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Wed 14th Jan 2015 - Propel Wednesday News Briefing

Story of the Day:

Crowdcube raised £35.9m in 2014 – and grew investor community by 57,000 members: Crowdfunding platform Crowdcube has reported it helped 105 businesses raise £35.9 million in funding in 2014. This represents a 246% increase compared to 2013 and means Crowdcube maintains the title of UK’s largest equity crowdfunding site. In 2014, registered investors jumped from 65,000 to approximately 122,000 as investor interest increased. The increase in demand pushed the Exeter-based Crowdcube to grow staffing from 15 to 45 by the end of 2014. Offices were opened in both London and Scotland. Crowdcube stated “the year ended on a high note”, as they were selected by the government supported London Co Investment Fund (LCIF) and are expected to receive £5 million to invest in London-based tech start-ups. “2014 was a pivotal year for Crowdcube,” said Crowdcube co-founder Luke Lang. “We have continued to grow our business faster and deeper than we expected and are leading the market in terms of funds raised and innovative new investment offers such as our Venture Fund and Mini-Bond. But the crowning glory was when the UK Government recognised equity crowdfunding as an effective way to finance small businesses by giving Crowdcube £5m to invest in London’s top start-ups. This not only highlights our reputation as Britain’s number one source of finance for entrepreneurs, but it validates the entire crowdfunding model.” Yesterday, the nine-strong coffee shop chain Taylor Street Baristas, led by Richard Shaer, passed the £1.5m mark in cash raised through its mini-bond on Crowdcube. It was seeking to raise a £1.5m minimum through an 8% yield bond – a total of £1,521,000 has been raised from 426 investors. The offer has another six days left to run. This year, the company’s unaudited accounts show turnover of £3,337,000 from nine shops in the most recent year, with shop pre-central overhead Ebida of £278,000 and actual Ebitda of £110,000, producing an overall loss of £276,000.

Industry News:

Andy Emmerson to present at Propel Multi Club Conference in March: Franchising expert Andy Emmerson is to present at the next Propel Multi Conference on Thursday 12 March, held at the Lancaster Hotel, London. Andy Emmerson, who has held senior executive positions at Dunkin’ Donuts and Domino’s UK, looks at the key routes to successful franchising and the ten elephant traps of unsuccessful franchising. Operators of multi-site companies can book up to two free places by emailing

Glasgow pub ordered to pay £70,000 for illegal Sky use, biggest fine ever: Sara McIntosh and Avalon Bar Ltd have been ordered to pay over £70,000 in fines, damages and legal costs for showing Sky Sports illegally in their pub – the largest award ever made against a pub in actions of this kind. An earlier Court of Session ruling in February 2014 found Sara McIntosh and Avalon Bar Ltd in Glasgow to be in breach of Sky’s copyright by showing Sky Sports at the venue without the required commercial agreement. The Court of Session in Edinburgh also found the licensees to be in contempt of court for breaching an interdict (injunction) obtained by Sky to prevent further infringements. The court has now ordered that the licensees also pay costs, which total £58,328.32 on top of £10,000 in damages and a £7,000 fine for Contempt of Court. Alison Dolan, deputy managing director, Sky Business, said: “This landmark ruling demonstrates how seriously the courts treat copyright infringement and reiterates that Sky Sports can only be shown legally in pubs via a commercial agreement directly from Sky. Copyright infringement creates an uneven playing field for thousands of hardworking licensees who legitimately invest in Sky Sports, which is why we are committed to visiting thousands of pubs, as well as investigating suppliers, to protect our customers and ensure they are not left short-changed by illegal activity.”
PoundPub to open fourth venue in Liverpool next week: The company behind the PoundPub chain, which sells half pints of beer for £1 and pints for £1.50, is to open a fourth venue under the fascia, in Wavertree, Liverpool. The venue, Cuffs Bar, is already owned by the PoundPub chain’s parent, Here For You Hospitality, which runs a dozen other bars in cities including Birmingham, Liverpool, and Stoke. The other PoundPubs are in Atherton in Greater Manchester, Newark, and Stockton on Tees, which opened in March last year. Director Mike Wardell dismissed concerns that the business could encourage irresponsible drinking, describing his operation as “a quality product in a well-managed, controlled environment”. Wardell told the Liverpool Echo that the idea behind the brand was “going back to the basics of what a pub should be about and being the hub of the community. We pride ourselves on extremely well-managed venues where the licensing objectives, which prevent irresponsible drinking, are at the forefront of our business. Alcohol can be bought cheaper in the supermarkets. In our existing venues we have proved that concerns are unfounded. I think our critics need to give the general public more credit and realise that they are looking for good value, not necessarily to consume more.” The Wavertree PoundPub will open on Tuesday, 20 January.

Spirit Pub Company claims first points-based loyalty app in the pub sector: Spirit Pub Company’s family pub restaurant brand Fayre & Square has launched the first point-based loyalty app in the pub industry, enabling users to collect and redeem rewards and offers straight from their smart phone. The app, which is available now on Google Play and the App Store, not only acts as a digital version of the brand’s Reward Card but also uses innovative technology to review guest’s spending behaviour and present them with tailored offers and promotions that are relevant to their tastes. Kenny Skelton, digital, insight and brand director for Spirit Pub Company, said: “We’re extremely proud of our Reward App, it takes the technology one step further than traditional loyalty apps by using the data collected when guests are dining with us and applying it to provide personalised promotions. Our Reward Card Scheme has been a great success and well received by our guests since its launch last year. With our app we are using the best of today’s technology to build on this success and further develop the loyalty of our guests.” Existing members of the Fayre & Square Reward Card can log into the app using their card details and start using the app immediately. Those who aren’t yet part of the Reward Card scheme can either register through the app, or benefit from using the app’s pub finder and book a table functionality in the palm of their hand.

Greene King shareholders back Spirit bid: More than 99% of Greene King shareholders has voted in favour of its bid for Spirit Pub Company a general meeting of the company held yesterday. Rooney Anand, chief executive of Greene King, said: “It is pleasing to have received such overwhelming support for this transaction from shareholders. The combination of Greene King and Spirit Pub Company will create the UK’s leading managed pub company and deliver significant value for shareholders through the capture of attractive synergies and anticipated earnings accretion.”

Company News:

Spirit Pub Company builds new Golden Oak brand to 35 sites: Spirit Pub Company has built its new brand Golden Oak, which debuted last year, to 35 sites with the re-opening of the Bell in East Molesey. The menu has seen the introduction of new freshly prepared dishes, such as chicken and white wine pie, tomato and mascarpone risotto and hand-battered cod fillet and chips. Last October, Spirit chief executive Mike Tye said that Golden Oak was an “outstanding concept – not a gastro-pub but a high quality local”. Spirit believes the concept, which originated in the leased division but which has been “stolen” by the managed division, had the potential to be expanded to between 150 and 200 sites. The next conversion to the brand will be the Admiral Rodney in Nottingham.

Patisserie Valerie executive chairman claiming no pay: Patisserie Valerie executive chairman Luke Johnson has claimed no pay in the last financial year, according to the annual report. Johnson still owns 42.67% of the company’s shares. Chief executive Paul May earned £253,000 in the year to September 2014, up from £212,000 the year before. He also earned £3,032,000 in respect of gains on share options. Finance director Chris Marsh earned £174,000 up from £157,000 the year before. He also earned £1,516,000 from exercising share options. The annual report indicates that the cost of listing on AIM last year was £593,000.

Steamin’ Billy acquire tenth pub, first in Derbyshire: Leicestershire brewer and retailer Steamin’ Billy, led by Billy Allingham, has acquired site number ten this week with the acquisition of the Wilmot Arms Chaddesden, Derbyshire, a former Marston’s site that was acquired for circa 300,000. Allingham told Propel: “The Wilmot is Chaddesden’s oldest pub and is pretty unopposed. The demographic fits really well with us and we are really excited to take our brand into Derbyshire with nine other pubs in Leicestershire. It will be a wet-led pub offering the usual selection of real ales and craft beers with excellent levels of service in a relaxed and comfortable environment.”
Harry Ramsden’s reports December like-for-likes up 7.3%: Harry Ramsden’s has reported strong festive trading with an increase in like-for-like sales of 7.3%, for the five-week period ending 4 January 2015. As a result, the company’s year-end like-for-like sales are also ahead of expectations and the business has recorded an overall sales increase of 9.7% on the previous year. Chief executive Joe Teixeira said he believed the figures demonstrate customers’ increasing loyalty and growing engagement with the revitalised brand. He added: “Throughout 2014, we invested heavily in our people, our product offering and our estate to enhance the proposition. Clearly, our strategy has been well-received by both new and existing customers as is reflected in figures. Now that the business is in a much stronger position, our objective for 2015 is ambitious growth through our three core strands – namely, company-owned outlets, franchising and product licensing, both here in the UK and internationally.”
CG Restaurants and Bars reports strong festive trading: London bar and restaurant operator CG Restaurants & Bars has unveiled record sales figures for the six weeks to January 2015 – the group recorded its highest-ever single week of sales since its inception. The company, which owns the Dirty Martini brand, London landmark restaurant Tuttons and casual dining chain Fire & Stone, saw sales increase 4.5% on the previous year. Dirty Martini itself saw like-for-like sales up 6.2% for the period and New Year’s Eve sales rocket 14% year-on year. “These record results are huge credit to the entire team, who ensure that our unique style and quality is delivered at the highest standards day in day out,” said chief executive Scott Matthews. Last year saw two new venues added to the Dirty Martini portfolio, at Monument and St Paul’s, taking the brand to five sites in London’s core West End and City patches. Matthews confirmed that several more openings are planned for 2015 along with a major refurbishment at its renowned Hanover Square venue in late February. Both new Dirty Martini sites experienced high demand for pre-bookings and reported sales 19% ahead of those budgeted. Across the portfolio as a whole, pre-bookings represented 57% of sales for Dirty Martini during the same period. Matthews added: “Such a positive Christmas trade has strengthened our footing further and with the funding already in place for new sites in 2015, our focus is to secure the right locations.”

Caffe Nero offers free coffee in support of first Disabled Access Day: Caffe Nero will be offering a complimentary coffee at over 150 participating stores across the country in support of Disabled Access Day this Saturday (17 January). Free hot drinks and 50% off cakes and afternoon tea will also be available at a selection of Caffe Concerto stores. People taking part will be sent an e-voucher to avail of these promotions after signing up on the Disabled Access Day website. Over 200 companies and venues across the UK have pledged their support for Disabled Access Day, a new initiative that aims to encourage disabled people, their friends and families to visit somewhere new together.
Brighton cinema and restaurant scheme on hold: Developers has withdrawn from a project to turn the Hippodrome in Brighton into an £35m eight-screen Vue cinema with four restaurants. Cinema chain Vue said the site had now been sold to another developer, which would not be proceeding with the application. The Our Brighton Hippodrome campaign group said it was pleased the multiplex cinema scheme was not going ahead. Vue first revealed it was pulling out of plans to convert the Grade II listed building in Middle Street in a letter to the campaigners, who opposed the scheme put forward by Alaska Development Consultants. Vue has not revealed who the new owner is. English Heritage previously said the cinema proposals were likely to represent a “final chance to save the Hippodrome”, which has been empty for ten years.

Chop Chop hits crowd-funding target: Chop Chop, the two-site Edinburgh restaurant group that appeared on Gordon Ramsay’s F-Word, has hit its crowd-funding target on the Angels Den platform. A total of 66 investors have pledged £184,951, 115% of the £160,000 minimum target. The company is raising funds to complete the £430,000 construction and pre-opening costs of its new site in Mitchell Street Glasgow. Any surplus funds raised will be applied to the opening of a second site. Chop Chop Restaurants, was voted Britain’s Favourite Chinese Restaurant in both 2010 and 2012. The two existing restaurants turn over £1m between them and have a loyalty membership of over 20,000. Chop Chop, which was set up with two outlets in the Scottish capital in 2006, closed its Leith branch last year as it prepared to expand with a focus on city centre locations. Co-owner Roy King said several small chains of ethnic restaurants and noodle bars had taken off in Britain over the past five years, but he saw a gap in the market for “a recognisable chain of Chinese restaurants”.
Chapman Group reports profit boost: Pub, restaurant and hotel company Chapman Group, led by Chris Chapman, has reported pre-tax profit rose to £537,038 in the year to 31 March 2014, up from £302,505 the year before. Turnover was £8,403,547 compared to £8,411,630 in the previous year. Of the increased profit, the company stated: “This is attributable to the overall decrease in administrative expenses. In particular, the company has seen a marked decrease in advertising commission costs through a change of supplier and the introduction of cloud-based property management software.” Accommodation income increased by 4% to £3,015,000 because of “an increase in the number of bedrooms and the ability to react better on pricing and occupancy levels” through cloud-based property management software. 
Stonegate to re-open student pub in Oxford with state-of-the-art facilities: Stonegate Pub Company is to re-open the City Arms in Oxford on Friday 23 January, after a £230,000 investment, as a new generation student pub. The offer will include a choice of five hand-pulled craft beers, super-fast broadband connections and interactive digital entertainment. Opening daily from 8.00am the pub will be offering a coffee shop style grab-and-go counter serving tea, coffee, snacks and pastries to eat in or take-away. Also on offer are free super-fast broadband, complimentary Wi-Fi-linked printer for printing off last minute assignments, plugs and USB ports on tables for easy phone and computer charging, loan of phone chargers and a free cash machine means the City Arms will be an ideal environment for flexible working by day. To reward regular customers, the pub will be launching a new loyalty card scheme, City Arms Card, where customers can earn points for purchases, or for just being social, posting about the pub on twitter or logging onto its Facebook page, which can then be translated into hard cash to spend in the pub. There’s also a dedicated sports area with a pool table, retro game N64 and a multitude of board games. Dotted throughout the pub are eight TV screens and a giant drop down screen showing Sky Sports and BT Sport in HD, whilst outside, the pub’s large garden, will be transformed with astroturf grass, a TV screen and heated canopies. General manager George Cupit said, “Everything about the pub is different. From the moment you set foot inside it will feel a world away from any other pub and is just packed with things to do, see and enjoy. Trends in student pub going have altered significantly over the last few years and so we have diversified our business to reflect that, creating a pub that offers a total package from great food and drinks choices to the facilities and entertainment that appeals to any young student today.”
Wetherspoon set to open in Maesteg: JD Wetherspoon will open a new pub in Maesteg, Wales (population: 20,612) on 20 January, creating 50 full and part time jobs. The company has spent £1.73m developing the outlet, on the site of an existing pub the Sawyer’s Arms, in Commercial Street, and the former New Theatre. The New Theatre opened in 1914 with a musical and was soon showing films. It became a bingo hall in the early 1960s and closed in the 1990s. Haydn Thomas, of Hutchings & Thomas Chartered Surveyors, which acts for JD Wetherspoon in South Wales seeking out potential new sites for the business, said: “This is a superb site for JD Wetherspoon right in the heart of Maesteg. The development will inject a new dynamism into the town and will help boost the local economy not just through the creation of new jobs but through the confidence and wealth it will help to generate.”

Charles Wells wins play area go-ahead for former Orchid site: Bedford-based Charles Wells has won planning permission to build a new play area as part of a major refurbishment project at a former Orchid Pub Company site in Ely, Cambridgeshire, the High Flyer, in Newnham Street. Charles Wells purchased the pub in 2009 before leasing the property to the Orchid Pub Group – it was not one of the sites acquired by Mitchells & Butlers. The pub has been in temporary management since then but, according to the plans, Charles Wells has a new operator lined up to take over and refurbish the venue. Planning agent David Russell Associates told planning officers: “It will be constructed of wood, with the slides constructed from hard plastic, and finished to the highest standard, with appropriate safety matting below. The intention is that the High Flyer will be used by those not only wishing to drink, but also those having a family meal. This will ensure its future viability and its retention.”

Greene King landlady appeals to community go buy pub: Greene King landlady Germaine Cullimore has appealed to her community to buy her pub, The Crown Inn in Benson, which is listed as an asset of community value. She told a parish council meeting: “When we’re at maximum business we’re still not making any profit. That’s not to say we’re at maximum business all the time. The business is going as well as can be expected. We have been nicely busy over Christmas and New Year and the bar has become an intrinsic part of the community. Now we have families coming in and we have elderly people, which was never the case before.” The pub has been listed as an asset of community value, meaning Greene King must give locals the opportunity to buy it before it goes on the open market, although the company doesn’t have to accept any bid. The pub is currently not for sale. 

Harrods to open Chai Wu on its fifth floor: Chinese restaurant Chai Wu, a new modern Chinese restaurant, will open on the fifth floor of the department store, Harrods on 18 January 2015. The restaurant is an opulent space that can accommodate 90 guests. Chai Wu is set to be one of the most anticipated restaurant launches of the year. The menu at Chai Wu was created by Chef Jason See Meng Hwa, who specialises in Chinese cookery, and overseen by Ian Pengelley, Group Executive Chef, one of the UK’s leading experts in Asian cuisine.
Punch Taverns pub in Hampshire wins coveted Les Routiers Venue of the Year award: The Phoenix Inn in Hartley Wintney, Hampshire, a Punch Taverns pub, has been named Venue of the Year 2015 by Les Routiers Great Britain and Ireland. The accolade is in recognition of providing ‘consistent, exceptional service and hospitality’. Licensees Andrew and Sisi Ryder, who have been running the Phoenix since November 2009, were presented with their award at The Phoenix Inn. Judges praised the Phoenix Inn for its consistent delivery of high quality food, drink and service. Sisi Ryder said: “We have a young, passionate, and enthusiastic team and it is wonderful that their efforts have not only made us successful, but they have been recognised by our customers and the Les Routiers team.”

Growler Beers UK to launch crowd-funding campaign: Scotland-based Growler Beers UK has announced it is set to launch an equity crowdfunding campaign on Crowdcube in a couple of weeks and will be seeking £120,000. According to The Scotsman, Growler Beers UK debuted in the Morningside District of Edinburgh in 2013 and has since built up a customer base of 3,500 brew enthusiasts who buy keg and cask ale on draught. Founder Stuart Dinning revealed with the £120,000 he plans to open a second shop in the capital, move into Glasgow and explore franchising potential for the brewing business.

Porters set for move to Berkhamsted in mid-2015: Agent Shelley Sandzer has acted in a deal that sees Porters, the traditional English restaurant in Covent Garden, relocate to a historic market town site at 300 High Street, Berkhamsted. Porters will be opening the 3,000 square foot restaurant in mid-2015. Currently located next door to sister restaurant Covent Garden Grill at 17 Henrietta Street, Porters has served an estimated six million customers since opening in 1979. Former chairman of the Restaurant Association, and previous leaseholder for both restaurants, Richard, Earl of Bradford, stated that the redevelopment of Covent Garden had made the sad decision to relocate Porters slightly easier. Acting on behalf of landlords Lothbury Estate, Kit Alexander, of Shelley Sandzer, said: “On behalf of Lothbury we managed to secure a fantastic new tenant in Porters.” Neil Wornham, director of Porters restaurant, added: “Site selection for our relocation was incredibly important. We wanted to find somewhere that reflected the heritage that we have at Porters and would also provide somewhere memorable for customers. The new restaurant at Berkhamsted is perfect.”

McDonald’s invests €3.2m in state-of-the-at drive-thru in Cork: McDonald’s has invested €3.2m in a state-of-the-art drive-thru in Ballincollig, County Cork. The outlet was officially opened over the weekend, creating 75 additional jobs. The new restaurant features technology such as self-order kiosks and Samsung Galaxy tablets as well as an interior play area, reflecting the ‘Spirit of Family’ restaurant theme. It can accommodate 170 diners at any one time, with a further 40 seats in an outdoor dining area. “The opening of this new restaurant in Ballincollig highlights our on-going commitment to Ireland, not only with the development and refurbishment of our restaurants but also in our commitment to Irish suppliers,” said McDonald’s Ireland managing director Adrian Crean. The new restaurant brings the total number of McDonald’s restaurants in Ireland to 87, with a nationwide workforce of over 4,500 employees.

Dunkin’ Brands reports 422 new US sites in 2014: Dunkin’ Brands Group, the parent company of Dunkin’ Donuts and Baskin-Robbins, has revealed that in 2014 its US franchisees opened a total of 422 net new Dunkin’ Donuts and Baskin-Robbins, once again making Dunkin’ Brands one of the fastest growing companies by unit count in the quick service segment. Said Nigel Travis, chairman and chief executive Officer, Dunkin’ Brands: “All told, Dunkin’ Donuts franchisees opened 405 net new domestic restaurants in 2014, including our much anticipated restaurants in Southern California, and remodeled another nearly 500 locations. Baskin-Robbins franchisees opened 17 net new locations, marking this the brand’s second consecutive year of positive net development. We believe these results are directly attributable to the appeal of our two strong consumer brands and our continued focus on franchisee unit economics. For 2015 in the US, we expect to open between 410 and 440 Dunkin’ Donuts restaurants and between five to ten net Baskin-Robbins locations.”

Topland buys Feather Group to take hotel spend to £200m: Topland, led by billionaire Sol Zakay, has exchanged contracts to acquire The Feathers Group, a portfolio of eight hotels with 726 bedrooms across North West England, including hotels in Liverpool, Chester, Preston and Manchester. The acquisition, which is due to complete later this month, is the latest in an investment strategy to expand its growing leisure division through owning and operating regional hotels. Topland has now spent £200m in 13 months acquiring 28 hotels and has more acquisitions in the pipeline. Zakay, Topland’s executive chairman and chief executive, said: “I am delighted with the addition of The Feathers portfolio to Topland’s hotel platform in a strategic off market transaction which enhances our impressive track record. Our intention is to invest further in our existing hotels to strengthen performance, and to deploy significant further capital in new opportunities to grow the portfolio.” The investment in the Feathers Group adds to Topland’s existing hotel interests of owned and managed hotels, including The Royal Crescent Hotel in Bath, Menzies Hotels and Hallmark Hotels. The Feathers acquisition, when completed, will be the third portfolio Topland has have acquired within 13 months. Topland’s owned and managed portfolio stands at 29 hotels approaching 3,000 rooms, providing accommodation to both corporate and leisure guests, with some of the hotels incorporating golf courses and spas.
Restaurants and hotel plan approved after appeal: A multi-million pound leisure development that includes a pub/restaurant, two drive-through restaurants and two other food outlets, as well as an 80-bedroom hotel, at Broughton Shopping Park in Wrexham, North Wales can now go ahead after the developer won a planning appeal. Development Securities submitted an application for planning permission for the scheme in 2013, but it was turned down last September by the local authority after planning officers recommended refusal. Now the decision has been overturned at appeal after a public inquiry. Development Securities said it had a number of big name operators lined up for the site and this decision would now see it look to close contracts. Mark Krassowski, a director at Walsingham Planning, the planning agent for Development Securities, said: “We are very pleased with the decision although it was not unexpected. We already have people lined up, big national names, for the pub/restaurant, the two other drive thru restaurants, with one of those expected to be a coffee chain, and also the hotel. We can now go back to them and start to finalise contracts and at that stage start to release names. We believe that we could be on site in 2015 if all goes well. This will add significantly again to the leisure and food offer at Broughton with an additional choice of restaurants and a pub.” The Broughton retail park, which now includes 300,000 sq ft of retail space, is already close to completion on an addition to a new £13m cinema and restaurant complex due to open this spring with restaurants including PizzaExpress and Nando’s due to open, while existing restaurants at the centre include Frankie & Benny’s, Chiquito’s, McDonald’s, Prezzo and Mill House Inn.
Shepherd Neame shortlisted in two Taste Of Kent awards categories: Britain’s oldest brewer Shepherd Neame has been shortlisted for two categories in the Taste of Kent Awards 2015. The Faversham-based brewery’s Whitstable Bay Pale Ale is up for Best Kentish Beer, while The Kings Head in Wye, part of its tenanted estate, is up for Kent Dining Pub of the Year. Now in their 11th year, the awards are organised by Produced in Kent to showcase the county’s finest food and drink products. Members of the public are asked to pick and vote for their favourite producers, retailers, restaurants, dining pubs and farmers’ markets. Shepherd Neame chief executive Jonathan Neame said: “These awards are particularly special as they are voted for by members of the public. Kent has some of the finest food and drink in the country, so to be shortlisted in two categories against such impressive competition is an honour.”

Lincoln & York staffer becomes one of UK’s youngest masters of coffee: A 23 year-old staff member of coffee roaster Lincoln & York, Rebekah Kettrick, has become one of the youngest ‘Q Graders’ in the UK. The prestigious coffee tasting qualification, awarded by the Coffee Quality Institute, is held by only 44 people in the UK. She said: “Having done a law degree, I thought the toughest exams of my life were behind me but how wrong I was! It’s a great feeling to be a qualified Q Grader after almost two years of training. I’m looking forward to putting my skills to further use at Lincoln & York and celebrating my graduation from Trainee with a trip to origin.”
Beds and Bars chops debt by £15m, reveals ‘industry leading’ results: Pan-European hostel provider Beds and Bars, led by Keith Knowles and chaired by Tim Sykes, has reported a ‘truly amazing set of numbers’ as it pays down more than £15m of bank debt. Turnover rose 20% to £33,460,781 (2013: £27,939,286) in the year to 29 March 2014 thanks to a contribution from the company’s second opening in Paris (opened in July 2013), with like-for-likes up 5%. The company’s improved trading performance comes as it takes step to slash debt through a small number of freehold sales and a key freehold sale-and-leaseback. The company sold its Oasis site in Borough, London whilst retaining a short-term lease – it accounts for just 1% of bedroom stock. In April 2014, its freehold in Brighton was sold for net proceeds of £2,265,000, a site considered non-core in line with the company’s strategy to focus on European capital cities. In September 2014, it undertook a 15-year sale and leaseback of the Winston Hotel, Amsterdam, reducing the group’s gearing by realising €10.7m. The company stated: “The effect of these sales, together with the scheduled debt repayments has been to reduce the bank debt level by £15m, and to considerably strengthen the group’s ability to look at future growth and development on a sure-footing. One of the results of paying down this debt was that the existing facility with HBOS was substantially changed and the remaining facility is now on an on-demand basis. The company is in the final stages of negotiating alternative facilities that are consistent with the improved debt and Ebitda profile.” The company expects to have reduced its Ebitda to debt ratio from circa 10x to 4x by the end of March 2015. The company produced £3,731,116 of Ebitda in the year to the end of March 2014 compared to £2,269,264 the year before. Profit before tax was £1,458,276 compared to a loss of £751,804 the year before. The company’s performance has strengthened in the first half of its current financial year, with unaudited Ebitda of £3,109,000. Accommodation sales have beaten budget by £656,400 in the first six months of the 2015 FY, with a 2.1% rise in occupancy and a 3.5% price improvement. Four of the company’s 21 sites have reported Ebitda growth of more than 100%, a further 11 sites have Ebitda growth greater than 20% – and only three sites are not in double digit Ebitda growth. Managing director Murray Roberts has told a company conference that the company had achieved an outstanding UK turnaround since 2012, when sales were affected by tourists staying away during the Olympics. UK bar sales were up £797,000 in the First Half of 2015 FY compared to the year before – £30,600 per week more than the prior year without the site in Brighton. A new menu is already producing food growth after a prior “ill-conceived menu change”. In a note to staff at the end of last year, Knowles said: “For me the results we have seen over the past 24 months are simply outstanding – the focus and commitment of unit teams to raising their overall operational standards can be clearly seen in our results. The UK performance is industry-leading and team led by Murray Roberts has been outstanding.” In the most recent financial year, £16.6m of turnover derived from the UK and £15.6m from Europe.
Vanessa Hall and Steve Cash to take part Professor Chris Edger to hold Multi-Site Management Masterclass: YO! Sushi chief executive Vanessa Hall and former Harvester brand director Steve Cash are to feature in live sessions held within Professor Chris Edger, Multi-Site Management Masterclass, being held in partnership with Propel, on Tuesday 24 February at One Moorgate Place, in the City of London. Professor Edger, who has just published his latest book, Leading at a Distance in Multi-Unit Enterprises, will focus on how area managers can create organic growth through the three-step process of engagement, execution and evolution. Professor Edger currently teaches at City University, Birmingham, where a number of the sector’s leading companies send their general managers to be taught. Darren King, last month’s winner of 2014 ALMR Operations Manager award, graduated from its post-graduate Level 7 Multi-Unit Leadership and Strategy course in 2014 – as did the 2013 ALMR Operations Manager winner Barrie Robinson in 2013. Paul Charity, managing director of Propel, said: “This is a great chance for multi-site companies to refresh their thinking – and the thinking and expertise of key staff – as 2015 gets under way.” Tickets are £295 plus VAT for ALMR members and £345 for non-ALMR members. CLICK HERE for more details or email to book.

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