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Thu 15th Mar 2018 - Propel Thursday News Briefing

Story of the Day:

Polpo pauses roll-out and refocuses strategy following £2m loss as it exits underperforming sites: London-based restaurant company Polpo has paused its roll-out and refocused its strategy in what it predicts will be a “transformational” year. The company, which operates Spuntino as well as its eponymous brand and is owned by Russell Norman and Richard Beatty, outlined its plans as it filed its accounts for the year ending 31 March 2017 at Companies House, which showed Polpo made a loss of £2m as it exited underperforming sites. It stated: “The headwinds felt in the sector have been addressed by Polpo via a refocus on the company strategy. Roll-out has been paused and a review of all business processes and systems has been undertaken to ensure the correct foundations are in place to enable a successful roll-out programme in the future. Spend per head and margin are currently strong due to a focus on menu re-engineering to manage input cost price increases and drive spend per head, rather than focusing on discounting. The customer journey has been made a lot simpler, for example simpler food and cocktail menus that have helped customers understand the Polpo proposition more easily. Events have also become a core focus for the group, which has helped drive covers and spend per head. A review of the supplier base has helped reduce indirect costs and improve margin without sacrificing quality. Employee retention has also been an important KPI for the group, especially in the wake of Brexit, and this metric has been improved from 70% turnover to 40% via a focus on reward and recognition across both front and back-of-house. Focus will now move to labour productivity, with the group bringing in Fourth hospitality to give the sites the ability to give teams the tools to manage labour more productively. FY18 is expected to be a transformational year for the company, with important foundations put in place to ensure its ongoing success.” The company saw turnover increase 6% to £14,255,958, compared with £13,392,318 the year before. Adjusted Ebitda was up to £1,506,416, compared with £1,323,611 the previous year. It made a pre-tax loss of £2,056,018, compared with a profit of £1,043,879 the year before as it closed underperforming sites. The company stated: “During the period, a new site was opened in Bristol in August. New sites in Exeter and Bristol Cargo2 were also identified and work started on these sites at the end of FY17. The two Harvey Nichols sites in Leeds and London were closed in summer 2016 after a review of their performance. Having reviewed the performance of the sites within the estate, an impairment charge of £1.24m was made. After the year-end, we’ve successfully exited Bristol and Ape and Bird in London at a combined premium of £1.085m and have closed Exeter. In addition, exiting the Harvey Nichols sites resulted in assets being written off at an accounting loss of £500,000 and an onerous lease charge of £1.2m being recognised.” Spuntino is set to make its move into UK airports in partnership with The Restaurant Group Concessions.

Industry News:

Social Media Strategy In A Day opens for bookings: Social Media Strategy In A Day, an event aimed at allowing companies to develop and hone their social media strategy, has been launched – and is open for bookings. The event features all-new content and insights to allow companies to increase brand exposure and broaden their reach. Propel has partnered with digital marketing company Digital Blonde for the one-day advanced workshop that will cover everything a marketing department should be thinking about when it comes to social strategy. The event, which takes place on Thursday, 26 April at One Moorgate Place in London, will open with Digital Blonde founder Karen Fewell revealing updates from recent industry reports and analysing insightful statistics. Attendees will be among the first to hear what she took away from the SXSW conference in the US. You will also learn the “top ten principles of persuasion for hospitality businesses”, which will show you how to apply psychological principles to help people buy your products and services. Craig Hill will help you unearth your brand character and show you how to tell others about it in an interesting and engaging way. During the “inspiration session”, you will look at ten killer social media campaigns – what worked and why are people talking about them. The “interactive guide to content brainstorming” will force you to look at a campaign in a more emotional and engaging way, while the Digital Blonde team will also look at the changes Facebook made to its algorithm earlier this year and reveal what it means for your social account. The “understanding user behaviour” section of the event will answer key questions such as how do you engage with millennials and do Gen Z even use Facebook any more? Fewell will round up the morning session by sharing the latest updates on the incoming General Data Protection Regulation. The afternoon will start with a quick-fire round of 20 questions in 20 minutes, while Jamie Riddell, of pay-as-you-go analytics platform BirdSong Data, will reveal useful things about user behaviour in the hospitality sector. The “ultimate content toolkit” talk will reveal the tools you need to create engaging content cost-effectively from your mobile phone. Social copywriter Nicola Proud will share her top copywriting hints and tips and reveal how to write Facebook, Instagram and Twitter posts that stop people scrolling. The event will also reveal how to use Instagram stories to drive revenue for your business and show the key differences between the social advertising platforms on Facebook, Instagram, Twitter and LinkedIn. Finally, the team will tell you where to find influential people, what to pay them and how to successfully build them into your strategy. Tickets are £295 plus VAT for Propel Premium members and £345 plus VAT for non-members and can be booked by emailing

Self-serve alcoholic drinks dispensers could ‘challenge brand loyalty’: The rising popularity of self-serve alcoholic drinks dispensers means brands may have to adapt to ensure consumer loyalty, according to a new report by data and analytics firm GlobalData. The company said the technology, which is perceived to cut waste, improve consumer choice and sales, and lower labour costs, encouraged sampling, meaning brands might have to “find new ways to encourage consumers to be brand-loyal”. GlobalData innovation insights director Tom Vierhile said: “Bars and restaurants have been the primary targets for self-serve alcoholic beverage technology but new installations in supermarkets, hotels and other hospitality venues such as cruise ships indicates the concept may have a broader application than first thought. Major brands may have to find new ways to encourage consumers to be brand-loyal in a climate that encourages sampling.”

Company News:

Conviviality cancels interim dividend payout as it bids to find cash for unexpected £30m tax bill: Conviviality, the UK alcohol wholesaler serving consumers through the on-trade and its franchise retail estate, has cancelled its interim dividend payment as it bids to make up a cash shortfall to pay an unexpected £30m tax bill by the end of the month. The company suspended its shares on AIM on Wednesday (14 March) and called in PricewaterhouseCoopers (PwC) to assist its discussions with HM Revenue & Customs and creditors. PwC is also helping the company to determine the impact of the funding shortfall on its earnings and compliance with its banking covenants. Conviviality stated: “Following the suspension of company shares from trading and pursuant to the steps being taken by the company to address the short-term funding requirement, the board has resolved to cancel the interim dividend of 4.5 pence per share that was due to be paid on Friday (16 March). As a result of the cancellation of the dividend, the company’s cash position is improved by about £8.2m.” Last week, Conviviality warned it expected adjusted Ebitda to come in 20% below market expectations. In a further update on Tuesday (13 March), the company said it would fall in a range of between £55.3m and £56.4m. 

Boxpark reveals future site requirements as it eyes further expansion: Boxpark has revealed its site requirements as the company looks to expand its concept. Boxpark is seeking open land or vacant plots in mixed-use development schemes in “urban centres”, with “London and other major cities preferred”. The space requirements range from 10,000 square feet to a maximum 100,000 square feet. Leasehold requirements are for a minimum of five years, but Boxpark said it would also consider freehold sites. Earlier this month, Boxpark partnered with underground event organisers LWE to launch music concept HotBox at its Croydon site. Boxpark, founded by Roger Wade, also operates a site in Shoreditch and is due to open its Wembley joint venture with developer Quintain at the end of the year.

Ministry of Sound to open private members’ club in Southwark, plans further sites: Nightclub and music label Ministry of Sound is making a move into the private members’ club and co-working offices sector. The company has signed a lease for 50,000 square feet at a former factory in Borough Road, Southwark, close to where Ministry of Sound opened the UK’s first club dedicated to house music at a former bus garage in Elephant & Castle in 1991. The property is the first in a series of planned sites for its new business venture, The Ministry. The first site will open in July comprising offices, a restaurant, bar, a 36-seater cinema, studios, private dining rooms, events space and meeting suites. The venture will be aimed at workers and businesses in creative industries, including music companies, startups, television and film producers, PR groups and fashion designers. Membership fees will be available on application. Chairman Lohan Presencer told the Evening Standard: “The Ministry will be a stark contrast to the generic glass box offices, bored receptionists, bad coffee and gratuitous beer taps that have become synonymous with bland co-working spaces around the world. The people we grew up with are now the founders and chief executives of startups and established businesses. The Ministry is for these people.” Other areas the company is eyeing include Camden and King’s Cross. The new division’s property development manager, Alfie Baldwin, who was hired from Savills, has been at the Mipim property conference in France to meet prospective landlords.

Abbot Grange secured creditor faces almost £600,000 shortfall: Coutts, secured creditor of East Midlands-based hotel group Abbot Grange, is facing a shortfall of almost £600,000, a new document has revealed. A progress report filed at Companies House by joint administrators Matthew Ingram and Sarah Helen, of Duff & Phelps, covering the period 16 August 2017 to 15 February 2018, showed Coutts, which was owed £2,797,574, had now received a total of £2.18m. A further £180,000 was distributed during the period, with the bank having previously received £2m following the sale of the 15-bedroom Bridge Hotel in Thrapston and the grade II-listed Dovecliff Hall in Stretton, near Burton-on-Trent. The administrators said a further £40,000 might be available to Coutts, meaning it faced a shortfall of £577,574. Preferential creditors’ claims amounted to an estimated £3,305, relating to wages and holiday pay arrears for five employees. The administrators said there would be insufficient funds to make a distribution. Non-preferential unsecured creditors were owed a total of £506,981, with claims received to date of £127,215.05. The administrators said there would be insufficient funds to enable a distribution. Abbot Grange went into administration in February 2017 and, as previously reported, Dovecliff Hall was sold on 27 June last year to REDML Hotel for a net consideration of £1,834,893. Meanwhile, the Bridge Hotel was acquired by Simitra on 30 March last year for a net consideration of £681,513.

Healthy restaurant and dry bar concept Redemption launches £300,000 crowdfunding campaign to open two central London sites: Healthy restaurant and dry bar concept Redemption has launched a £300,000 fund-raise on crowdfunding platform Crowdcube to open two sites in central London. Redemption Bar, which is London’s only vegan, sugar-free, wheat-free and alcohol-free restaurant, currently operates sites in Notting Hill and Shoreditch. The company is offering 10.71% equity in return for investment, with funds going towards opening sites in Covent Garden and Southbank Place and a goal of global expansion through franchising. Investors will be offered a range of rewards, including 50% off the bill when dining at any Redemption site. Former Virgin marketing chief Catherine Salway and restaurateur and chef Andrea Waters opened the first Redemption Bar in Notting Hill in 2015, followed by a Shoreditch sister site in January 2016 that “broke even within the first three months and now generates a 10% net profit per week”. Salway said: “We are on the cusp of a really exciting growth plan. As well as launching two sites in central London, we are very optimistic about ethical franchising across the globe.”

Pie & Ale and Bakerie operator enters administration: RWB Leisure, which operates the Pie & Ale and Bakerie concepts from two sites in Manchester’s Northern Quarter, has entered administration. Rob Adamson and Mark Ranson, of Armstrong Watson, have been appointed joint administrators. Adamson said: “Immediately prior to our appointment, but in conjunction with ourselves, the directors made the difficult decision the company should cease trading due to its ongoing financial obligations. Regrettably, this has resulted in the redundancy of all 33 employees. My staff met with the employees to advise them of the position. An employment specialist also attended the company’s premises to assist staff in preparing their claims to the Redundancy Payments Service. It is early in the administration process to comment on any likely payment to creditors, which will depend on the realisable value of the company’s assets and the extent of its liabilities. The assets, consisting of both fully furnished leasehold premises, are to be marketed for sale by Sanderson Weatherall.”

Laurent Tourondel to open debut UK restaurant, at Hotel Cafe Royal in London: French-born chef Laurent Tourondel is returning to London to launch his first UK restaurant. Tourondel will open the venue at Hotel Café Royal in Regent Street in May. He is best known in the US, where he has restaurants in New York, Miami and North Carolina. Tourondel also owns restaurants in Hong Kong, Kazakhstan and the Caribbean, with the London opening his first venture in Europe. Tourondel trained in France before moving to London, where he worked in the kitchen at Boodles. International influences will be evident across the menu at the new 110-cover restaurant, which will be on the first floor of Hotel Café Royal. An open kitchen, grill and sushi bar will offer all-day dining. Tourondel said: “I am thrilled to be returning to London. Having worked for years at Boodles, I cannot wait to create a new home in the iconic Hotel Café Royal.” Hotel managing director Guillaume Marly added: “We pride ourselves on bringing world-class chefs and cuisine to our guests. I am delighted to welcome Laurent to our hotel.”

Freehold of former Walkabout site in Liverpool sold for £1.5m: The freehold of a former Walkabout site in Liverpool has been sold by agent Davis Coffer Lyons on behalf of Pear Securities for £1.5m to an un-named local operator. The 22,120 square foot former Victorian warehouse features a split-level bar beneath a ground-floor atrium. There are also additional bar areas and a dance floor on the first floor, while the upper floors offer staff accommodation and plant rooms. Davis Coffer Lyons executive director Paul Tallentyre said: “This is an exceptional site with substantial potential in the heart of the drinking and late-night circuit. The new owners have great plans for the site and we have no doubt that with their experience and local knowledge, they will make it an enormous success.” Meanwhile, Walkabout owner Stonegate Pub Company has launched a new spring menu for the brand. It features new burgers alongside changes to the menu’s sharing plates and parmi sections, plus new vegetarian options. Walkabout marketing manager Hayley Pipe said: “So many Walkabout dishes have helped build our brilliant fan-base and we’re confident the new additions will prove just as popular.”

City District Group lines up Birmingham site for fifth Fazenda: City District Group is lining up a site in Birmingham as a fifth venue for its Brazilian rodizio restaurant brand Fazenda. Founders Robert Melman and Tomas Maunier have applied to the city council to occupy the last remaining unit within the refurbished 55 Colmore Row. It will take the unit on the corner of Church Street and Barwick Street at the back of the building, with the restaurant expected to open in September, reports The Business Desk. A design and access statement accompanying the application stated: “Fazenda will operate the majority part of the restaurant areas at the rear (lower-ground level) of the overall 55 Colmore Row building. The proposals comprise modest and appropriate changes, which would not have a detrimental effect on heritage assets in overall terms. They are relevant to support the continued use of the listed building with new street-level restaurant activity and will positively enhance the conservation area and character of Barwick Street.” City District Group’s other Fazenda restaurants are in Edinburgh, Leeds, Manchester and Liverpool, while it operates sister brand Picanha in Chester.

The Real Greek to launch 30-item vegan menu: Mediterranean restaurant The Real Greek, which is owned by Fulham Shore, is launching a standalone vegan menu. Created in collaboration with Greek cook Tonia Buxton, the 30-item menu, which launches on Wednesday, 21 March, will pay homage to Greece’s rich heritage of vegan cooking and the fresh ingredients found in Greek and Cypriot cuisine. Dishes will include jackfruit stifado (Greek stew made with slow-cooked jackfruit, button mushrooms, shallots and aniseed), and vegan moussaka (layered potato with seasoned courgette, aubergine and slow-cooked jackfruit mix, cooked with cinnamon). In 2010, The Real Greek was the first restaurant to include calorie information for each of its dishes on the menu – the vegan menu will do the same. Operations director Christos Karatzenis said: “While The Real Greek has always been proud to have a variety of vegan-friendly options on its menu, creating a dedicated menu was a natural step for us. Veganism is ingrained in Greek history and culture, with the first vegan diet created by philosopher Pythagoras in 550 BCE – it was more than a theory!” 

Black and White Hospitality to launch second site for English chophouse concept, in Manchester next month: Black and White Hospitality, which owns the rights to five restaurant brands belonging to chef Marco Pierre White, is to open its second Mr White’s English Chophouse, in Manchester. The venue will open in April within the KRO Hospitality-owned Velvet Hotel in Canal Street. The Manchester chophouse is the second site for the brand following its launch in Whitechapel, London, with plans to roll out the concept. Black and White Hospitality chief executive Nick Taplin said: “We’re looking to increase the number of venues over the coming 12 months. A lot has changed in the past few years and the demand for authentic, simple dishes has become increasingly popular. This is a trend we believe is here to stay.” Pierre White added: “The idea is to be generous with the portions and make things affordable. It’s a distinctly British idea so it’s great to see it coming to fruition.” Black and White Hospitality’s other Marco Pierre White brands are Steakhouse Bar & Grill, New York Italian, Wheeler’s of St James’s, and Bardolino Pizzeria, Bellini & Espresso Bar. KRO Hospitality owner Kim Eivind Krohn said the hotel’s Velvet Bar would continue to trade as normal having just reopened following a major refurbishment.

Owner puts Cornish brewery on the market: Coastal Brewery, based in Redruth, Cornwall, has been put on the market by owner and head brewer Alan Hinde, who is seeking offers in the region of £100,000. The sale includes a six-barrel brewkit, five fermenting vessels, hot and cold liquor tanks, a cold room, a new van and 988 casks. The unit also has its own taproom with four keg lines and a bottle shop. The company’s core beers include Hop Monster, Angelina, Merry Maidens Mild and St Piran’s Porter, alongside seasonal and special brews. Hinde founded Coastal Brewery in 2005, moving to larger premises on Cardrew Industrial Estate four years later. He is moving back to Cheshire. Hinde said: “I’ll miss brewing, of course, but the business is in good shape with a large and loyal customer base – mostly outside Cornwall – and a convenient site close to the A30 with good transport connections.”

Star Pubs & Bars offers bespoke EPOS solution for licensees: Star Pubs & Bars has negotiated a new deal with leased and tenanted experts Microtill that offers its licensees bespoke EPOS solutions. The company said the move followed licensees’ demand for support in sourcing more sophisticated EPOS systems, reflected the increasing size and complexity of many Star pub businesses following investment in outdoor areas, function rooms and food. The EPOS package includes hardware, software, installation, training, and a national maintenance and repairs service with guaranteed call-out times. Options are flexible so licensees get a bespoke system with costs tailored accordingly. Licensees can access items such as tills and management systems and can run loyalty schemes. Cloud software can report stock-taking, wastage and live sales information such as customer numbers, spend and dwell time. Star Pubs & Bars buying director Steve Dancer said: “Getting the right EPOS system can revolutionise the way a pub operates and, used correctly, boosts profits. It is fundamental to keeping a business on track, understanding trading patterns and staff performance, and running a pub effectively and efficiently. It’s also one of the most complex pieces of equipment a pub needs and with hundreds of suppliers and software and hardware options to consider, it’s difficult and time-consuming for licensees to choose a system. We’re happy to have been able to do the legwork.”

Numis Securities – The Restaurant Group is cash-generative with no turnaround price built in: Numis Securities leisure analyst Tim Barrett has said The Restaurant Group is cash-generative with no turnaround price built in. Issuing a ‘Buy’ note on the shares with a target price of 400p, Barrett said: “Last year, the combination of 3% like-for-like sales decline and cost pressures led to a 20% fall in Ebitda and 250 basis points attrition in margins. Despite this, cash generation was strong, net debt fell by £6.7m and the group was able to fund 17 openings (3.5%) and a £35m dividend from internally generated cash. In the medium term, we expect The Restaurant Group’s expansion in the attractive pub and concession niches to drive earnings growth. Meanwhile, the openings are offsetting contraction in the leisure brands and creating a stable cash position to fund the dividend, which now offers a 6.8% yield. Our FY18 forecasts rest on the group returning to like-for-like sales stability in FY18, with the expected decline in the first half being offset by growth in the second half. With volumes close to flat in Frankie & Benny’s (-0.4%) in the first eight weeks and the potential stimulus from the group’s marketing efforts, digital initiatives and new delivery product, we remain confident of continued momentum. However, this clearly remains the main risk and the turnaround is happening against a soft market backdrop (Peach like-for-like sales -0.5% in the last six months). Each percentage point on like-for-like sales has an 8% to 10% earnings impact, other things being equal (and marginally lower in the concessions sites). In the casual dining market, three years of increasing wages, rates and the cost of goods has left a number of privately owned restaurant brands over-leveraged and has resulted in some high-profile Company Voluntary Arrangement processes (we estimate more than 150 sites have closed in the year to date). Our analysis shows The Restaurant Group stands out in its balance sheet strength and is likely to be a net beneficiary of the capacity withdrawal in due course. That said, the cost pressures will still apply (£16m to £19m) and a return to positive earnings momentum will also require another year of well-executed mitigation, similar to this year. The Restaurant Group currently trades on an FY18 price-to-earnings ratio of 11.6 times (12.8 times provision adjusted), free cash flow yield (pre growth capex) of 12.4% and dividend yield of 6.8%. Cash dividend cover was 1.6 times in FY17 and we forecast similar cover for FY18. Our favoured valuation approach is a sum of parts, acknowledging the higher-earnings quality of the pub restaurant business (largely freehold-backed) and concessions division. We value the former at £2.5m per pub, or £135m, and concessions at ten times (versus SSP on 12 times), giving a target price of 400p.”

Barworks to launch Mare Street Market in Hackney this month: Barworks, the central London bar and pub operator, is to launch Mare Street Market this month. The venture will consist of a 10,000 square foot space in Hackney that will house restaurants, a bar and various other elements such as a record shop curated with east London record label Stranger Than Paradise. Other features will include Gizzi’s Deli, a partnership with chef and food writer Gizzi Erskine that will showcase local food brands and unique products. Erskine will also run a farm-to-fork restaurant at the site, while there will be a Flying Horse coffee shop and roastery, podcast studio Mare Street On Air, florist Rebel Rebel, restaurant-cum-shop Pure White Lines featuring antiques and furniture from Matt Goss, and a pop-up space hosting events, exhibitions, theatrical productions, product launches and installations. Barworks’ portfolio consists of 12 pubs and nine diners across the capital.

India-based fine dining restaurant Chokhi Dhani to make UK debut next month, in Battersea: India-based fine dining restaurant Chokhi Dhani is to make its UK debut next month, in London. The restaurant in Riverside Walk, Battersea, is the brainchild of chef, hotelier and entrepreneur Kriti Vaswani. She is following in the footsteps of her father, Gul Vaswani, who opened the first Chokhi Dhani in Jaipur, Rajasthan, in 1990. As well as highlighting dishes from the state, Chokhi Dhani London will feature dishes from across the subcontinent. Vishnu Natarajan, former executive head chef at Carom in Soho, will oversee the menu, working alongside Bhagwan Singh, an expert on Rajasthani cuisine, senior sous chef Mohammed Naseem Qureshi and pastry chef Rakesh Sharma. The venue, which will open on Thursday, 12 April, will feature a street food concept on the ground floor with a luxury dining room upstairs. 

Krispy Kreme to open first Irish store: Krispy Kreme has confirmed it will open its first store in the Republic of Ireland later this year. The company will open the site, which will also include a drive-thru, at Blanchardstown Shopping Centre in Dublin in October. Visitors will be able to see the doughnuts created and cooked in-store. Krispy Kreme Ireland country director Alex Drysdale told “It is with great excitement we announce Krispy Kreme is coming to Ireland this October. Our Blanchardstown build is under way and we will soon announce recruitment details for our Irish operation. We look forward to welcoming all our Irish fans and those yet to have their first Krispy Kreme experience.”

St Austell Brewery relaunches Cornish hotel and pub made famous by Poldark: Cornwall-based St Austell Brewery has reopened a hotel and pub in the county made famous by BBC television series Poldark. The company acquired the 27-bedroom Pier House Hotel at historic Charlestown harbour from the Morcom family in December 2016. The venue has reopened following a £380,000 refurbishment that has involved adding an extended bar at the core of the building and a terraced seating area with harbour-side views. The project was overseen by St Austell Brewery property manager Patrick Gribbin. He said: “By increasing the accessibility we’ve opened the site up to many more people and allowed guests more opportunities to appreciate the hotel’s amazing views.” Retail director Steve Worrall added: “The Pier House looks stunning, inside and out.”

Winemakers Club owner reveals potential revival plans for Deptford site: London-based wine importer Winemakers Club has said it might not be curtains for its Deptford site, which closed earlier this month. Owner-director John Baum has revealed he plans to regroup for six months before looking to reopen. He told Hot Dinners: “We are not getting rid of the site. We decided to close because, although we were full a couple of days of the week, we were a lot quieter than we hoped the rest of the week and, with the amount of staff we had, it became increasingly difficult to continue. I decided to close for six months to regroup and come back later with an idea a little more catered for our customers and the area.” Baum said the site would probably operate from Thursday to Sunday but warned that would depend on staffing and “finding the right people for the positions”. He added: “In no way do we wish to slip away from the quality we produced day to day, which earned us our reputation. We love being in Deptford and still believe 100% it is one of the most exciting places in London right now. We are incredibly proud of what we managed to achieve in the past year.” In the meantime, there are plans to use the site for “various wine-based events”.

Vivino wine app appoints new chief executive: Wine app Vivino has appointed Chris Tsakalakis as chief executive. Tsakalakis is former president of online ticket exchange company StubHub and takes over from Vivino founder Heini Zachariassen, who will remain on the board. Tsakalakis will lead Vivino’s expansion targets, which include $1bn in annual sales, entering new markets, releasing new e-commerce products, and expanding offerings for retail partners. Tsakalakis said: “No other company has Vivino’s large active customer base, user-generated data and trusted retailer relationships. I believe Vivino can disrupt the $300bn wine industry in the same way StubHub and Netflix changed their respective industries.” Zachariassen and Theis Søndergaard founded the company in 2010. It operates a wine rating system powered by a community of 30 million wine enthusiasts. Zachariassen said: “The time is right to bring on a new chief executive who knows how to build a large global marketplace that can change the way wine is discovered, shared and sold.”

Peel Hunt – Domino’s Pizza Eurasia has ‘remarkable long-term growth story’: Peel Hunt leisure analyst Ivor Jones has said Domino’s Pizza Eurasia has a “remarkable long-term growth story”. Issuing a ‘Buy’ note on the shares with a target price of 300p ahead of its maiden preliminary results next week, Jones said: “The company’s trading statement was published on 23 January. We inferred from this that FY17E was in line at the Ebitda level; we forecast TRY98m. Full-year system sales growth of 33% (to TRY860m) was higher than our 30% forecast growth. This was in part the result of a higher rate of new store openings than we expected in Russia (49, our forecast of 40), which would in the initial stages of trading have added to revenue but not to profits. Like-for-like sales growth in FY17 was 10% in Turkey (7% in first-half 2017) and 29% in Russia (in roubles 31% in first-half 2017). System sales growth in Turkey was 14% (up from 10% in first-half 2017) and 169% in Russia (200% in first-half 2017). The second-half 2017 acceleration in Turkey should be seen in the context of disruption to the business from political unrest in the second half of 2016. We forecast 80 stores will open in 2018 (30 in Turkey, 50 in Russia) and we believe management was cautious in its guidance to the market in relation to store openings. Our like-for-like sales forecast is 7% for Turkey and 13% for Russia. We believe there is upside here too – online was 52% of delivery system sales in the second half of 2017 and grew 72%. We believe the fast growth in online will increasingly influence the overall growth rate positively. We forecast a modest upward trend in Ebitda margin in both Turkey and Russia, although we expect the group average to fall in FY18 as a result of mix. Strong growth should support efficiency gains but there may be some pressure from underlying cost inflation, and we will be paying close attention to this when the preliminary results are released. The January trading statement confirmed FY17 had ended as expected. The prelims will probably confirm the building blocks for growth are in place. More evidence of concrete progress may be required before the share price moves ahead, particularly while Turkven’s 44% stake could be perceived as an overhang. DP Eurasia has a remarkable long-term growth story, which could be enhanced by acquisitions. A familiar and powerful brand, market leadership in Turkey, and growing evidence of success in Russia are an appealing combination. We reiterate our ‘Buy’ rating and 300p target price.”

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