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Fri 26th Jan 2018 - Update: JDW steak, Starbucks trading, Prezzo, Easyhotel
Wetherspoon to reintroduce steak next Tuesday: JD Wetherspoon is to reintroduce sirloin steak, rump steak and gammon steak in its 900 pubs across the UK and Republic of Ireland on Tuesday, 30 January. The three items have been off the menu at the company’s pubs since Tuesday (23 January) following issues at Russell Hume, a supplier to Wetherspoon and other companies including Jamie Oliver, Greene King and Marston’s. Wetherspoon has since cancelled its contract with Russell Hume and is sourcing its steaks from a range of new suppliers in Britain and Ireland. Wetherspoon chairman Tim Martin said: “ Firstly we wish to apologise to our customers for the inconvenience caused to them. However, our decision to stop serving steak from Tuesday (23 January), despite limited information from the supplier, was the correct one. Steak is one of the most popular dishes on our menu, and we serve around 200,000 per week on average, about half of these on our extremely popular Tuesday Night Steak Club. We have now sourced alternative suppliers and our pub staff are once again looking forward to serving the steak dishes from Tuesday, 30 January onwards. On Wednesday (24 January) the FSA reported that they were thoroughly investigating Russell Hume Ltd, but also stressed that there was no indication that people had become ill from eating meat supplied by them. We will continue to monitor the situation.” Wetherspoon pubs are displaying information on the situation for customers to read and the company has also added a question and answer document on its website.

Starbucks global like-for-like sales rose 2% in First Quarter: Starbucks has reported global like-for-like store sales increased 2%, driven by a 2% increase in average ticket in the first quarter to 31 December 2017. Like for-like sale in Americas and US increased 2%, driven by a 2% increase in average ticket. CAP like-for-like sales increased 1%, driven by a 1% increase in transactions. China like-for-like store sales increased 6%, driven by a 6% increase in transactions. Consolidated net revenues of $6.1 billion grew 6% versus the prior year. Active membership in Starbucks Rewards in the US grew 11% versus the prior year to 14.2 million, with member spend representing 37% of US company-operated sales, and Mobile Order and Pay representing 11% of US company-operated transactions. Starbucks Card reached 42% of US and Canada company-operated transactions. The company opened 700 net new stores globally, bringing total store count to 28,039 across 76 markets. The company returned a record $2 billion to shareholders in the quarter through a combination of dividends and share repurchases. “Starbucks reported another quarter of record financial results in Q1 of fiscal 2018, with consolidated revenues up 6% over last year – up 7% excluding 1% for the impact of streamlining activities in the quarter. China grew revenues 30% in Q1, with the strategic acquisition of East China positioning us to accelerate our growth in the key China market,” said Kevin Johnson, president and chief executive. “Today, Starbucks has two powerful, independent but complementary engines driving our global growth, the US and China. Our work to streamline the company is sharpening our focus on our core operating priorities.” Chief financial officer Scott Maw added: “Starbucks delivered solid revenue and profit growth and our first ever $6 billion revenue quarter in Q1. “We are laser-focused on accelerating growth in China and driving improvement across the US business as we move into and through the back half of the year, and remain committed to delivering on the long-term targets we announced last quarter.”

The Times – could Prezzo be next for restructuring?: The Times has suggested Prezzo could be the next casual dining company forced to restructure after Byron and Jamie’s Italian. The newspaper stated: “Prezzo, which has about 300 restaurants, is understood to be suffering like-for-like sales declines of about 6 to 7%, or even worse for its struggling Mexican brand, Chimichanga. According to a report just before Christmas by Debtwire, the debt market information provider, the company was on target to breach its year-end debt covenants. There is speculation that Prezzo, which hoisted a for sale sign over 27 of its restaurants last July, may be forced to close or sell as many as 50 underperforming restaurants if it is to remain a viable business. A source close to the group played down the scale of any potential disposals, but declined to comment on whether Prezzo had broken the terms of debt agreements with its lenders.”

Easyhotel acquires Milton Keynes site: Easyhotel, the owner, developer and operator of super budget branded hotels, has conditionally acquired a 125-year leasehold of part of Norfolk House on Silbury Boulevard, a central site in Milton Keynes. The development has already received planning permission and the acquisition will be completed subject to planning being finalised at the end of the judicial review period. Norfolk House is centrally located in the town centre, just 200m from the main shopping centre and just 0.3 miles from The Hub Milton Keynes, a major leisure scheme. The group intends to convert its part of the building into a 124-bedroom hotel, which is expected to open by mid-2019 at a total cost of approximately £8.7 million. The group opened its new hotel in Newcastle in December 2017 on time and on budget. Whilst the hotel has only been open for a few weeks the board is pleased to see this hotel trading in line with the strong performance of the hotels opened during the last financial year. Following the opening of its Newcastle hotel, the group currently owns seven hotels comprising 702 rooms, and it has a further 19 franchised hotels with 1,641 rooms. The group has a committed pipeline of seven owned hotels comprising 941 rooms. Construction of hotels in Barcelona, Leeds, Sheffield and Ipswich has commenced and the 517 rooms should all open in the summer of 2018. The planned hotel openings during the current financial year ending 30 September 2018 and beyond are expected to make a significant contribution to system sales, revenue and adjusted Ebitda going forward. Guy Parsons, chief executive of Easyhotel said: “We are delighted to have secured this site in Milton Keynes. Now in its 50th year, the town is home to many international business, has the third highest business start-up rate of any UK city and boasts an impressive range of shopping and leisure facilities. This acquisition is part of our ongoing strategy of offering comfortable, affordable accommodation in key tourist and business locations in the UK and internationally, and this completes the deployment of funds from our 2016 equity fundraising and bank loan. We continue to see a good number of attractive potential development opportunities, both in the UK and Europe to further accelerate the group’s growth. These are both larger and more numerous than we had originally anticipated. Consequently, the board is considering its finance options, which may include new equity and debt, to fund more hotels.”

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