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Morning Briefing for pub, restaurant and food wervice operators

Tue 10th Oct 2017 - Update: Best UK bar and nightclubs, Marston’s, Domino’s UK and Whitbread
ALMR names best UK late-night operators: The Association of Licensed Multiple Retailers (ALMR) has announced the winners of the 2017 Late Night Awards, from a record number of entries – more than 300 nominations were received this year. The winners were announced at a gala ceremony at Café de Paris, London, last night with the ALMR recognising the best of the dynamic and exciting late-night sector across six categories. Best Late Night Food: Living Ventures; Best Late Night Drink: New World Trading Company; Best Late Night Entertainment: Maxwells; Best Marketing and Promotions: Dirty Martini; Best Service and Team Development: Beds and Bars; Best New Venue: Impossible, Manchester Tokyo Industries. The Icon award recognising outstanding contribution to the sector was given to Revolution Bars Group founder Roy Ellis. ALMR chief executive Kate Nicholls said: “Congratulations to all this year’s winners. Every one of them has proven themselves to be innovative and eye-catching in an incredibly competitive sector. The UK’s late-night eating and drinking market is one of the country’s best assets, home to some of the most exciting entrepreneurs. The range of businesses honoured at the Late Night Awards shows the fantastic strength and variety or businesses connected to the night-time economy.”

Marston’s issues end-of-year trading update: Marston’s has issued an update on trading for the year ended 30 September 2017. It stated: “We made further progress in implementing our strategy, achieving growth in revenue and earnings led by the performance of wet-led pubs and brewing. In Destination and Premium, like-for-like sales were 0.9% above last year. The more subdued summer trading and relatively stronger performance of wet sales compared to food sales was consistent with the market. A disciplined approach to pricing and promotions and good cost control contributed to the operating margin in Destination and Premium being only slightly below last year despite the continued cost pressures. In Taverns, like-for-like sales were 1.6% above last year. These wet-led community pubs continue to benefit from greater consumer interest in local beers and craft drinks and the continuing development of our offers, together with the continued strong performance of pubs operated under franchise-style agreements. In Leased, like-for-like profits are estimated to be up 1% compared to last year reflecting the high quality of our Leased estate, together with licensee stability. In Brewing, we have had a transformational year including the successful acquisition of the Charles Wells Brewing and Beer (“CWBB”) business in June, and growth in distribution through entering into long term agreements including Punch B and Hawthorn Leisure. The integration of CWBB is on track, and performance is in line with our expectations. Own-brewed volumes increased 6% demonstrating the strength of our brand portfolio and the acquisition of CWBB, and contributed to market share growth in the on trade and the off trade. We completed 19 new pubs and bars and eight lodges. Openings were weighted towards the end of the financial year, and four pubs planned for September will open in late October. In the 2018 financial year we now expect to open 15 pubs and bars, and six lodges. This modest trimming of our openings programme reflects a degree of caution given recent subdued market conditions, but our investment criteria are unchanged. Our new pubs continue to open strongly and the performance of those opened in recent years remains good and in line with targets. We remain confident that investment in new pubs and bars creates shareholder value, and is an important component of our strategy to achieve organic growth. We have a good pipeline of sites beyond 2018.Sales and profits for the year are ahead of last year, and we target further growth in 2018. There is no significant change to the cost trends highlighted previously, but we have identified cost savings of approximately £5m per annum including the recently announced reorganisation of the pub operational structure, demonstrating that we are alert to opportunities to mitigate ongoing cost increases.” Ralph Findlay, chief executive, said: “Our priority is to focus on quality, service and standards. We are well placed to continue to implement our growth strategy through investment in higher quality pubs and bars and through our unrivalled beer brand range supported by high customer service standards.”

Domino’s reports 8.1% like-for-like sales growth in Quarter Three: Domino’s UK has reported like-for-like sales rose 8.1% in the 13 weeks to 24 September. Group system sales were up 20.8% with UK system sales up 11.6%. There was an acceleration in digital sales with UK online sales up 17.4%. It now has 1,149 stores group-wide – 19 new stores opened in the period, including the 1,000th UK store. David Wild, chief executive, said: “We are pleased with our performance in Q3, especially the improved trend in our core market of the UK. Additionally we are making progress in all our overseas operations. In Ireland and Switzerland, our online initiatives are fuelling accelerated growth, and in Norway the first Dolly Dimple’s conversions are trading very well. In the UK, consumers are uncertain and they continue to focus on value. Our commitment to growth remains undiminished, as does that of our franchisee partners. We expect to launch a record 90 stores in the UK this year, with an encouraging pipeline already in place for openings in early 2018. More recently, we have seen a real surge in digital engagement, with our new advertising campaign, “The Official Food of Everything”, driving a record 200,000 online orders – or 140 a minute – on the last Saturday in September. The board reaffirms that its forecasts for full year underlying profit before tax remain at least in line with market expectations.” The company added: “Progress in Quarter Three has been encouraging and we look forward to realising the effects of our recently-launched campaign. Despite the continued uncertainty affecting the UK, we are investing in growth and the customer proposition for the long term. We now expect full year capex to be at the lower end of the £50-60m range, and we anticipate full year underlying profit before tax at least in line with current market expectations.”

Whitbread buys out Costa JV partner: Whitbread has announced that Costa has acquired 49% of its South China Joint Venture from its joint venture partner, Yueda, for RMB 310 million (£35 million). The company stated: “This acquisition provides full ownership in this important growth market and is in line with Whitbread’s strategy to focus on key international opportunities. Costa currently owns 51% of the joint venture which operates 252 stores in the south of China, including 93 stores in Shanghai.” Alison Brittain, chief executive of Whitbread, said: “One of our three key strategic priorities is to focus on our strengths to grow internationally and today’s announcement marks a significant and exciting step in our ambitious growth plans for China. We have enjoyed an excellent partnership with Yueda over the past ten years together beginning to build the Costa brand in this key market. The coffee shop market in China is highly attractive, with a compelling opportunity for Costa to grow its presence over the longer term. This acquisition gives us full strategic and funding flexibility to unlock Costa’s potential in China, providing a strong platform to facilitate future growth, enhance the customer experience and make Costa the coffee shop of choice in this fast-growing market. We remain fully committed to our strong partnership with BHG in Northern China and look forward to building our business with them in the years ahead.” The South China business will continue to be consolidated in Costa and Whitbread financial accounts. The purchase is subject to final government registration formalities, with the aim to complete the transaction as soon as practicable. The existing Joint Venture in the north of China, which is a 50/50 JV with BHG is unaffected by this transaction.

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