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Fri 1st Dec 2017 - Propel Friday News Briefing

Story of the Day:

Giraffe paid £9.9m for 30 Ed’s Easy Diner sites, new accounts reveal: Giraffe Concepts paid £9.9m to acquire 30 Ed’s Easy Diner sites in a pre-pack administration agreement, newly filed accounts have revealed. Giraffe reported turnover fell to £51,065,906 for the year ending 1 January 2017, compared with £56,718,292 the previous year. The figure included turnover of £7,226,373 from the Ed’s Easy Diner sites between 12 October 2016, when they were bought by Giraffe, and the period end. Giraffe said the decrease was down to a shortened trading period to bring the financial year in line with that of Boparan Restaurants, which bought the business from Tesco in June 2016, that was partially offset by the Ed’s Easy Diner revenue. Pre-tax losses decreased to £3,812,381 compared with £9,117,416 the previous year, according to accounts filed at Companies House. During the period the business incurred exceptional costs from the sale and acquisition processes along with 13 site disposals, the majority of which were converted to a cafe format and retained by Tesco prior to the business sale. Site asset impairments of £3.2m (2016: £6.8m) were recorded following management’s review of the five-year forecasts. Gross margin improved to 77.6% compared with 77.1% the previous year. The company stated: “The property development programme has focused on reinforcing brand identity through a series of site refurbishments in the second half of the year that have continued into 2017. The business opened two new sites in 2016 where the leases were committed back in 2015 and further new site opportunities have been pursued. The balance sheet as at the end of the period shows net assets of £5.8m (2016: net liability £2.0m). The increase in the net assets is primarily as a result of the recapitalisation of the business through the issue of one ordinary share for consideration of £13m. These funds were used to repay intercompany balances with Tesco Group and the overdraft. The balance sheet includes fixed assets of £17.2m (2016: £14.9m). The increase in assets is driven by the acquisition of sites trading as Ed’s Easy Diner net of the impairment. Net current liabilities at the balance sheet date are £12.7m (2016: £14.8m). The business funded the acquisition of the Ed’s Easy Diners business with the funds received from a related party. The related party loan is recorded as a current liability. The existing business and future growth are funded from the continued financial support of the parent company. The parent company has committed to provide sufficient liquidity and capital expenditure where needed.”

Industry News:

New speakers announced for Restaurant Marketer & Innovator, three tickets for two offer launched: New speakers have been announced for Restaurant Marketer & Innovator, the most comprehensive marketing conference the sector has seen. Propel will stage the two-day event in partnership with Think Hospitality on Wednesday, 17 January and Thursday, 18 January at One Moorgate Place in London. An array of marketers from agencies and early-stage, growing and rejuvenating brands will take to the stage to share their strategies and winning tactics to give attendees clear takeaways to build their own brand and marketing going into 2018. Speakers will include Jamie Campbell, business unit director at CGA, who will set the scene regarding the latest industry consumer and market place insights while sharing emerging eating and drinking out trends. Maurice Abboudi, sector investor and executive director of K10, will be part of the Restaurant of the Future panel, bringing his experience of developing new brands and operating successful restaurants. For full details, click here. Prices for two days are £525 plus VAT for operators and £795 plus VAT for suppliers. Companies buying two tickets will receive a third one free. A one-day rate of £345 plus VAT is available to operators only. For more information and to book, call Jo Charity on 01444 810304 or email or Anne Steele on 01444 817691 or

More British families opt to dine out on Christmas Day, 43% rise in 2016: British families are increasingly looking to eat their Christmas dinner out of home with a 43% year-on-year rise in bookings on 25 December 2016, according to restaurant booking platform OpenTable. Families are favouring family time over festive chores and moving their feasts to pubs and restaurants on Christmas Day. Although the classic turkey and trimmings is the most popular choice for time-poor diners, Italian, Indian and French cuisine were other top choices for festive bookings, the company stated. Adrian Valeriano, OpenTable vice-president for EMEA, said: “Increasingly we are seeing the ‘turkey carvers’ handing over the Christmas reins and dining out with friends and family on Christmas Day. Precious time relaxing and enjoying professionally prepared food takes away any pressures that come with creating a home-cooked meal. Plus, if we want to forgo the traditional Christmas Dinner for a curry or pasta, we can. With a wealth of great restaurants offering a variety of cuisines, diners are now taking full advantage of the options available.”

Time Out launches conversational app: Media company Time Out has launched a conversational app on Google Assistant that allows people to discover the best things to do in London. Talk To Time Out features content about events, restaurants, bars, film, art, music and theatre. Users who say “talk to Time Out” on Google Assistant will set off a two-way conversation with questions such as “what’s a great restaurant to go to tonight?” and “surprise me”. The app is available on eligible Android and Apple smartphones, and voice-activated speakers such as Google Home. Time Out director of product development Sanjay Vakil said: “As more people use conversational platforms, it is a natural step for us to explore the powerful channel of conversational UI and optimise our content for voice. We are proud of what we have developed in close collaboration with Google. This joint project demonstrates we are serious about being at the forefront of new technologies that make it fun and easy to experience the best of the city.” Alice Zimmermann, global product partnerships at Google, added: “We’re at the beginning of a massive shift towards conversational interfaces. Time Out has an extraordinary wealth of local content tailored for different audiences. It is a great fit for our platform.”

Seedrs reports more than £300m invested since launch: Seedrs has reported more than £300m has been invested on its crowdfunding platform since launching in 2012, with 560 deals funded in that time. The company said 12 businesses had hit their investment targets during November, including stock-trading app BUX (€1.4m from 2,000 investors), peer-to-peer lending platform CrowdProperty (£830,000 from 430 investors), and YellowDog, which harnesses under-used computer power (£600,000 from 350 investors). Seedrs also won three awards during November – alternative finance provider of the year in the British Small Business Awards; best crowdfunding platform as voted by readers of Shares Magazine; and industry game changer in the Growth Investor Awards. The company was also named in Deloitte’s Technology Fast 50 list. During its most recent funding round in October, Seedrs raised almost £7m in fewer than five days. In the same month, its first set of full accounts filed with Companies House revealed the company lost £3.8m on revenues of £1m last year.

Government support of skilled work must include eating and drinking out businesses, says ALMR: The Association of Licensed Multiple Retailers (ALMR) has said government support of skilled work must include eating and drinking out businesses due to the sector’s reliance on skilled staff, especially chefs. Coinciding with the government’s first Skills Summit, ALMR chief executive Kate Nicholls said that while the government’s move to identify and promote skills within the UK workforce was welcome, the issue was particularly important with the approach of Brexit as businesses began to assess what the UK’s workforce might look like. She said: “Eating and drinking out businesses employ skilled staff in a variety of roles, especially chefs. The sector has evolved enormously over recent years, with a greater emphasis than ever on food. Food-led businesses have helped revitalise high streets over recent years and this renaissance must not be allowed to falter. Industry stats show the hospitality sector needs to employ 200,000 people just to keep pace and projected growth of 5.5% by 2020 will require an additional 23,000 jobs, many of whom will be skilled. This strategy must take into account the skills that are being deployed and developed in the eating and drinking out sector, particularly chefs. The government needs to ensure eating and drinking out employers are included within this strategy and that support for encouraging skills extends to our sector.”

Ladies of Restaurants stages second ‘in conversation’ event: Sexual harassment, motherhood, Brexit, and behaviour in the workplace were among the topics discussed at Ladies of Restaurants’ second “in conversation” event. The event at Our/London distillery was attended by more than 80 leading women from companies including Pizza Pilgrims, Inception Group, Tonkotsu, Pho, Soho House and Firmdale Hotels. The conversation included questions such as “how do you deal with senior male directors taking credit for your work”, “how do you handle the pressures of work and having a family”, and “what can be done to encourage more women into top positions to break the pay gap”? Ladies of Restaurants was launched in 2016 to help women who work in hospitality meet other women for support and advice. The collective, which is run by Natalia Ribbe-Szrok (Eighty Six List), Grace Willis (Spring) and Libby Andrews (Pho), now has more than 300 members from all areas of the industry.

Company News:

20% of shareholders vote against re-electing Keith Edelman at Revolution AGM: A total of 20% of Revolution Bars Group shareholders voted against Keith Edelman being re-elected as executive chairman at the company’s annual general meeting. A total of 5,205,858 (20.06%) of votes were received against the resolution out of a total of 25,953,256 that were cast. Edelman and the board had recommended Revolution shareholders should accept a £101.5m takeover bid by Stonegate Pub Company but they rejected the 203p per share cash offer in October. Edelman said he and the board believed an alternative merger proposal by The Deltic Group was not “in the best interests of the company” despite some shareholders reportedly being open to the move. Edelman has been executive chairman of Revolution Bars Group since Mark McQuater stepped down as chief executive a day after the Stonegate deal was rejected. Deltic has just bought a 3% stake in Revolution Bars Group.

Marston’s boss reveals co-located lodges add £250,000 per annum to pub sales: Marston’s chief executive Ralph Findlay has told Propel the company’s 20 lodges, typically offering 40 to 60 bedrooms, add circa £250,000 per annum in sales to the pubs they are co-located with. Findlay said the company would open its biggest lodge so far in Ebbsfleet, Kent, in January or February, offering 105 bedrooms. Marston’s will open 15 new-build pubs and six lodges in the current financial year, an opening plan Findlay described as “modest trim” on previous annual opening schedules, while the company stressed the increasing importance of accommodation. Accommodation like-for-likes rose 4.5% and revpar was 4.4% to £38 – occupancy rate rose 0.8% to 74%, with new lodges enhancing metrics with a revpar of £47, for example. Between five and ten lodges will be opened per annum, while the company is working on a new design that will integrate a pub and lodge. It stated: “Accommodation acts as a highly complementary income stream to an existing pub. Organic room income has been consistently strong with growth in both sales and revpar for each of the past four years and we anticipate similar trends in the future with growth in leisure and business visitors. We operate about 1,250 rooms across our Destination & Premium pub estate, including 22 lodges. We expect accommodation to be increasingly important to our investment plans and we are acquiring sites for development this year and thereafter. The combination of pub restaurant with adjacent lodge is attractive in the context of increasing business and leisure travel.” The company also revealed it had introduced a new premium offer, Accent, within its destination estate where the demographics supported it – Accent is an internal name only. Marston’s stated: “We continue to develop our offers to ensure we can remain attractive to all customers now and in the future. In 2017 we have introduced new concepts including Firebrand, a new Grill & Pizza offer, and Accent, a premiumised offer with broad demographic appeal, which are intended to enhance the experience for our customers while continuing to offer everyday value.” Findlay stressed Marston’s is “not complacent” about Brexit but its regional portfolio meant it didn’t rely on EU workers, who make up only 6% of its total staff numbers. Goodbody leisure analyst Brian Devitt called Marston’s results “solid” but said its Destination & Premium margins were under pressure. Issuing a ‘Hold’ note on the shares, he said: “Overall, the FY17 performance was as expected, the outlook is unchanged and the group remains committed to the dividend. These factors are likely to lead to these results being well received by the market in terms of the share price reaction. However, we continue to believe 2018 will be a difficult year for the sector. With Marston’s higher leverage and weaker cash flow profile, it could underperform peers in a tougher environment.”

Greene King reports Farmhouse Inns’ average weekly sales per site now £58,000 with Ebitda per pub £539,000: Greene King has reported average weekly sales per pub for its Farmhouse Inns brand are now £58,000, with Ebitda per pub £539,000. The company said the brand had delivered a “strong” first half of the year driven by successful brand optimisations, turning Fayre & Square pubs into Farmhouse Inns, a new-build programme, and its carvery model benefiting from poor August and September weather. While Farmhouse Inns has a northern geographic bias, Greene King said it was growing a national footprint for the brand. The company had 60 Farmhouse Inns at the end of the first half of the financial year, with four further openings by year-end. Greene King said it was focusing on four key brands – Local Pubs, which now makes up circa 60% of its Pub Company estate, and food brands Hungry Horse, Farmhouse Inns and Chef & Brewer. The company said 17 conversions took place in the first half of the financial year, with 70 planned for the second half. It reported a return on investment of more than 25% and was on track to exit Fayre & Square by year-end. As well as its brand optimisation programme, the company said it had three other priorities for the second half of the financial year – realising cost mitigation of £40m to £45m of its £60m cost increases; a £10m investment in value, service and quality that had already seen like-for-like food volumes up 1.3% in the past six weeks; and driving sales through local activity and local support. In its Pubs Partners division, the company said its average licensee term was now 70 months – up 25% since 2016 – while average Ebitda per pub was up 49% in four years. The company said it was driving its digital strategy, which included trialling an order-and-pay app and Cardlytics and reward cashback programmes. It said it had grown its customer database to more than six million active guests, engaged via an average of 50 campaigns per month. Greene King said it continued to invest in its people and 9,000 apprentices had completed training to date. It currently has 2,600 apprentices in training, with 60% of its pubs having an apprentice in learning. Greene King said it expected to open ten sites in its Pub Company division during the year, with between 50 and 60 disposals. Meanwhile, it expected to sell 40 to 50 Pub Partners sites with total disposal proceeds of between £90m and £110m. Goodbody leisure analyst Brian Devitt said the company’s results were in line with expectations but the outlook remained challenging. Issuing a ‘Sell’ note on the shares, he said: “Overall, we do not see a lot of surprises. Performance in the managed Pub Company business continues to indicate significant challenges. We have doubts over whether the volume trend improvement since year-end is benefiting the bottom line. The maintenance of the dividend will be seen as a positive but we would highlight the sector remains in a precarious position, with very challenging consumer trends, and management commentary throughout the statement reflects this. In terms of our forecasts, given what appears to be a significant level of discounting, the bias to numbers remains to the downside.”

David Lloyd secures permission for first two experiential leisure parks, plans up to 80 UK sites: Leisure entrepreneur David Lloyd has secured planning permission for its first two locations of Adrenaline World, a new chain of multi-activity parks, and is planning up to 80 UK sites. The company has received planning permission for the sites in Cheshire and Yorkshire, with submissions for full planning being prepared. The parks will host 20 indoor and outdoor sports including rock climbing, aerial obstacle courses, bungee jumping and abseiling. The first site, in Sandbach, Cheshire, will open at a cost of £9m following a build process of about seven months. The 18.5-acre site, near Junction 17 of the M6, includes two lakes and woodland. The second site is located south of Sheffield within the Peak Resort, a £400m leisure, health and sports development. Although a submission for full planning is being prepared, construction will not begin for 12 months to align with the development timetable of the resort. In partnership with Holmes Investment Properties, David Lloyd plans to roll out three parks every year for four years. They see the potential to open up to 80 Adrenaline World centres across the UK. Space for outdoor activities could vary but each location would have a 40,000 square foot activity centre, reports The Business Desk.

Hong Kong-based JIA Group brings Duddell’s brand to London for company’s UK debut: JIA Group, founded by restaurateur Yenn Wong, has launched a site for its Duddell’s restaurant and art space concept in London for the company’s first UK site. Duddell’s London has opened in St Thomas Church and, as at its two Michelin-starred counterpart in Hong Kong, showcases authentic Cantonese dishes and handcrafted dim sum. The kitchen is headed by former Hakkasan Group executive chef Daren Liew and offers dishes such as chargrilled black cod with Chinese-aged vinegar, and Guandong crispy salted chicken. Duddell’s London also features a destination bar focusing on wine and craft cocktails, while a mezzanine level offers a semi-private dining space overlooking the restaurant. Designed by Michaelis Boyd, the space has maximised elements of the grade II-listed building, with an altar retained on the ground floor alongside a new open dim sum kitchen. The bar has the retro feel of a 1960s Hong Kong “tea restaurant”. JIA Group launched Duddell’s in 2013 to create an “inspiring backdrop where people can meet, eat, drink and socialise while surrounded by museum-quality art exhibitions”. The company owns and operates 11 restaurants in Hong Kong, including Aberdeen Street Social in partnership with chef Jason Atherton.

Time Well Spent sells Surrey pub lease to focus on premium destination venues: Pub group Time Well Spent (TWS) has sold the leasehold of the Plough & Furrow in the village of Smallfield, Surrey, to focus on “premium destination venues”. TWS director Marc Jones said: “The Plough & Furrow was in our collection for just over three years and provided us with many lessons. Operationally stimulating, it also taught us a lot about what our core market should be – premium destination venues. TWS is committed to growing more heavily into the classic pub dining market in 2018. We are excited to have appointed celebrity chef Tony Tobin as our group executive. Tony, along with chef Ben Goldsmith, will oversee all our food offerings and our new production and experimental restaurant in Tadworth, Surrey.” Nick Earee, of agent Fleurets, marketed the Plough & Furrow’s leasehold off a guide price of £99,000. He said: “The pub has a lounge bar that can host 40 covers and a restaurant with capacity for 60. There is also a large beer garden and patio that can cater for more than 150 people.” TWS operates six pubs in Surrey and one in Sussex as well as the 28 Restaurant in Tadworth.

Dishoom co-founder – we’re not going for breakneck expansion: Shamil Thakrar, co-founder of Bombay-style cafe Dishoom, has said the company will not go for breakneck expansion as it focuses on quality rather than quantity. The first Dishoom restaurant opened in Covent Garden in 2010 and there are now five in London and one in Edinburgh.  Thakrar told Property Week: “Opening a site in Edinburgh was a natural step for us and there are a few other cities in the UK that could work, but we’re not going for breakneck expansion and we’re not looking for hundreds of sites. We have an internal rule that every time we open a restaurant, we deepen and we don’t dilute. We’re looking for really special locations, between 5,000 square feet and 10,000 square feet. We like to open in areas that will help us tell a story but we need them to be commercially viable as well, so some small towns and cities wouldn’t work.” The company has just opened its sixth site, in Kensington, west London, which features a theatre production, Night At The Bombay Roxy. It is set in Bombay’s jazz age and created by theatre company Swamp Studios. Running until Monday, 11 December, audience members enjoy welcome cocktails and a meal of Bombay dishes as the performance unfolds. Thakrar said: “When you come to our restaurants you walk into a story and we thought we could take that one step further.” Thakrar founded Dishoom with his cousin Kavi Thakrar and brothers Adarsh and Amar Radia – the brothers left the business earlier this year.

Gourmet Burger Kitchen opens Meadowhall site: Gourmet Burger Kitchen has opened a site at the Meadowhall shopping centre in Sheffield. The company has opened the 2,500 square foot restaurant – one of its largest – on the upper level of Meadowhall’s Oasis Dining Quarter, which has undergone a £60m refurbishment. The decor of the restaurant, which caters for 100 covers and has created 30 jobs, features steel and leather booths with glass tops, which gives it an industrial feel resonating with the city’s industrial past. Alice Keown, food and beverage asset manager for British Land, which jointly owns Meadowhall, said: “Gourmet Burger Kitchen launching at Meadowhall adds even more variety to the selection of family-focused restaurants on the upper level of the Oasis Dining Quarter. About 64% of our shoppers choose to have something to eat or drink when they visit so maintaining an exciting and high-quality leisure offer is of key importance.” Gourmet Burger Kitchen, which is owned by South Africa-based Famous Brands, has 91 sites in the UK.

TGI Friday’s expands Amazon partnership in US as it adds new voice ordering and pay capabilities: TGI Friday’s has expanding its partnership with Amazon in the US, adding Alexa voice ordering and Amazon Pay to its offer. TGI Friday’s chief information officer Sherif Mityas said the options would differentiate it from competitors and help the brand reach new audiences. He added anyone with an Amazon account and Amazon Prime members could order food without pulling out a credit card. Consumers can make orders and reservations at restaurants using Alexa, while some restaurants will offer Amazon Pay. The pay capabilities will be phased in throughout 2018, reports Nation’s Restaurant News. Mityas said alcohol delivery would come at a later date. Since introducing online sales a year ago off-premise sales have doubled, Mityas said, with 70% of online orders coming from new customers. He added: “This gives us access to the tens of millions of folks who interact with Amazon.” TGI Friday’s will continue to allow orders through its smartphone app, website, one-click ordering on Facebook, chatbots on Twitter, and pay at table through customer’s phones. The majority of TGI Friday’s guests still pick up their orders, Mityas said, with the order turnaround in the restaurant usually 20 to 25 minutes. TGI Friday’s has 460 restaurants in the US.

Daisy Green Collection launches floating bar and restaurant in Paddington: Australian-inspired restaurant group Daisy Green Collection has launched its floating bar and restaurant in Paddington, west London. Two 50-metre barges – Darcie Green and May Green – are based on the Grand Union Canal outside Paddington Station and have been designed by British artist Peter Blake. Darcie Green is the restaurant boat offering dishes such as Szechuan soft shell crab and giant chicken parmigiana. May Green offers a range of cocktails, new world wine and craft beer alongside a selection of snacks. In the summer months, the top decks of both boats will operate as alfresco drinking decks. The menus have been created by Daisy Green Collection founder Prue Freeman. She said: “Daisy Green is focused on creating exciting one-off local destinations that bring together laid-back Australian food culture, art and design. Their prominent position at the heart of the Paddington regeneration together with artwork from the godfather of British pop art, Peter Blake, make Darcie and May Green two very special vessels that we’re so excited to have introduced to Paddington Central.” The Daisy Green Collection operates eight sites in central London.

Giggling Squid launches first London restaurant, in Wimbledon Village: Thai restaurant group Giggling Squid, which is backed by the Business Growth Fund, has opened its first venue in London, in Wimbledon Village. The 100-cover venue has launched in High Street and is the company’s 22nd restaurant. Like all Giggling Squids, the Wimbledon venue has its own individual features including exposed brickwork, reclaimed mirrors, handcrafted furniture, floral wallpaper and tiled flooring. Classic Giggling Squid decor includes driftwood artwork and an indoor trellis hand-made by co-founder Pranee Laurillard. Giggling Squid is set to open a restaurant in Beaconsfield in Buckinghamshire “soon”, with another launching in Bath in January. Owned by Thai-born Laurillard and husband Andrew, Giggling Squid took a £6.4m investment from the Business Growth Fund in 2015 to accelerate growth plans. Founded in the basement of a tiny fisherman’s cottage, now Giggling Squid’s Brighton restaurant, the couple opened their first site in Hove in 2009.

Nando’s launches Southgate restaurant: Nando’s has opened its latest restaurant, this time in Southgate, north London. The 100-cover venue has launched in Station Parade creating 35 jobs. Steve Williams, regional managing director for the franchise, said: “We can’t wait to welcome peri-peri fans to our new restaurant in Southgate.” Earlier this month, Nando’s started work on a new-build restaurant in Hull ahead of an opening next year. Nando’s has more than 1,000 restaurants across the globe, with almost 400 in the UK and Ireland.

Deliveroo joins Standard to help deprived schoolchildren in London: Deliveroo has stepped up to help London’s deprived schoolchildren by backing the Evening Standard’s Christmas Appeal. The food delivery service has pledged £75,000 towards the Standard’s Help A Hungry Child initiative, which is raising money for The Felix Project to ensure primary school pupils don’t go hungry. Deliveroo founder and chief executive Will Shu told the Evening Standard: “The moment we heard about the Standard’s Help A Hungry Child appeal, Deliveroo wanted to play a part. We are donating directly ourselves and we’ll help our customers give too. I founded Deliveroo in London and no child in this, the greatest city in the world, should go hungry – especially at Christmas.” Since it was founded in 2013, Deliveroo has expanded to more than 200 cities in 12 countries and works with more than 30,000 restaurants. Customers will be able to donate to Help A Hungry Child using the Deliveroo app, while the firm will also use its dedicated kitchens, Deliveroo Editions, to deliver food to the hungry this Christmas.

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