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Thu 25th May 2017 - Young’s and Conviviality results, Zizzi launches click-and-collect ordering
Young’s reports 4.7% increase in managed like-for-likes since year-end: London pub retailer Young’s has reported a 4.7% increase in like-for-likes and sales up 6.1% in total in its managed estate in the first seven weeks since the year-end. For the year ending 3 April 2017 managed like-for-likes increased 4.7% with revenue up 7.0% and operating profit increasing 9.8% to £58.4m. Total company sales rose 9.4% to £268.9m and adjusted operating profit was up 11.9% to £46.1m. Profit before tax was up 12.8% to £37m. There was record cash generation, with operating cash flow up 5.1% to £63.5m and year-end net debt representing a conservative 1.9 multiple of Ebitda. The Ram Pub Company (its tenanted business) saw revenues up 7.1% and up 3.2% like-for-like while operating profit was up 11.1%. There was total investment of £38.2m, in acquisitions, transformational developments and estate upgrades. Chief executive Patrick Dardis said: “I am delighted with these results. Yet again we have outperformed the sector, and made progress on all key measures, with revenue, profit, margin, cash generation, investment, the value of our pub estate and shareholder returns all strongly ahead. This is the reward for our consistent strategy of running high quality, differentiated, individual and well invested pubs, at the heart of the communities in which they sit, staffed by well-trained and motivated teams of people. The pub is now the most popular destination for eating out in the evening, and recent trading has been strong, with our ranges of craft beer, our ‘Cocktail Collective’, and our brunch and Sunday lunch offerings all helping drive performance. The good weather at the start of the year and the increase in ‘staycations’ during the Easter holidays ensured our pubs were busy, particularly those on the river and with large gardens. The broader economic and political environment remains uncertain and our sector faces unwelcome cost pressures on a number of fronts. In response, we are working hard to ensure we are best placed for whatever is around the corner. We have a reliable track record, a very clear strategy, a great team of people, and the financial muscle to continue to grow. We will continue to surprise and delight our customers, and to grow our estate through carefully selected acquisitions and developments, all in pursuit of delivering superior returns for our shareholders.” The company stated: “The estate now stands at 252 pubs – we acquired four pubs during the period, sold one and two leases expired. Its value has increased again, now to £689.1m (2016: £649.8 million), and this firm foundation allows us to look for further opportunities to expand, whether that be on an individual pub purchase basis or groups. Our two managed house brands, Young’s and Geronimo, have both delivered strong performances. Total managed sales were up 7.0% on a 52-week basis. This year, Young’s managed houses delivered like-for-like sales growth of 5.0% and we are confident we can continue to outperform the sector with more opportunities to drive further growth. The turnaround in our Geronimo performance has been equally pleasing. From a decline of 1.0% in sales on a like-for-like basis last year, the business has bounced back to deliver 3.8% like-for-like sales growth this year. This achievement has been realised by focusing on the individuality of each pub, restoring the menu to the Best of British and re-energising the service teams. Food sales were up 7.4% in total and up 4.9% on a like-for-like basis. The standout success story within our food offering has been our Ultimate Sunday Lunch – our customers are welcome to grab a comfy corner, read the papers, play a board game and enjoy a roast with all the trimmings. Even our Mayfair institution, the Guinea Grill, which has been serving ales since 1423, is opening on Sundays again to meet this growing demand. Having increased the roll-out of our innovative and successful Burger Shack concept, including its little sister, ‘Shack-in-a-Box’, which can pop-up to maximise sunny days in smaller gardens, we now have 25 ‘shacks’, an increase of 13 over the year. This year we have invested £35.7m, spread over acquisitions, transformational developments and day-to-day maintenance to preserve the quality to which our customers have grown accustomed. We acquired three freehold properties and opened one leasehold during the year, spending £12.0m in the process. The Blue Boar at the gateway to the Cotswolds in Chipping Norton reopened after a major refurbishment in October. The Woolpack (Bermondsey) transferred from the Ram Pub Company in October, having spent six months trading under the previous tenant following its purchase at the start of the financial year. The Riverstation, anchored on Bristol’s beautiful and historic harbourside, landed in November. Finally, the Station Tavern (Cambridge) signalled our broadening appetite for destination market towns. Within the existing estate, we invested £23.7m (2016: £25.6m) on refurbishing the Brook Green (Hammersmith), Bear (Oxshott), Coach and Horses (Barnes), County Arms (Wandsworth), Devonshire (Balham), Eagle (Shepherd’s Bush), Fentiman Arms (Vauxhall), Fox and Anchor (Smithfield Market), Greyhound (Carshalton), Hammersmith Ram, Hand and Spear (Weybridge), Hare and Hounds (Sheen), Old Brewery (Greenwich), Trinity Arms (Brixton) and the Victoria (Surbiton). The White Bear (Kennington) was this year’s largest investment and is a stunning example of traditional pub meets modern design, with an eclectic collection of artwork and bric-a-brac overlooking the original wooden bar. On the total internal investments we made in the prior year we have delivered a 25.0% return on capital in the current year.”
Conviviality reports sales nearly double to £1,560m: Conviviality, the UK alcohol wholesaler serving consumers through the on-trade and through its franchise retail estate, has reported sales nearly doubled to £1,560m for the year ending 30 April 2017. Net debt was £99m, comfortably below Conviviality’s net debt target of 2.0 times net debt/Ebitda. The company stated: “During the past financial year the transformation of Conviviality from its foundations as a franchised off licence business into the UK’s leading drinks wholesaler and distributor has been further underpinned with the acquisition of Bibendum PLB Group on the 20 May 2016. The integration of both Matthew Clark and Bibendum PLB Group is progressing well and the plan to deliver the stated synergies remains on track. Conviviality has strengthened its management team and reorganised its activities into three business units – Conviviality Direct, Conviviality Retail and Conviviality Trading, enabling each to focus on serving its customers and suppliers. Underlying sales for each business unit have been strong throughout the year with good organic growth compared with the corresponding prior period. Conviviality Direct sales of £1.04bn were up 6.4% on the corresponding prior period. Growth has been driven by both a 1.6% increase in outlets and an increase in sales per outlet of 4.8%; a strong indication of customers switching to a ‘one stop shop’ model as they benefit from the combined range and expertise of Matthew Clark and Bibendum. Conviviality Retail sales of £374m were up 6.1%. Like-for-like sales (excluding tobacco) in the second half of the year (26 weeks to 30 April 2017) improved to +1.5% (second half 2016: -2.3%). Conviviality Trading sales of £146m were up 1.0% on the corresponding prior period. Growth reflects the agency business benefitting from the wider reach the group has to offer, coupled with new customers recognising the differentiation they can access from Conviviality’s events and experiential marketing business.” Chief executive Diana Hunter said: “We have come to the end of an unprecedented year of change and I am pleased to report a strong trading performance for the group and for each of its business units. It is encouraging to see our customers and suppliers benefiting from the skills and the expertise of the enlarged group, its scale and reach and its positioning as the UK’s leading drinks wholesaler and distributor. We have made great progress on the integration of Matthew Clark and the acquisition and integration of Bibendum PLB Group. Our focus will continue to be on improving the business and ensuring that benefits are realised from our greater scale, as we drive efficiencies for the group and greater service for our customers. I would like to thank our passionate and talented team, as well as our suppliers, our customers and our Franchisees, for their loyal support through what continues to be an exciting journey for Conviviality.”
Zizzi launches click-and-collect ordering: Azzurri Group-owned Zizzi has partnered with online ordering platform Orderswift to launch click-and-collect ordering across its 145-site estate. The move comes six months after Orderswift launched the service across Azzurri’s other nationwide chain, ASK Italian. The collaboration gives Zizzi customers the ability to place collection orders on a branded, two-step interface, which can be accessed on any desktop or mobile device, in less than 30 seconds. Azzurri Group head of IT Doug Wooten said: ”Orderswift has an impressive product, with a great team behind it. Having enjoyed our partnership in taking ASK Italian’s collection orders online – and seeing the results of that – we had no hesitation in partnering with Orderswift again to launch click-and-collect at Zizzi.” Orderswift co-founder Matt Gilbert added: “The management team at Zizzi see the huge revenue opportunity that click-and-collect holds for casual dining businesses and we’re very excited to be helping them realise that. We’re also humbled that Azzurri Group has selected Orderswift as a partner for its two biggest brands.”

Electra – ‘TGI Friday’s performing in line with expectations’: Electra Partners, the private equity backer of TGI Friday’s, has reported the restaurant company is continuing to perform in line with expectations. The company stated: “Year-on-year earnings growth has accelerated to 10% in the past 12 month period as a result of improved like-for-like sales performance as well as the new store opening programme. The valuation of Electra’s investment has increased by £30m or 33% since September 2016 as a result primarily of earnings growth and cash flow. The total return on this investment now stands at 1.2 times original cost, a 10% internal rate of return.”
Fever-Tree co-founder sells 4.5m shares: Fever-Tree co-founder Charles Rolls has sold 4.5m shares in the premium tonic maker, representing about 3.9% of the company. Rolls, who relinquished his executive role in the business, stepping back to non-executive deputy chairman, sold the shares via an accelerated bookbuild placing. Rolls is taking advantage of a remarkable increase in the share price since Fever-Tree floated at 134p in November 2014 after consistently beating market forecasts. It delivered its eighth profit upgrade in a row last week, predicting its full-year results would be comfortably ahead of market expectations. The shares rose 26p to £17.48 yesterday (Wednesday, 24 March). At that level, the stock is trading on a multiple of just over 60 times forecast full-year earnings. In a research note last week, Berenberg said: “While the multiple is high, we think it is justified by the company’s outstanding growth and strong cash generation.” After the sale, Rolls, who previously ran Plymouth Gin, is left with 12,927,505 shares, a 11.2% stake. He has agreed to a six-month lock-in on those shares. The group, whose market value has soared from £154m to just short of £2bn, has ridden the craft gin revolution to become the world’s biggest premium tonic maker, with distribution in more than 50 countries. Rolls and Tim Warrillow, his co-founder and chief executive, cashed in £25m of shares at flotation. In March last year, they sold another £17.7m worth, with Rolls collecting £12.3m.
Elegant Hotels appoints Luke Johnson as non-executive director: Elegant Hotels Group, the owner and operator of six upscale freehold hotels and a beachfront restaurant on the island of Barbados, has appointed Luke Johnson as a non-executive director with immediate effect. Johnson is the chairman of private equity house Risk Capital Partners and his extensive range of other public and private company roles include the chairmanships of Patisserie Holdings, The Brighton Pier Group, Arden Partners, Bread, Neilson Active Holidays, The Draft House and Small Batch Coffee. Previous chairmanships have included Channel 4, PizzaExpress, and Giraffe Restaurants. Johnson holds 11,100,000 ordinary shares, representing approximately 12.5% of the company. Elegant Hotels chairman Simon Sherwood said: “We are delighted to be welcoming someone of Luke’s calibre and experience to the board of Elegant Hotels. His wealth of leisure industry knowledge and his outstanding track record of helping companies to achieve their ambitious growth plans will be hugely additive to the group as it continues to carry out its expansion programme in Barbados and the wider Caribbean. We see significant potential for continuing to enhance the food and beverage offering within our portfolio, and Luke’s expertise in that sector will therefore be particularly valuable.”
Greene King raises £3m for Macmillan Cancer Support: Brewer and retailer Greene King Greene King has raised £3m for its charity partner, Macmillan Cancer Support. The figure comes five years into the partnership and follows a successful “Macmillan May” – Greene King’s month-long fund-raising event. It saw about 1,000 pubs across the country take on the challenge to raise as much money as possible for the charity with a variety of events. Greene King was recognised for its support of the cancer charity by receiving an award for fund-raising excellence at Macmillan’s annual corporate partnership event this month. Greene King’s support for Macmillan doesn’t end with £3m, as it takes on its “Miles for Macmillan” campaign, in which the company’s 43,000 team members and its guests are invited to walk, run, bike or swim enough miles to reach the moon. Guests at Greene King pubs have also supported the cause by enjoying its charity desserts, raising £330,000 for Macmillan since the partnership began in 2012. Greene King chief executive Rooney Anand said: “Our pubs are in the privileged position of being in the heart of communities and this achievement is all down to our amazing team members and customers who have put on fantastic fund-raising events over the past five years.” Macmillan Cancer Support chief executive Lynda Thomas added: “At Macmillan we know by 2030 the number of people living with cancer in Britain will have increased to four million, making Greene King’s support more valuable than ever.” Macmillan helps to fund or support more than 4,300 Macmillan nursing posts across the UK, helping hundreds of thousands of people with cancer each year.

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