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Morning Briefing for pub, restaurant and food wervice operators

Wed 7th Sep 2016 - Paul UK returns to profit, Hand Picked Hotels reduces losses
Paul UK returns to profit, like-for-likes increase 6.3%: Paul UK, the 34-strong French bakery and cafe brand, has reported a return to profit for the year ending 31 December 2015 with like-for-like sales up 6.3%. The company saw a pre-tax profit of £313,482, compared with a loss of £31,601 the previous year, according to accounts filed with Companies House. Turnover increased 17% to £28,736,357, compared with £24,631,645 the year before. The company stated: “The changes made by the company to improve the processes and procedures in the business since 2013 continue to deliver a better trading result for the company. This continued improvement in turn supports the development and growth of the company. Whilst the controls and processes took time to implement, these initiatives have now bedded in across the business however, they are continually being reviewed and as appropriate updated to address changes in customers’ expectations of the company and employees’ needs. For the year ended 31 December 2015, total revenue increased to £28.7m (2014: £24.6m) representing a £4.1m increase on 2014 or 17% growth. Like-for-like growth in the same period increased by 6.3%. Ebitda after head office costs and before pre-opening and exceptional costs and international management fees were 2.71 percentage points above the previous year (an improvement of 49% on 2014). The year under review was another exceptional year confirming that the company’s focus on traditional methods of baking, sourcing quality ingredients and not using preservatives or additives within its bread is recognised more and more by the customers. The improvements in store as well as at the central bakery during the year resulted in an increase in productivity by 5.1% on 2014. In November 2015, the company adopted the £7.20 National Living Wage five months ahead of the April 2016 deadline. The company continued its programme of closing stores that did not fit with the brand’s key objectives. The stated figures take into account the closure during the year under review of the company’s store in Old Compton Street. During the year under review the company did not renew its lease of the Paul in Fulham Road. Neither of these units fulfilled the Paul criteria for the local market and both prevented the business from providing its customer with the true Paul experience. In line with the five-year business plan agreed during 2014, the company continued to develop and open further stores during the year. Having opened its first store outside London in Oxford at the end of 2014 the company opened a further five new shops during 2015, three within London and a further two outside A Paul bakery cafe in Newbury was opened in March. Following this three stores were opened in central London: Three Quays (adjacent to the Tower of London) opened in June 2015, Marble Arch House in Edgware Road opened in July 2015. The biggest opening of the year was the Paul Restaurant in Tower 42 in Old Broad Street, which opened in August 2015. The business made the decision to appoint a new French designer to work with the company to bring a new look to the interior. The design is a significant step change for Paul and moves the look on from the traditional rustic image of Paul whilst retaining the key elements of the counter display and visibility into the bakery. The Paul restaurant offers an all-day dining experience from a menu especially developed for the unit focusing on traditional French cuisine with a particular emphasis on the quality, provenance and freshness of the raw ingredients going into making these characteristically French dishes. A carefully selected range of wines enhance these dishes which are available in the restaurant and from the bar – a first for Paul. The bar offers a Parisian feel environment in which customers can sit and relax through the day and on into the evening. The company opened a Paul bakery cafe in the new Grand Central development, Birmingham in October 2015. Customer awareness and knowledge of Paul in Birmingham is increasing week on week and gives the company confidence it can continue to expand and grow both in London and outside. Following the success of the refits undertaken during 2014, the company undertook a full review of its stores during 2015 to understand what improvements should be made to the existing portfolio of stores to enhance the customer’s ‘Paul’ experience and where possible the environment in which the staff work and interact with the customer and maximise the opportunities and entice customers into the shops. Significant time was spent on establishing ideal layout modules and understanding the key drivers for success of each store. Following on from this work a programme of refits was put in place. The timings of refits is carefully analysed to ensure it does not adversely disrupt trade at peak periods. Bow Lane was the first store to benefit from a refit – this was completed at the beginning of September. As a result of the positive impact of the refit, the programme has been intensified for 2016. The refit plan remains a three to five-year programme. The development of new products and ranges continues and during the year significant work was done which will see new products becoming available to the customers during 2016. This development supported by the central bakery continues to ensure Paul is a market leader in French bakery and patisserie.”

Losses reduce at Hand Picked Hotels: Upmarket country hotel operator Hand Picked Hotels, owned by Julia and Guy Hands, has reported pre-tax losses reduced marginally to £3.5m in the year to 26 November 2015, compared to £3.6m the year before. Turnover increased 3.7% to £62.4m. Ebitda before fixed asset impairment increased to £9.6m compared to £9.5m in the previous year. The company has 17 sites and operates four under management contracts – bedroom stock is 1,357 bedrooms. The company stated: “The group is well-positioned for growth as the market recovers, driven by investment that will delver increases in sales an Ebitda. The ongoing improvement n brand perception together with the continued drive towards excellent in service provision will also contribute to future growth. On 8 February, the group disposed of Priest House Hotel to a third party for £3,050,000.” The company owes £11,197,548 to Guy Hands and £14,005,000 to Julia Hands. 

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