate. Over the duration of Cask Ale Week, the normal number of scans recorded would on average be 4,981, whereas over this period 7,880 scans occurred, an increase of 58%. The ale trailers were incentivised to scan 12 new pubs and receive a T-shirt. Over this promotion, 276 T-shirts were given away.”

Molson Coors partners Sky for sport day-pass promotion: Molson Coors is offering five million free NOW TV Sky Sports Day Passes with selected packs of Carling. For the second year in a row, Carling has teamed up with NOW TV – Sky’s internet TV service – to give consumers a free NOW TV Sky Sports Day Pass. The offer gives Carling customers free access to all seven live Sky Sports channels for 24 hours through NOW TV. Selected packs of Carling will contain a Unique Ref Number (URN) that will access a day pass worth £6.99. The URN can be activated on-line and channels can be streamed to a range of internet-connected devices, including tablets and smartphones. As a result of the promotion in 2013, the growth of Carling supported an overall 2% growth within the category. To date, Carling is performing better that the category with 11% MAT growth (moving annual target), compared to 5% average MAT for mainstream lager. This year, five million codes will be given away in 2014, compared to 3.6 million in 2013 – an almost 40% increase.

Douglas Jack – we are holding our forecasts on Punch after restructuring: Numis Securities analyst Douglas Jack has issued a ‘Buy’ note on Punch Taverns shares, with a 10p price target, after its restructuring. He said: “The £0.6bn reduction in gross bond debt and the 5.7x increase in the number of shares have taken place in line with previous guidance. Trading is also in line and we are holding forecasts even though net debt has fallen slightly more than we expected. We are holding our forecasts, which are in line with consensus for 2014E (£40.4m PBT; consensus £40.5m), although we believe consensus PBT is at least £10m too low for 2015E, not fully reflecting the post-restructuring reduction in interest costs. With lower leverage, a lower EV/Ebitda valuation and no refinancing event before 2021, we view Punch Taverns as more attractive than Enterprise Inns, but potential new regulations and falling wet-led pub beer volumes remain key concerns for both companies.”

Vianet – pub trade prospects improving: Vianet, the leading provider of real time monitoring systems and data management services for the leisure sector, has reported trading for the first half of the current financial year, ended 30 September, was ahead of the same period last year and, as anticipated, is in line with the board’s growth expectations. The company stated: “Whilst there continues to be pressure on trading in the pub sector ahead of the implementation of the Statutory Code, the Board is encouraged by several new iDraught orders received in recent months. These new orders, together with further cost reduction and efficiencies, are helping to offset the impact of pub closures.” Chairman James Dickson said: “Whilst trading in the pub sector has been challenging, Vianet has nevertheless made good progress and prospects, particularly for telemetry solutions for the coffee vending market, are encouraging.” 

Peel Hotels reports profit up: Peel Hotels has reported turnover up 4% to £8,559,808 in the 28 weeks ended 17 August. Profit before tax rose to £555,419 (2013: £202,136). Chairman Robert Peel said: “Sustained improvement in Ebitda together with a significantly less financial cost has produced a creditable result in the interim period, ended 17 August 2014. There is no reason to expect this trend not to continue and therefore shareholders can expect, after several years of disappointing results, a relative improvement in the fortunes of their company. We spent £284,021 in the period (2013: £276,226). The majority has been spent on the complete refurbishment of all the bedroom corridors at the Crown and Mitre in Carlisle. Six bedrooms have been renovated at the Bull in Peterborough now completing the refurbishment of the bedroom stock at the Hotel. We continue to improve the fabric of our product and plan to spend over £500,000 in the current financial year on capital expenditures.”

Tony Roma’s starts roll-out of ‘hipper’ chain: Tony Roma’s, the US-based international steakhouse chain that currently has just one outlet in the UK, at Braehead in Renfrewshire, Scotland, is rolling out a “hipper and trendier” series of venues that will not feature the name of their parent, as part of plans to revitalise the ageing restaurant group. The new chain, TR Fire Grill and Lounge will have signature cocktails, locally sourced ingredients and “creative” menu offering. The first one opened in Orlando, Florida last year, and a second is opening in Winter Park, Florida, to launch a whole new arm of the company with the new concept while growing the traditional Tony Roma’s brand internationally and giving existing restaurants a makeover. Tony Roma’s was once one of the leading restaurant chains in the United States, with more than 160 restaurants serving steak, ribs, potatoes and other traditional fare. Since its peak in the early 1990s, the chain has shrunk to 34 restaurants in the United States. However, international growth has brought 120 new restaurants in 33 countries into the company’s portfolio, The company has a large presence in Asia, the Caribbean and Europe and is hoping to grow in areas that have not had the same kind of saturation of casual dining chains as the US, though the only other outlet in the UK, in Kingston, Surrey, closed in 2013.

PizzaExpress gets Burberry makeover: A PizzaExpress in Basingstoke has been given a Burberry-themed makeover. The restaurant at The Whitehouse, in Winchester Road, has reopened after a six-day refurbishment, with its interior décor paying tribute to Thomas Burberry. The inventor of Gabardine weather-proof cloth, he opened his first shop in 1856, in Winchester Street, Basingstoke when he was just 21. In 1914, his company was commissioned by the War Office to adapt its officer’s coat, resulting in the trench coat. The iconic Burberry check was created in the 1920s and was used as a lining in its coats. Now the artwork displayed at the refurbished restaurant is inspired by the luxury brand’s check pattern, with a series of illustrative and typographic canvases displaying significant and memorable events in the Burberry timeline. PizzaExpress’s PR manager, Gemma Shaw, said each restaurant is being individually redesigned, often using well-known places, people or historical events from the area as the basis. “As this particular restaurant is so popular, we thought it would benefit from a refurbishment sooner rather than later,” Shaw said

Ed’s Easy Diner opens in Sunderland: Ed’s Easy Diner has opened its 31st branch, and second in the North East of England, in Sunderland. The new outlet is based in a former Build A Bear Workshop in the Bridges shopping centre. Andy Bradley, centre director at The Bridges, said: “We’re really excited that Ed’s Easy Diner has opened here at the Bridges incredibly proud that the Ed’s team has chosen the centre as its latest northern location. The restaurant is a great addition to the Centre’s food and beverage offer and I’m sure our shoppers will love the wide selection of delicious meals and drinks available – The Original Burger is already a personal favourite of mine.” Ed’s is celebrating the launch of its Sunderland branch by offering a free burger for everyone who signs up to the Ed’s Club at its website, www.edseasydiner.com. Its other north east outlet is at the Metrocentre in Newcastle. 

Jamie’s Trattoria sets Chelmsford opening date: Jamie Trattoria has confirmed it will open in Chelmsford in just under two weeks time, on 20 October, creating 40 jobs. Pizzas will be made to order every day, with the offerings “all authentically Italian, but unmistakably ‘Jamie’ too”, with a focus on pasta and sharing dishes. The company submitted plans for his latest outlet in the city centre in May this year, and will take over the former Barclays bank. 

McDonald’s forecasts Japanese loss after 25% sales slump: McDonald’s Japan is set for its first loss in 11 years after a 25% sales slump. The company was hit earlier this year by a food safety scandal in Japan, in which it was revealed that one of its chicken suppliers was breaching safety standards. As a result, customers fled. The company, which was previously expecting a net profit of £34.5 million, is now predicting a net loss for the year of £97 million. “Customers have expressed a lack of confidence in our food quality, and I take responsibility for that,” said chief executive Sarah Casanova. “It’s our intention to try to turn this business around as fast as we can.” Sales at McDonalds’ 3,000 Japanese outlets were 25% lower in August 2014 than in August 2013 – the biggest drop since the company went public in 2001.

Gordon Ramsay site in New York to close: Gordon Ramsay’s eponymous New York City restaurant at the London hotel is closing, a year after it was stripped of its two Michelin stars. Gordon Ramsay at the London opened to glowing reviews in 2006, picking up the two Michelin stars in the following year’s Guide to New York. The celebrity chef sold his financial stake in the restaurant to the hotel in 2009.

Domino’s seeks 40 more drivers in Nottingham area as students return: Domino’s Pizza has announced that it needs 40 new delivery drivers in Nottingham to cope with demand generated by students. The company has six outlets in Nottingham in total, and its stores serve both the University of Nottingham and Nottingham Trent University. Regional manager Zahid Rehman said: “With students returning to university for another year, we have seen a huge increase in demand across our Nottingham stores.” 

Five Guys names Harlow opening date: The Five Guys better burger chain has named the opening date for its 14th outlet in the UK, at the Water Gardens shopping centre in Harlow, Essex. The venue is due to open in a former Pizza Hut outlet on Monday 20 October. The chain’s 13th outlet, at the Cambridge Leisure Park in Clifton Road, Cambridge, is opening this Monday, 13 October, and other openings are due at the O2 arena in South East London and at Cabot Circus in Bristol.

Chiquito, Nando’s and Bella Italia sign up for triple-unit catering terrace at Mansfield Leisure Park: Chiquito, Nando’s and Bella Italia have all taken long term pre-lets at Mansfield Leisure Park in Nottinghamshire to occupy a newly created triple-unit catering terrace, Chiquito has agreed a pre-let on 4,000 sq ft on a 25-year lease, while Nando’s and Bella Italia have both agreed to take 3,500 sq ft on 20-year leases. The news comes after Legal & General Property won its planning appeal to extend and enhance the leisure park, in Park Lane, Mansfield. Mansfield Council’s planning committee initially rejected the plans as councillors wanted to see development in the town centre. However, its decision was overturned in August after an appeal. James Whitehill, senior fund manager at Legal & General Property, owner of the park, announcing the arrival of the three restaurants, said: “This is a great day for Mansfield and the surrounding area. Having identified the restaurant shortfall when we acquired the scheme back in 2010 and having worked hard to deliver a strong, viable and attractive scheme, the planning inspector’s decision allows us at long last to embark on this exciting new phase of development.” Work on the three restaurants is due to start in the spring and finish for them to open in time for Christmas 2015.

Pre-tax profits triple at Aston Manor: The Birmingham cider maker Aston Manor Brewery has seen sales grow significantly for the seventh consecutive year, with profits more than tripling for the year ended 31 December 2013. Aston Manor owns the Frosty Jack’s, Knights and Kingstone Press brands. Sales for the year rose by 7% to £128.1m, four times the figure in 2005, when revenue was just £29m. The increase in 2013 all came from the UK market, with sales up from £115.9m in 2012 to £124.4m. Sales to the rest of Europe fell from £3.2m to £2.7m, and dropped slightly in the rest of the world from £1.1m to £993,000. Ebitda rose to £10.5m, from to £6.1m 12 months earlier, with pre-tax profit leaping to £8.4m from £2.7m. Aston Manor, established in 1983, currently exports to about 15 countries, including the US, Russia, Ghana, Sierra Leone and Thailand. Distribution costs dropped by more than £2m to £5m. Finance director James Ellis said: “2014 has been another year of major capital investment for Aston Manor, having invested significantly in the second phase of development of our fruit mill in Stourport. In addition, in June, we purchased a national distribution centre in Aston, which is now fully operational, and is transformational for our logistical and warehousing capability. The alcoholic beverage sector is flat at best this year. Cider in particular was not supported by the combination of an unremarkable summer together with the World Cup, which is traditionally dominated by deeply discounted beer sales. Nonetheless, Aston Manor has traded in line with market expectation during the year to date.”

Hakkasan reports reduced losses: Hakkasan reduced its pro rata losses to $14.1m in the seven months to 31 December 2013 from $50.1m the full year to 31 May 2013 – the company has also begun reporting figures in dollars to reflect its growing US business. Turnover grew to $97.9m in the seven months compared to $74.9m for the full year prior. Sales grew by 31% ($23m) year-on-year, principally reflecting the growth of its nightclub in Las Vegas, together with a full-year contribution from restaurants in Las Vegas and San Francisco and the initial revenues from Los Angeles. Adjusted Ebitda has improved by $8.9m in the period, now making an overall positive contribution from the portfolio. Hakkasan’s nightclub in Las Vegas has made a significant contribution to the improvement, together with a continued strong contribution from the UK portfolio, offset by a weaker but improving performance in the core US portfolio of restaurant sand initial losses from a Los Angeles opening. The closure of Chrysan also accounted for part of the improvement year-on-year. The company now has accumulated losses of $93.8m (2012: $78.5m). The UK provided $31.5m of turnover in the seventh months while the US provided $66.4m. Franchise and management fees provided income of $1.3m in the seven months (2013: $1.8m). The company runs two Hakkasans in London, one Yauatcha site, one Sake No Hana and HKK in London. There are four Hakkasans run under management contracts in Miami, Dubai, Abu Dhabi and Doha. There are four Hakkasans in the US – New York, Los Angeles, Las Vegas and San Francisco. There are three Hakkasans and two Yauatchsa operated under franchise in India. Of the seven months, the company stated: “Whilst a short period, the substantial increase in revenue from $74.9m to $97.9m ($23m or 31%) and gross profit from $29.3m to $53.9m ($24.6m or 84%) has been driven mainly by the continuing success of the Las Vegas nightclub, together with a full period’s contribution from our restaurants in Las Vegas (opened in May 2013) and San Francisco (opened in December 2012) and the initial revenues from Los Angeles (opened in September 2013). Our London restaurants have also continued to trade well. The period to May 2013 also included the revenue from Chrysan in the UK which was closed in April 2013. We are pleased to report the significant improvement of $8.9m in Adjusted Ebitda to $5.5m for the period, which is the measure of the cash profit generated by the underlying business.”

Aaron Mellor takes sole control at Tokyo Group: Nightclub operator Tokyo Group has revealed that Aaron Mellor has taken sole control of the company, refinanced the company’s debt, with a new facility that has substantially reduced annual interest payments, streamlined overheads and centralised procurements. The announcement came in a filing with Companies House of a financial statement for the year to 31 December 2013 covering five of the 20-plus nightclubs controlled by Tokyo Industries, Digital in Newcastle and Brighton and Tokyo in Oldham, Huddersfield and Newcastle. It reported a “solid” performance amid “change and upheaval” for the five venues backed financially by Barclays, one of which, Tokyo Newcastle, was sold as part of the settlement agreement with previous shareholders, at a book loss of £1.6m, which helped reduce turnover by 17% to £5.16m for the four remaining sites. Operating profit was down to £779,000 from £1.1m in 2012. Gross profit margin fell slightly to 77% from 78%. Mellor said the group had acquired seven sites during the financial year, and continued to look for suitable sites to add to the portfolio. The Brighton site had proved “logistically challenging” because of its distance from the rest of the group, and will be rented out to a third party. A live music initiative had proved successful in pilot schemes, and current trading at the Digital site in Newcastle in particular has exceeded expectations, the report said. The company paid dividends of just under £1m during the year.

CG Restaurants slashes losses: CG Restaurants Holdings, which owns the Dirty Martini chain of bars, has slashes its operating loss by 93% for the year ending 31 December 2013,50 £92,000, from a loss of £1,36m in 2012. Turnover for the year rose 25% to £15.76 thanks to acquisitions in 2012, while the gross profit margin was up from 51.8% to 54.6%. During the year CG sold three Fire & Stone brand restaurants which, while operationally profitable, were using resources that the company’s directors thought were best focused on other, more profitable businesses, the company said in accounts filed with Companies House. However, it was hit by a lost on the disposal of short-term leaseholds of almost £1m, which after interest payable, gave it a bottom-line loss of £1.31m, down from £1.61m in 2012. However, the directors said in their report, after adding back the amortisation charge for short leasehold properties, the operating profit for the year was £968,000, a turnaround from a loss of £965,000 in 2012. Net current liabilities exceeded net current assets by £1.86m at the balance sheet date, but the company said it believed the group’s trading performance in the coming year would improve through improvements of the existing business and acquisitions of new businesses in the new year. It said the group would continue to obtain sufficient finding to pay its debts as they fell due.

Losses climb at Modern British Canteen: Modern British Canteen, which runs three Canteen outlets in London, in Spitalfields, Canary Wharf and at the Royal Festival Hall on the South Bank, saw losses before tax climb 17% to £293,000 for the 52 weeks to 22 December 2013, the company has revealed in accounts filed at Companies House. Turnover fell £655,000 to £5.79m as a result of the closure of one of its outlets in Baker Street, central London, and Ebitda margin fell from 3% in 2012 to 2%, despite a fall in administrative expenses of 9% to £4.56m, but the company maintained its gross profit margin at 75%. The company said it continued to look for sites appropriate for its expansion plans.

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