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Morning Briefing for pub, restaurant and food wervice operators

Mon 23rd Mar 2015 - Crowdfunding Big Easy projects sales of £31.5m from four sites
Crowdfunding Big Easy projects sales of £31.5m from five sites: Big Easy, the US-style barbecue and lobster shack restaurant with two sites in London that is looking to raise up to £5m through a 8% interest three-year mini-bond, has projected sales will reach £31,500,000 (with pre-exceptional Ebitda of £5,863,000) in 2018 when it has added two sites. Investors can also be paid 12% return in restaurant credit. Big Easy wants to spend £3m on a new 11,000 square foot restaurant in Canary Wharf that is projected to produce £10.5m of annual sales. The company has reported that its three existing sites, including one in Covent Garden and one on the Kings Road, are set to turn over £13,282,000 this year – it has one month of its current financial year left. The initial mini-bond target is £3m, which will be used to develop the 11,000 square foot Canary Wharf site with a view to opening in 2015. The company has heads of terms agreed on lending of £4.75m from a major high street bank if its mini-bond fails to hit the target. The company states that if the maximum £5m is raised the surplus will be used to open a 5,000 square foot restaurant in spring 2016 at a cost of £1.5m. The remaining £500,000 will be used to cover working capital and pre-opening expenses. The original Big Easy on the Kings Road has delivered 6% like-for-like compound growth for 20 years. The second Big Easy opened in March 2014 and is set for £6.5m of annualised sales in the first year. The proposed Canary Wharf site, for which it holds a signed 15-year lease, will have 300 covers inside and 100 covers on an outdoor terrace with views over the water – it will be the first Big Easy site that opens at 7am for breakfast. The company also reports that it has been approached by landlords from all over the UK, with a view to securing a Big Easy opening. The company states: “We estimate that in Financial Year 2016 and Financial Year 2017 sales will increase 45% and 48% respectively, resulting from the opening of the Canary Wharf restaurant and the smaller restaurant in spring 2016.” The company also reported it signed an agreement in April 2013 whereby it receives a share of the proceeds of an expected future sale of the long lease of its Maiden Lane, Covent Garden property. “We expect a sale to materialise during Financial Year 2016 and the share of the proceeds to be paid to Big Easy is projected to be £4m.” The company said that, under the same agreement, is received an advance of £1.25m from the landlord to part-fund the fit-out of the restaurant, which will be repaid from Big Easy’s share of the proceeds arising from the sale of the property. If the sales does not materialise, Big Easy will pay off the advance over five years starting from August 2014, when the full rent for the property became liable. The first 100 people who invest £5,000 or more will become part of the 100 Club and receive one free meal up to the value of £50 each quarter. Big Easy was founded by Paul Corrett, who is currently chairman. Noel D’Arcy, who worked at Mitchells & Butlers for 25 years, is managing director, Mayuri Vachhani, who has worked at Ed’s Easy Diner and McDonald’s, is finance director. Kevin Todd, the former Mitchells & Butlers executive and Rosinter managing director, has joined as non-executive director. So far, 18 investors have pledged £57,500.

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