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Sun 18th Jan 2015 - Update: Honest Burgers, Giggling Squid, Wagamama
Active Private Equity takes Honest Burgers stake: Private equity firm Active, which has investments in Leon and the Evans cycle shop business, has taken a 50% stake in better burger chain Honest Burgers. A total of around £7m is thought to have been invested in return for 50% of the business. Honest Burgers was founded four years ago in Brixton Village, south London and currently runs nine branches – it is expecting to add five more sites in the next year and is currently in legals in Dalton and Shoreditch. The business, which on track to achieve Ebitda of circa £1.8m in its current financial year, was founded by Tom Barton, Phil Eeles and Dorian White - Barton and Eeles had been providing outdoor catering at festivals before joining up with Waite who had a restaurant background. The trio will continue to run the business. Spencer Skinner, of Active will join the board in the wake of the deal.

Giggling Squid reports turnover boost; eight sites in legals: Giggling Squid, the Thai chain led by Andy and Pranee Laurillard with ambitions to become the UK’s first national chain, has reported turnover rose to £4,546,747 in the year to 31 March 2014, up from £2,710,638 the year before. Operating profit was £45,850 compared to £281,950 the year prior. Profit before tax was £4,153 compared to £257,665 the year prior as head office costs rose from 2.4% to 7% of turnover as the company prepared for expansion. There were pre-opening expenses of £251,918 compared to £48,000 the year before. The company stated: “Giggling Restaurants has enjoyed another year of strong growth as we continue our journey toward being the UK’s first national Thai restaurant operator. Substantial new banking facilities with Barclays and a strong new site pipeline make us optimistic of continuing the current growth trajectory into next year and beyond.” Andy Laurillard told Propel the company expects to hit £7.7m turnover in the current financial year with ten sites currently trading, with Ebitda of circa £1.4m and average site Ebitda of 23%. Average return on capital employed is 97%. Currently, eight new sites are in legals or confirmed - the latter category includes a site in Clifton opening on 10 February and Salisbury on 24 March and a site in Chichester subject to the planning process. Laurillard added: “It’s been an exciting 18 months, bringing great neighbourhood Thai restaurants to five new towns, dealing with the flood in Hove and ramping up for further growth. Our investments in systems, processes and people stand us in good stead to improve quality and margins as we grow. We are still having great fun and we hope to up our rate of openings to seven/eight restaurants a year.”

Moody’s assigns Wagamama B2 rating on £150m fund-raising: Ratings agency Moody’s has assigned a B2 rating to a £150m fund-raising by Wagamama’s holding company Mabel Mezzco. The agency stated: “Outside of its UK operations, Wagamama has 34 restaurants across 15 countries, as of December 2014. However, its earnings remain concentrated on its core UK operations, accounting for over 95% of the group’s Ebitda in FY13/14. Its four directly operated US restaurants currently contribute around £1 million to Ebitda and the group’s international franchise operations (30 restaurants) currently do not contribute materially to Ebitda. The growth of the UK casual dining industry in recent years has been supportive of Wagamama’s growth, with Wagamama seeing positive like for like revenue growth for each of the last four quarters to November 2014. Wagamama’s strategy is still for growth in its core UK market, planning to open around 40 new restaurants in the UK in the next three years. Moody’s views Wagamama’s near term liquidity to be adequate. Moody’s anticipates Wagamama will have negative free cash flow of around £6m to £8m over the next 18 months, as it continues to use internally generated cash for the expansionary capex necessary to achieve the rapid growth it is targeting. However, following this refinancing, the group will have around £21 million in cash and a fully undrawn £15 million super senior RCF, maturing in 2019, providing a good initial liquidity cushion. Also, Moody’s acknowledges there is an amount of flexibility in Wagamama’s capex programme, with maintenance capex at around 3% of sales and the majority of the capex relating to discretionary expansion capex. To November 2014, Wagamama reported revenues of £181.1 million and Ebitda (unadjusted) of £26.3 million.” Wagamama is owned by Duke Street Capital

Cask Marque grows its team: Cask ale accreditation body Cask Marque has made two key appointments. Keith Bott, previous chairman of SIBA and owner of Titanic Brewery joins us as a non-executive director. He said: “I’m delighted to join the board for this incredibly important quality initiative. I think it’s hugely important that we concentrate on the quality of beer and convince the consumer that beer should be their drink of choice.” The second appointment is Edward Theakston as national account manager in the North of England. He will be working closely with Annabel Smith who will now take on a role as Cask Marque’s training consultant. Theakston said: “I am absolutely delighted to be joining Cask Marque. I believe that we have been on the same wave length for many a year in trying to improve the customer’s confidence and knowledge of cask ale in all the Great British pubs. Cask Ale is one of my great passions and I will hopefully be able to bring some of my experience to the benefit of all. There is no other institution like a pub and to be able to drink a pint of top quality Cask Ale with friends in one is to me the ultimate pleasure. So if I can help in any way I will be thrilled.” Paul Nunny, executive director of Cask Marque, said: “To deliver our plan you need the right people in place. With Keith and Edward joining an already highly successful team we will be both strong in knowledge and experience and ooze passionate about cask ale, beer quality and the benefits it can deliver commercially.”


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