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Fri 27th Nov 2015 - London Union reduces valuation to £26m
London Union reduces valuation to £26m as it aims to reach £3.5m fund-raising target through private investment: London Union, the street food market company led by Henry Dimbleby and Jonathan Downey, has reduced its business valuation to £26m. The company is now offering 11.86% equity as it looks to raise £3.5m on crowdfunding platform Seedrs. It was previously offering 10.01% thus valuing the company at £35m. So far it has raised £1,170,000 with one day remaining and expects to reach its £3.5m target privately with investors. It stated: “We plan to raise the remaining money (to reach our ‘super target’) from discussions we are having privately with a number of individuals who want to invest much larger amounts. As part of the negotiations to agree these significant new investments (of £1m+) we have agreed to a reduced valuation of the business of £26m (pre-money) as these larger investors will not benefit from EIS relief or the bar tab ‘dividend’. Clearly, when we close the round on Saturday, all Seedrs investors at that time will come in at the same reduced price. Good news.” Earlier this week the company reported it has received head of terms on a 10,000 square foot site in Philadelphia and has a strong pipeline of new sites in the UK. By 2019 it plans to have 12 local sites open as well as the flagship market in central London.

Bill’s promotes Roberto Moretti to chief operating officer: Bill’s Restaurants has promoted joint managing director Roberto Moretti to chief operating officer. The company has made the appointment as it continues its expansion in the UK, opening its 70th site in Bishop’s Stortford, Hertfordshire, on Monday (30 November) with a second site in Manchester opening the same day in the Trafford Centre. Bill’s is also opening its 72nd site in the Birmingham Bullring on Monday, 7 December. Moretti, who has been with the company for over three years, said: “The business has grown exponentially in recent years and we’re thrilled to have reached our 70th site milestone. I’m proud to be heading up the Bill’s family and future growth whilst staying true to our values and amazing culture.” Bill’s currently employs 2,880 staff, which is due to rise to nearly 3,000 with the three upcoming openings.

Flat Iron to open third restaurant next Thursday in Covent Garden with on-site butchery:
Flat Iron, the London-based single steak concept founded by Charlie Carroll, will, open its third site next Thursday (3 December). The company will launch the 180-cover restaurant in Henrietta Street, Covent Garden. The two-storey 4,435 square foot venue is its largest to date and features a display cellar and bar as well as a gelato bar and glass-fronted butchery so guests can watch butcher in residence Jordan Ling at work. The restaurant’s design by AvroKO also integrates the features of the original building, constructed in 1891. Flat Iron Covent Garden, which will serve an extended range of cuts, will also be the home of one of London’s few real northern beers, “Yorkshire Beer”, developed in collaboration with craft brewery Copper Dragon. The beer will be on display in the restaurant inside 14 glass-fronted oak barrels. Carroll said: “The Henrietta Street space is by far the largest we have worked with and has allowed us to consider features that we’ve always wanted but never had room for. AvroKO has blown us away with their vision, blurring the lines between front and back-of-house, with beer cellar, butchery and ice cream churning all part of the restaurant the guest experiences.” Flat Iron, which was originally launched as a pop-up in the upstairs area of the Owl and Pussycat pub in Shoreditch in 2012, currently has sites in Beak Street and Denmark Street.

New £2m a la carte Indian restaurant concept Ba Shoh opening in Peterborough tomorrow: A new £2m a la carte Indian restaurant concept will open in Peterborough city centre tomorrow (Saturday, 28 November). Ba Shoh, which will feature “imaginative cuisine accompanied with wine and cocktails influenced by the legacy of the British Raj”, is launching in the former Imperial Bento restaurant in Broadway. In Punjabi, bashoh means king. The 200-seat venue is the brainchild of Amir Mahmood, from London, who was in the food business overseas for many years and has decided to make a comeback in Peterborough. He told the Peterborough Telegraph: “We studied the market and saw a need for this type of restaurant in the city. It will be different to other Indian restaurants as the menus will be inspired by older dishes served for the British Raj.” Mahmood is also planning to use the former Bar Fever conservatory attached to the building as a shisha bar.

Geof Collyer – I’m expecting the turnaround at M&B to be protracted:
Deutsche Bank leisure analyst Geof Collyer has argued the turnaround at Mitchells & Butlers (M&B) is likely to be protracted. He said: “In his first outing, Phil Urban, M&B’s new chief executive, has been forthright about the issues facing the group in terms of increased competition, lack of commercial edge, failure to innovate fast enough and the balance of the portfolio. In the group’s defence, M&B still owns some of the best sites and brands as well as having a sound infrastructure that is a genuine asset in terms of the group’s overall scale. We believe that the M&B supertanker has finally turned the corner but estimate that progress to full steam ahead is 18-24 months away. With few nearer term catalysts, we retain our ‘Hold’ stance. In the last eight weeks (October and November), like-for-likes were -1.6%, which is disappointing given recent industry commentary regarding better managed pub trading in October due to half term and the Rugby World Cup. For the chartists amongst you, the M&B share price has fallen 25% since the UK Chancellor’s mid-July National Living Wage announcement, compared to a 7% fall for the FTSE over the same period. With consensus forecasts now adjusting for the increasing wage pressure, plus a new chief executive and the reinstatement of the dividend (which should get M&B onto a few more radar screens), we suspect that the new broom and the recent share price fall could provide something of a floor for the stock. However, we see the threat from competitive pressure apparently targeting some of the group’s key brands stalling overall progress in the near term (Harvester and Toby Carvery seem to have been singled out by the peer group). In addition, with the dividend reinstated, we see M&B possibly cash constrained as to how quickly it can move to reposition parts of the estate. There remains a lot for the new chief executive to accomplish. Valuation: price target moved from 500p to 430p We have now adjusted our forecasts for National Living Wage, changes in site roll-out and other associated costs as well as FY15 results. We see the cumulative net impact of these changes taking -70 bps off our Ebita margin by FY18E. We value M&B on an FY16E EV/Ebita multiple; we have reduced our target multiple from 13x to 12x, reflecting the protracted turnaround we now expect.”
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