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Thu 26th Nov 2015 - Propel Thursday News Briefing

Story of the Day:

Draft House goes early on Living Wage, launches career development path, maps out expansion: Under the banner “Higher, Fairer, Clearer”, craft beer pub group The Draft House has this week introduced the National Living Wage for all hourly staff, five months before the government’s implementation date. This is accompanied by a ‘Career Progression Plan’ for staff, launched at an ‘All Company Meeting’ at the pub group’s Seething Lane site on Monday morning, which shows a clear and swift route to senior roles as the company expands to ten sites. Draft House, which launched two pubs in its financial year ending October 2015, announced plans to launch ‘at least’ a further three sites before October 2016 taking its tally of pubs to ten. The long-awaited Old Street Roundabout site in the Bower development should go on site in January for a spring launch and the company is in “legals” on a further two sites, including what may become its first ex-London unit. The group’s expansion will mean the creation – at senior level – of 12 supervisor roles (pay of up to £9.15/hour + bonus) and four assistant manager roles as well as three kitchen manager and three general manager roles. In January, Draft House will be recruiting at a junior level and is aiming to fill the senior roles from within. Ebitda for its most recent financial is forecast to be in excess of £650,000, up 46%. Like-for-like sales are up 4% against stiff comparables. Founder Charlie McVeigh said: “We’ve had an amazing year at Draft House this year. The launch of our Career Development Path and the early adoption of the National Living Wage shows, I hope, our commitment to our amazing team. Our goal is to make Draft House the most exciting place to work in the pub business. Given the quality of the people working for us now, the available new job opportunities and our ability to quickly progress ambitious beer-types through the ranks we think we are already well on our way to achieving this. But it’s not just about money. Draft House is also super-fun with lots of brewery trips for the team in the UK and abroad as well as huge opportunities to develop via our package of internal and external training. Most importantly, at the heart of it is the opportunity to learn about, serve, sell and drink the finest beer available to humanity. What’s not to like?”

Industry News:

Final panel line-up confirmed for Propel and Elliotts Advanced Marketing Masterclass: The final panel line-up for the inaugural Advanced Marketing Masterclass has been confirmed. Elliotts strategy and development director James Hacon will leads a discussion with newly appointed Thai Leisure Group marketing director Iain White-Duncan, ETM Group group marketing manager Zoe Knowles and Greene King partnership director Russell Danks about where they see success, their plans for the future and other topics discussed throughout the day. Propel is partnering leading sector public relations and marketing firm Elliotts for the event, which takes place on Thursday, 14 January at One Moorgate Place in London. The day will provide an insight into all aspects of marketing including contributions from Novus Leisure and Brazilian barbecue restaurant Cabana about some of the marketing initiatives they have used to improve results for their business. It will also include the best ways to recognise and tell a brand’s story to maximise its PR or social media potential and how to develop and deliver effective digital initiatives. There will also be the latest insight into consumers’ behaviour to help companies develop marketing strategies around their customers as well as how to brief and work with an agency effectively. Tickets are priced at £295 for Association of Licensed Multiple Retailers (ALMR) members and £345 for non-ALMR members and are available by emailing Adam Dickinson on

MyLahore eliminates sending waste to landfill through new partnership: MyLahore, the brand that offers a self-proclaimed British and healthy twist on Asian food, has eliminated sending waste to landfill sites through a new recycling partnership. The company has teamed up with waste and resource management company FCC for the initiative. Since introducing new systems at its four Bradford and Leeds venues, it has changed working practices to improve its green credentials and also achieved significant cost savings, reports the Bradford Telegraph & Argus. Under the new system, staff are responsible for separating glass, food, mixed recycling (plastics, cardboard, some metal, paper) and general waste. Cooking oil is also harvested, cleaned and recycled with assistance from FCC, which also collects, processes, reuses and recycles the waste. Before the initiative, MyLahore’s flagship Bradford premises had been creating about 39 tonnes of waste each year with nearly 33 tonnes being sent to landfill. Now, almost 25 tonnes is recycled while more than six tonnes of food waste is sent to generate electricity. The remainder goes through a process to remove any recyclable material with the leftover material again being used to produce electricity, with zero waste going to landfill.

Liverpool to stage first Restaurant Week in January: Liverpool will stage its first Restaurant Week in the new year. The Liverpool BID Company is promoting the event, which takes place from 25-31 January, with restaurants, cafes and diners based in city central or commercial business districts invited to get involved by offering a set discount for a meal. It will be using its own online platforms, which reach more than 75,000 people a week, as well as the This Liverpool app and local media to publicise the offers. The themed week aims to address the slowdown in dining out after Christmas. Liverpool BID Company events manager Tracey Crosbie told the Liverpool Echo: “Liverpool Restaurant Week is a great opportunity to showcase the quality and variety of the city centre’s food sector in what is traditionally a quiet month. It’s a win-win for both the eatery and the diner and we’ll be looking to build on the success by hosting future Restaurant Weeks.”

Eataly to open second New York site with more fresh produce: Eataly, the Italian foodservice brand that is aiming to open in London in partnership with Selfridges, is to open a second site in New York in mid-May 2016 at the World Trade Centre with a greater emphasis on fresh produce. Eataly co-founder Oscar Farinetti said: “There will be more space for the pizza and the pasta (and) more space for the fresh products and less space for the dry products. Every new store of Eataly is different and I hope is better.” Farinetti created the first Eataly in Turin, Italy, in 2007. A mixture of various markets with multiple restaurants, he partnered with Mario Batali, Lidia Bastianich and Joe Bastianich to bring the concept to the United States and settled on New York as its first domestic location, which opened in 2010. The new spot is a follow-up to Eataly’s very popular location in the Flatiron district, on the ground floor of the old Toy Building. It will be the company’s third US location but not the last. A Boston site opens later next year, followed in 2017 by one in Los Angeles. The new site in New York will occupy 41,000 square feet.

ALMR and BBPA welcome rate relief extension but say government needs to deliver on reform: The Association of Licensed Multiple Retailers (ALMR) has welcomed the extension of business rates relief for another year in yesterday’s (Wednesday, 25 November) Autumn Statement but reminded the government of the need to implement a root and branch reform to bring about a fairer deal for licensed hospitality businesses. It has also sounded a note of warning over the introduction of an apprenticeship levy and warned additional cost burdens are likely to affect existing training budgets. The ALMR also welcomed the decision not to cut police budgets. Chief executive Kate Nicholls said: “The extension of the small business rate relief for another year is certainly welcome as this is something the ALMR has consistently pushed for. It is disappointing, however, to see that once again we are in a position of urging the government to hasten with real and meaningful change to the business rates system and to bring about root and branch reform. This is increasingly a system that sees business relying on multiple discounts and allowances and is a recipe for confusion or avoidance, something the Treasury has already highlighted.” British Beer & Pub Association chief executive Brigid Simmonds said: “The extension of small business rate relief for another year is welcome, and is worth £25m, and is something we had specifically requested. One third of pubs will qualify, 15,000 premises, in total. However, it is very disappointing the Chancellor has not extended retail relief for a further year – this is effectively a £1,500 tax increase for the majority of pubs, and will add £46m to pubs’ rates bills. Retail relief was providing a discount for pubs with a rateable value of £50,000 or less, which is 75% of all pubs. This is a particular problem in the run-up to the revaluation in 2017 as rates bills have become out of kilter with the value of individual businesses. Britain’s pubs face a total tax bill of £7.3bn per year, so we will be keeping up the pressure for further measures, such as more action on both beer duty and business rates, as we move towards the Budget in March. I do welcome the announcement that small businesses like pubs will typically not be burdened with the apprenticeship levy, as this would have placed an excessive burden on what are mostly small businesses. It is crucial that the levy system is straightforward and allows those that pay into the levy fund to access their full contribution to support apprenticeships. I also welcome the £40m for Visit England to fund product development, given the vital role that pubs play in the wider tourism industry.”

Company News:

OHH secures fourth site, plans £350,000 investment with Enterprise: OHH Pub group, led by Mark Warburton and based in the West County, has unveiled a joint venture with Enterprise Inns that will see the group open a fourth site in the spring. The two partners will make a £350,000 investment to transform the George Inn in Broughton in North Devon, to bring it up to the standard of OHH’s other properties which have five AA Stars. The Swan and Bear in Chew Magna near Bristol has just achieved the rating to bring it in line with their Old House at Home near Castle Combe in Wiltshire and Northey Arms near Bath. The Bear and Swan currently has four bedrooms rooms which were introduced this year, with two more to be introduced the New Year. The Northey has just completed an annexe with the construction of five more bedrooms and a fully equipped conference room for business meetings. The company expects to announce a fifth site in the coming weeks and has plans to expand quickly to achieve double figures within five years. “Whilst turning a profit is vital, it is important to operate a company of which we are extremely proud – I believe we now laid the ground work from which to create a substantial enterprise,” said Mark Warburton, managing director. “We’re a family firm which has been in the licensed trade for over 30 years, with considerable experience of the business, and will remain ‘hand-on’ as we recognise the importance of having a motivated staff and understanding changing customer needs.”

Arc Inspirations confirms £1.4m Banyan opening in Leeds: Arc Inspirations, the Leeds-based multi-brand bar and restaurant operator, is to invest £1.4m in opening a new Banyan Bar & Kitchen site in Leeds. Set to launch in March 2016, Banyan Bar & Kitchen will be situated in The Old Post Office building, Leeds City Square, following the procurement of the 8,000 square foot former Loch Fyne premises. The launch will expand Arc Inspirations’ “stylish, genuine and beautiful” Banyan Bar & Kitchen brand to a total of four sites throughout the north of England, and follows the successful new opening of the 250-cover Exchange Square venue in Manchester. Martin Wolstencroft, chief executive of Arc Inspirations, said: “I am extremely proud to have exchanged on Loch Fyne in Leeds City Square following a highly competitive acquisition. It is a beautiful building in a central location with a superb south facing terrace accommodating 120 covers. We will be investing £1.4m to transform the site into our stylish and genuine Banyan brand, consequently creating 60 new job opportunities in the city. The fourth Banyan Bar & Kitchen complements our collection of venues in Harrogate, York and Manchester and I look forward to the increased choice and exceptional customer service it shall bring to Leeds’ food and drink landscape.”

New restaurant and micro-brewery concept opening in Lincoln tomorrow: A new restaurant and micro-brewery concept is opening in Lincoln tomorrow (Friday, 27 November). Lee Thomas is behind the Cask Restaurant and Brewhouse on the site of the former Roman’s Place restaurant, which sits next to the outskirts of Lincoln Castle. About £100,000 has been invested in the venture where diners can order pizzas cooked with an Italian brick pizza oven, watch its micro-brewery in action and taste beers at different points of brewing. They can order games to be brought to their table, there will be football tables to play, and people can even pick the songs they’d like to hear on a virtual jukebox phone app. The new business has created 12 jobs and could be the start of further ventures for Thomas. He told the Lincolnshire Echo: “In around 1900 there was a small brewery on the site where the restaurant now stands. It was called Ellis’ brewery and so it is nice I feel that the site has somewhat come full circle. We knew what we were looking for and it seemed to fit the bill. We have taken it on a lease, but long-term. Obviously nothing stands still and you need to stay on your toes, but once this is up and going we will be looking at other ventures.”

Brighton ethical chicken brand Hen planning further crowdfunding next year for third site: Hen, the ethical chicken brand founded in Brighton by Philip Ilic that is currently looking to raise £100,000 on Crowdcube, is planning a new round of crowdfunding next year for further expansion. The company is offering 11.76% equity as it looks to raise funds to expand into London by opening a second site among other projects. So far it has seen 61 investors pledge £27,370 with 21 days left. The largest investment to date is £4,260. But responding to a question about planned future raises, Ilic said further crowdfunding was in the pipeline to open its third site. He said: “We will need to raise the next round of finance in late 2016 to open a third site in again a high profile location in London. There are a few projects we are working on though that will not need much more finance after this round if at all. The first one is the franchise arm of Hen, which I hope we can fully set up with the help from the crowd! After this is fully operational, very little further funds will have to be invested, and the franchise is very scalable as a business model. The second project will be the Hen Hot Sauce business, which we are currently designing the bottles for and are excited to start selling them in our shops, as well as getting them into independent shops/supermarkets across the south east and London.”

BrewDog appoints new head of production: Scottish brewer and retailer BrewDog has appointed Matt Licklider as its new head of production. Licklider, who hails from St Louis in the US, has been working in the brewing industry for over 23 years including as director of brewing and quality at the Craft Brewing Alliance. Before getting into brewing, he worked on engineering and installing canning lines all around the world. Licklider said: “I’m here to assist in the transition over from Site 1 to Site 3 (new brewery site at its headquarters in Ellon), but also to help elevate the team and make our beers consistently incredible. I think the quality of BrewDog beer is amazing, it’s just to continue to elevate it – to challenge the things that we do, how we do them, how we brew beers, to make sure we’re always striving to do things better every time. All the tanks are in place (at Site 3), they are putting up the piping – I was looking how we can grow into the site as we go down the road. I’m excited, it’s a beautiful brewhouse and I’m excited to get to the stage when we are able to brew the first batch of beer over there. We’re still on schedule for March!” BrewDog said: “We’re psyched that Matt is now part of the BrewDog crew – his decades of experience and industry standing will ensure our production becomes even more sophisticated as we move into our new brewery.”

Waitrose continues sushi bar roll-out by opening second site in Bath: Waitrose has continued rolling out sushi bars in its supermarkets by opening a second new counter in Bath. The supermarket has launched the counter at the city centre store in co-operation with Sushi Daily. The counter is headed by a team of skilled sushi artisans, who prepare fresh products in front of customers throughout the day. Waitrose Bath branch manager Nigel Huxley told the Bath Chronicle: “These are exciting times for our Bath customers and the arrival of the new sushi counter underlines our determination to make sure we continue to improve and innovate. Our customers’ lifestyles are changing with the growth of eating on the move – and the investment we have made during the last few years has been designed to respond to that shift.” The first Sushi Daily counter opened last week at Waitrose’s new shop in Battersea, south London, and the intention is to roll it out to up to 50 branches across the country. According to Waitrose the new bar builds on the £10m makeover the Bath store underwent three years ago when it tripled in size and became one of just seven Waitrose Food & Home branches in the UK.

Brighton hotel sold for £28.2m: McAleer & Rushe has sold the Jury’s Inn hotel in Brighton to the Charities Property Fund, managed by Savills Investment Management, for £28.2m. The hotel has 234 bedrooms and is centrally located adjacent to the train station. It was completed by McAleer & Rushe in 2008. The Charities Property Fund, which passed the £1bn milestone in assets under management in September, also acquired the Jurys Inn hotel in Derby from McAleer & Rushe earlier this year. McAleer & Rushe property director Stephen Surphlis said: “We think there is a very strong investment story for Brighton and are confident of securing headline rents for City View. The hotel has performed very well but we decided to take advantage of the strong demand for regional hotel assets and the uplift in covenant strength following Lone Star’s acquisition of Jury’s Inn in January.” McAleer & Rushe was advised by Steerforth Partners. The Charities Property Fund was advised by Cooper Rose and Gerald Eve.

Patisserie Valerie opens new site at Britain’s largest outlet shopping centre: Patisserie Valerie, the company that has sector investor Luke Johnson as executive chairman, has opened a new site at Britain’s largest outlet shopping centre. The company is one of a number of new retailers to open at the McArthurGlen Cheshire Oaks Designer Outlet in Ellesmere Port. A Cheshire Oaks spokesman said: “We’re very excited for some new arrivals and the renovation of several brands at the centre. From homeware and clothing, to accessories and food and drinks, the new stores and restaurants offer even more choice than ever; ensuring our shoppers enjoy a superior experience and have everything they need for the year ahead.”

New burger and craft beer concept to open at Brighton hotel: A new bar and restaurant concept is being opened in Brighton as part of £3.5m development of a seafront hotel. Stock Burger Co, which launches on Friday, 11 December, will be a key part of Kew Green Hotels’ Holiday Inn Brighton Seafront in Kings Road and have its own separate street entrance. It will specialise in gourmet burgers and specialist craft beer as well as cocktails and boutique spirits. The craft beer selection will be supplied by Naked Beer Co, the Brighton Bier Brewery and Marston’s. The spirits line-up will include artisanal products from Blackdown Distillery in West Sussex. A premium coffee offering will be provided through Brighton-based roastery Small Batch Coffee, which is backed by sector investor Luke Johnson. The venue will have a central island bar and large communal tables placed at a high level to create “a social hub” complemented by private booths and banquettes around the edge. It will boast a glazed retractable frontage that opens up onto the seafront and sits alongside a 40-cover al-fresco terrace offering sea views Diners can select from a variety of specialty burgers, or create their own. The menu also features an all-day breakfast, ribs, freshly made salads and a beer-battered fish sandwich. The concept has been developed for the hotel by Simon Burdess, InterContinental Hotels Group’s Europe vice-president for food and beverage, and Wayne Horo, the company’s director of food and beverage concept development for Europe.

Village East launches London’s first in-restaurant advent calendar: Bermondsey-based restaurant and bar Village East, part of the Village London group, is launching London’s first in-restaurant advent calendar. The restaurant is handing out prizes every day from Tuesday (1 December) until Wednesday, 23 December including breakfast at Village East, dinner at The Riding House Cafe and tickets to the Design Museum with dinner for two at Blueprint Cafe. Guests can take part by filling out the form issued with the menu upon arrival, then wait for the daily December draw at 9pm. The winner will then be handed an envelope from the restaurant’s giant wall of advent containing the details of their prize. Full details of each day’s prize will be available on Village East’s Twitter and Instagram accounts.

McDonald’s launches Christmas menu: McDonald’s has launched its Christmas menu. Items include a “McMince pie and custard”, a Festive Feast with sweetcure bacon and cheese, which is an “100% British and Irish beef burger” containing sweetcure bacon rashers, black pepper cheese slices and red onion rings, topped with Batavia lettuce and a creamy black pepper mayo in a toasted bun. The Spicy Chicken Winter Melt is described as a “succulent chicken breast fillet in a crispy coating with a cheese slice”, made with Emmental and “spicy fire-roasted pepper sauce, slivered onions, cool mayo and Batavia lettuce in a toasted sesame seed topped bun”. The Christmas side order is Cheese Melt Dippers – four breaded cheese dippers, made with camembert and served with a festive tomato dip.

UGOT plans further expansion by starting to open large format sites: UGOT, the grab-and-go brand selling healthy food at railway stations and headed by 22-year-old entrepreneur Joe Carnall, is planning further expansion by starting to open large format outlets across the UK. The company, which specialises in cold press juices, frozen yoghurt and gluten-free offerings, has secured a site in the Central Arcade in Newcastle, which is set to open in January. Carnell plans to follow the Newcastle site with a new cafe in York next year. UGOT is investing £100,0000 opening the two-floor 55-cover venue in Grey Street, Newcastle, and has also applied for alcohol and entertainment licences. The site, which will create 12 jobs, will serve grab-and-go food during the day, as well as cocktails, gluten-free alcohol options and meals throughout the day and evening. Carnell told ChronicleLive: “I couldn’t be more excited to be in such a beautiful spot. The architecture of the arcade is breathtaking and I think it will entirely be reflected on the design of the place.” UGOT currently operates sites in Newcastle Central and York train stations.

Boujis keeps licence but ‘drinking in last chance saloon’:
Celebrity nightclub Boujis has been warned it is “drinking in the last chance saloon” after being allowed to keep its licence, despite a mass brawl between revellers outside. Boujis had been ordered to close for two weekends after the fight, which 16 police units attended. Kensington & Chelsea Council’s licensing committee ordered it to improve security and work closer with locals to tackle anti-social behaviour. Among the conditions were compulsory neighbourhood patrols by Boujis security until the club closed at 3am. Committee chairwoman Julie Mills warned the Kensington club that, while it had been allowed to retain its licence, it was “in the last chance saloon”. The licence review was prompted by several incidents of disorder connected with the club as well as the fight on October 25 involving at least 16 people.

Thai Restaurant Group opening new Thaikhun site in Nottingham today: Thai Restaurant Group will open its new Thaikhun site in Nottingham today (Thursday, 26 November). The company is opening the restaurant in the new food quarter at the Victoria Centre. Thaikhun group operations director Ian Leigh told the Nottingham Post: “We are incredibly excited to bring Thaikhun to Nottingham. Our passion is to share a real taste of Thailand’s ‘street food scene’ with the people of Nottingham by serving traditional Thai food and educating customers on the culture surrounding our cuisine.” Victoria Centre general manager Nigel Wheatley added: “We’re very much looking forward to Thaikhun opening in our Clocktower dining area as it will be completely new to the city.” Thaikhun literally translates as “your Thailand’” but is also a play on the word “tycoon” after its founder Kim Kaewkraikhot, who started the company by selling food on the streets of Bangkok.

Tasty brand believed to be behind restaurant with downstairs cinema planned for Manchester: Plans have been submitted to open a restaurant with downstairs cinema screen in Manchester. The proposal lodged with Manchester Council involves converting the former Nationwide bank in Piccadilly. The applicants are remaining tight-lipped over the company behind the venture, but the Manchester Evening News reports it is rumoured to be Tasty brand Wildwood Restaurants, which has a chain of sites across the south, including two featuring dine-in cinema screens. According to the proposal, the venue will serve oven-fired pizza, Mediterranean grills, salads, fresh pasta and more besides, all cooked using locally sourced ingredients. The main dining area and “show kitchen” will be at ground floor with the cinema in the basement. The firm behind the plans are said to still be in talks about acquiring the building and so unwilling to speak publicly about the venture. Nevertheless it is believed to be Wildwood – having already opened similar sites in Peterborough and Cambridge that feature sofas instead of traditional cinema seats and the option of hiring out the screening room for parties. According to the planning application, which is currently being considered by officers, the new venue would be aimed at a “well heeled” clientele and help breathe new life into a building that has stood vacant for some time following the recession.

Papa John’s wins top delivery chain for sixth consecutive year: Papa John’s has been named the 2015 National Pizza Delivery Chain for the sixth consecutive year by the Pizza, Pasta and Italian Food Association. The trade body’s 25th anniversary awards ceremony was held at the Lancaster London Hotel, Hyde Park. “We are delighted that the work of our franchisees and corporate team has been recognised as a leader in upholding excellent standards within the industry,” said Gareth Davies, regional vice-president, Papa John’s Western Europe. “It’s a testament to our commitment to ‘Better Ingredients. Better Pizza’ brand promise, and striving to use only the highest quality ingredients.” Papa John’s was founded in the USA in 1984, and has grown to include more than 300 stores across the UK, and approximately 4,800 stores in 40 international markets and territories.

Punch invests £450,000 in ‘traditional’ Tyneside pub: Punch has invested £450,000 in the Flying Scotsman pub at Forest Hill, Tyneside, operated by Chris and Kirsty Harris. Rebecca Davies, Punch’s new business development manager, said: “The Flying Scotsman has a special place in the local community and I’m delighted we’ve found a great couple like Chris and Kirsty to put it back at the heart of Forest Hall. At a time when so many pubs are focusing on the dining trade it is great to be involved with a traditional local where a good pint, great entertainment and a warm welcome are the cornerstone of the business.”

Morgan Stanley – here are our key questions for Mitchells & Butlers management: Morgan Stanley leisure analysts have framed a series of key questions for Mitchells & Butlers (M&B) management in the wake of this week’s results. They stated: “We maintain our forecasts despite a weak start to the year, incorporate the dividend resumption, and remain ‘Overweight’ on what remains a deep value call. The questions are: 1. What actions is the new chief executive taking to drive like-for-like sales? What can be done to drive like-for-like sales in terms of pricing, staff incentives and front of house capex? What is a reasonable medium-term expectation of like-for-like sales growth (we assume +1%)? Why have like-for-likes been so weak in the last few months? 2. What is the annual cost of the National Living Wage, and what is the company doing to mitigate it? Are there any cost savings it could pursue, for example in combining brands or reducing its central overhead? What is a reasonable medium-term expectation of Ebit margin change (we assume (20)bps per annum excluding the Orchid savings)? 3. Will the new chief executive issue any targets (e.g. like-for-like sales, margins, return on capital, earnings per share growth, estate size)? Does the company see the need for a full strategic review given the management changes and growing pressure on like-for-like sales and wage costs? 4. How big is the tail of pubs that are dragging down performance? If these are sold, is there the possibility a new tail will simply grow back? Does management see opportunities for M&B to improve operations at its tail end pubs? How is the heartland estate performing overall? 5. How much can capex be cut back, particularly on new pubs and expansion, and can central overhead also be reduced at the same time? 6. How many ‘gold brick’ disposal opportunities are there? (high value pubs or land in good locations that could be developed for alternative user and generating relatively little income as pubs) 7. Management indicated that it will convert more sites to premium brands, how quickly could this change take place and on what scale? 8. Would the company consider an acquisition, for example funded with disposal proceeds, perhaps to reposition its estate towards casual dining? 9. Would the company consider leasing its weaker sites to third-party operators whose superior brands might mean M&B could make more free cash flow through rental income than operating profit? 10. What can the company do to monetise its real estate? Is this net asset value real, up to date, and excluding a lotting premium? What would have to happen for the company to consider splitting into an opco and propco (note the internal propco now generates higher Ebitda than the opco)? 11. What is the actuarial pension deficit likely to be now, given gilts have moved lower since the last review? What action can the company take to protect itself from having to make higher payments to cover the deficit? Would a higher deficit have any impact on its ability to pay a dividend? 12. Would the company consider reprofiling its bonds to reduce annual amortisation charges, thus leaving more free cash flow over to pay the dividend? 13. What is the company’s view on industry consolidation, and does it see itself as an acquirer or a target?Morgan Stanley view: “M&B’s FY15 results were in-line with our forecasts, with the main positive surprise being the earlier than expected dividend resumption, though this was somewhat dampened by (and even at odds with) weak recent trading. The new chief executive clearly recognises the challenges the company and industry face, and his initial thoughts on what needs to be done seemed sensible: build a more balanced business (remixing brands to premium, maybe reducing the number of brands), instill a more commercial culture (focus on driving profitable sales, back to basics with management targets, maximising opportunities from under-utilised space), and increase the pace of execution and innovation. However, detail was light, there were no targets given, the company needs to do a turnaround when the market has become even more competitive, and big issues such as an estates review and long-term strategic questions remain unaddressed. Trading has recently taken a lurch down (November has been ‘acute’), and there is not much guidance on the likely impact of the National Living Wage, so holding our Ebit forecasts perhaps seems generous (the company says it is holding out for a strong Christmas). Meanwhile, there is plenty of support from the balance sheet, free cash flow, valuation, and industry consolidation. Hence, although we see few short-term catalysts, we see deep long-term value in the shares and remain ‘Overweight’ with an unchanged price target of 430p.”

Costa Coffee research reveals UK consumer Christmas shopping habits: New research by Costa Coffee has found 88% of Brits walk up to five miles during a typical Christmas shopping trip, whilst 90% of consumers spend up to five hours searching for the perfect gifts for loved ones. In response to the findings, Costa has created five novelty slippers to match its iconic festive cup characters – Santa Claus, the Penguin, the Snowman, the Elf and the Robin, with baristas gifting the footwear to customers who are all “shopped out” over the busy festive period. The specially designed slippers will be available across Costa’s busiest shopping centre stores, as well as on the Costa website via an online competition. Caroline Harris, marketing director UK retail at Costa, said: “We know Christmas is one of the busiest times for our customers, with so many focusing on finding the perfect gift for their loved ones that they forget to take a much-needed break. We hope that our Costa Christmas slippers will give our customers the chance to put their feet up and enjoy a little moment to themselves, during the Christmas shopping rush.” In the lead up to the busiest Christmas shopping week of the year, the research also revealed more than three quarters (77%) of Brits make up to five Christmas shopping trips each year, whilst 93% of people visit up to three towns or cities to complete their Christmas shopping. Nearly half of Brits (46%) said they like to enjoy a relaxing cup of tea or coffee at the end of a busy Christmas shopping trip, preferably in a cafe, whilst a fifth (20%) admitted that the thought of putting their feet up got them through the Christmas shopping rush.

Propel and Thinking Drinkers launch second Craft Beer Retail Study Tour: Propel is launching its second Craft Beer Retail Study Tour on Thursday, 28 January in London, this time focusing on south London. The tour, led by Thinking Drinkers, award-winning beer writers Ben McFarland and Tom Sandham, will visit seven of London’s leading craft beer retailers in an eight-hour tour. McFarland and Sandham will provide the latest craft beer facts and figures, market segmentation analysis, and spot up-and-coming trends. Site visits will include Q&A sessions with London’s leading retailers, looking at award-winning sites, a hybrid bottle shop and bar, beer-centric retail, mobile canning, beer sourcing, direct sourcing, menus, brewing on-site and a host of other issues. The day includes lunch and breakfast and travel between venues by coach. Tickets are £345 for Association of Licensed Multiple Retailers (ALMR) members and £395 for non-ALMR members. Email to book or to obtain further details.

ALMR National Restaurant Association Study Tour to Chicago opens for bookings:
The Propel and Association of Licensed Multiple Retailers (ALMR) 2016 Chicago Study Tour is now open for bookings. The trip, sponsored by CPL Training and Sky, takes place between Thursday, 19 May and Monday, 23 May 2016. The National Restaurant Association (NRA) draws 58,000-plus industry professionals from all 50 states and 100 countries, seeking the newest innovations and up-to-the-minute information about trends and issues. The ALMR trip provides: insights from industry experts on the rise in fast-casual dining, social media, new and emerging brands, menu development, staff management and a host of other issues – with 70 free education sessions at the NRA show. It also involves two tours of Chicago’s hottest concepts and a market overview briefing sessions from US experts. Paul Charity, managing director of Propel Info, said: “The NRA show combined with our tour of Chicago is a fantastic opportunity to find fresh inspiration and understand the emerging trends shaping the fast-changing US market.” To get more information or to book, email

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