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Fri 4th May 2018 - Propel Friday News Briefing

Story of the Day:

Laine owner to roll out business model across additional pubs, open to further sector deals: The new owner of Laine Pub Company plans to take the business model outside Brighton and London through additional investment and acquisitions and may also look to roll it out in some of the circa 1,300 Punch pubs it also owns. Vine Acquisitions, which is backed by Patron Capital and May Capital, has acquired Laine in partnership with its management team. May Capital founder Noah Bulkin told Propel: “We are very impressed by Gavin George and his team and the way the business has been built up, as well as the passion of the management partners who run the pubs. The pubs are different but are all run with the community in mind. They offer a real experience to customers and get people talking. We see a great deal of potential for that model across the UK. Laine has historically leased a number of Punch pubs and we think we can do that in more pubs, some we own and some we don’t yet.” Bulkin said Vine would continue to look to acquire pubs to add to Laine’s portfolio, which consists of 54 sites – 33 in Brighton and 21 in London. In addition, Laine operates four further pubs through its Mash Inns joint venture with Ei Group. Bulkin added: “We think there’s plenty of room for growth, particularly in London.” Bulkin said Vine would also invest in the brewery side of the business and was already in talks to take Laine’s beers to a wider audience as well as introducing them into certain Punch pubs. “The popularity of beers such as Source, Ripper and Word is amazing,” said Bulkin. “They taste great, are fresh and have a fantastic story. We are seeing huge appetite for them and will invest heavily to support scaling their production. We are really backing Gavin and his team – they will continue to run the business as they have done and we are committed to preserving Laine’s independence.” George said: “We are delighted to be partnering with Vine Acquisitions, Patron Capital and May Capital on the next stage of Laine’s journey. With its support, we will continue to invest in our pubs and management partners and have exciting plans to take our portfolio of beers to the next level.” Stephen Green, senior partner of Patron Capital and director of Vine Acquisitions, added: “Laine’s portfolio of pubs in London and Brighton is unique. The energy and passion of the Laine team and all the management partners are at the heart of their success, and we look forward to helping support the future growth of this fantastic business. We also believe Laine’s craft beers have tremendous potential.” Bulkin said Vine was also open to further acquisitions in the sector. He added: “We are big believers in the industry and UK pubs and we would certainly look at further deals. We believe we take a different approach to some people when we do investments. We are cautious and look at things carefully and in a disciplined way before going into a deal.” Gavin led a management buyout of Laine backed by Graphite Enterprise Trust (now ICG Enterprise Trust) and Risk Capital Partners in 2014. The deal with Vine sees both investors exit completely.

Industry News:

Propel and Professor Chris Edger launch Inspirational Leadership In Tough Times Masterclass: A new masterclass launched by Professor Chris Edger and Propel is now open for bookings. The Inspirational Leadership In Tough Times Masterclass will take place at Chartered Accountants Hall in Moorgate Place, London, on Thursday, 21 June. With our industry buffeted by five major headwinds – higher costs, labour shortages, low consumer confidence, too much capacity and concept fatigue – the businesses that win through will be led by inspirational leaders who galvanise their people to achieve extraordinary feats. The masterclass will provide insights and tips into how you can perfect being an inspirational leader. Drawing on material from his nine books on leadership, Prof Edger will outline how inspirational leaders mobilise their teams and businesses to outperform the market in challenging circumstances. Speakers will include Gary Harris, deputy chairman of British Rowing for almost 20 years during a period of unprecedented success, who will outline ten key insights into coaching outstanding performances from teams and individuals. Meanwhile, writer and lecturer Dr Nollaig Heffernan, co-designer of the ILM72 psychometric test, will outline the key components that underpin mental toughness for inspirational leaders and how to incorporate them to overcome everyday stress and challenges. For the full schedule, click here. Tickets are £295 plus VAT for operators and £445 plus VAT for suppliers, while tickets for Propel Premium subscribers are £245 plus VAT. To book, email anne.steele@propelinfo.com or call 01444 817691.

Propel summer conference and party open for bookings, Matthew Kirby to present: The Propel summer conference and party on Thursday, 5 July at The Oxford Belfry is open for bookings. This year we have the usual great conference followed by crazy golf at Junkyard Golf in Oxford plus a barbecue and live band karaoke back at the hotel. Matthew Kirby, chief executive of Chozen Noodle, will talk about expanding the brand and its sub-brand Chow Asian kitchen in different formats, the challenges and opportunities of trading in motorway service stations, the retail landscape, and future plans. Operators can claim up to two free places by emailing anne.steele@propelinfo.com or calling her on 01444 817691.

Mini-heatwave drives 4.4% rise in B&B bank holiday bookings: Last month’s “mini-heatwave” has led to a 4.4% year-on-year rise in bed and breakfast bookings for the forthcoming bank holiday weekend, according to data from Eviivo, the online booking specialists for independent hotels and B&Bs. Britain’s seaside resorts fared even better, with a 5.7% year-on-year increase in bookings. Top-performing resorts included Blackpool, Skegness, Lowestoft and Great Yarmouth. The good news follows disappointing results in many of Britain’s hospitality sectors following freezing temperatures and snow in February and early March, with some parts of the country still experiencing snow at Easter. However, the late-April warm weather has led to uplifts across Britain, particularly in Northern Ireland, north west and central England, and Wales. The bed and breakfast sector contributes £2bn to the British economy, leading Eviivo to launch National B&B Day in March. Marketing director Ed Goldswain said: “In the week following National B&B Day we witnessed an 8.1% increase in bookings year-on-year. It’s great to see the day has helped reignite the UK’s love affair with B&Bs.”

Crowdcube hits £400m milestone for funds raised: Crowdfunding platform Crowdcube has hailed its most successful three-month period since it launched seven years ago after hitting a total of £400m pledged. Of that £400m pledged, £335m was successfully invested in companies. For the first three months of 2018, a total of 49 businesses were funded through the platform with £22.8m invested, more than in any other quarter. Four businesses raised £1m or more including Swindon-based Recycling Technologies, which raised £3.7m from more than 1,500 investors. Crowdcube co-founder Luke Lang told Insider Media: “Crowdcube has had a great start to 2018 and, with a number of exciting businesses and developments in the pipeline, that momentum looks set to continue throughout the year. With the backing of our community of investors, we’ve helped more businesses this quarter than ever before to raise the funds needed to grow or get their idea off the ground. That’s amazing and something we’re extremely proud to have been part of.”

Company News:

Wahlburgers targets 50 UK sites within five years, initial focus on central London: US burger chain Wahlburgers has targeted 50 UK sites within five years having secured its debut restaurant in Covent Garden, Propel has learned. Restaurant Property has been appointed sole agent for Wahlburgers in the UK, with the company seeking prime sites in high-footfall areas. The first five sites are planned for central London within the first 12 months. The debut venue is due to open in September in James Street at a site formerly occupied by Maxwell’s Restaurants Group. The two-storey site, which consists of 1,859 square feet of ground-floor space and 4,352 square feet in the lower ground floor, has been leased from landlords Capital & Counties (Capco). Massachusetts-headquartered Wahlburgers is the brainchild of chef Paul Wahlberg and his Hollywood actor brothers Donnie and Mark. Founded in 2011, its menu features fresh burgers and homemade condiments. The brand has stores in 22 US cities and also features in an eponymous behind-the-scenes reality television series. Mark Wahlberg, who will attend the Covent Garden launch, said: “I am delighted to announce Wahlburgers is coming to the UK and we have the best possible location, one of the most visited areas in the world.” Restaurant Property founding director David Rawlinson added: “We are delighted to have been able to help the Wahlbergs secure their first London site in such a prime location. Covent Garden is packed with shoppers, theatre-goers and tourists all year round so it’s the perfect home for Wahlburgers. We’re sure it will be a tremendous success.”

Harvey’s reports turnover and profit boost: East Sussex-based brewer and retailer Harvey’s has reported turnover increased to £21,722,375 for the year ending 31 December 2017, compared with £20,894,930 the year before. Operating profit rose 24.5% to £2,552,956, compared with £2,052,310 the previous year. Pre-tax profit was up to £2,479,047 compared with £2,017,708 the year before, according to accounts filed at Companies House. In their report accompanying the accounts, the directors stated: “For a fourth consecutive year Harvey’s can report an increase in annual turnover in excess of 3.7%. 2017 also showed a remarkable 24.5% increase in operating profit, a testament to the company’s management and staff diligence. This enterprise and efficiency comes despite a very challenging economy with an uncertain future. Adaptation has been key for the company’s business in recent years. The increases in turnover can be linked to the development of directly-managed public houses. The reasons for profit improvement reflect more complex reaction to the fast-changing beer and hospitality markets. Other factors include improved cost efficiencies and the resilience of the Harvey’s brand.” At the end of the period, the number of employees increased to 228 from 214 the previous year.  

Hospitality chat app Yapster secures bridge funding: Hospitality chat app Yapster has secured bridge funding after hitting its target on Crowdcube. Last month, co-founder Robert Liddiard put its £650,000 campaign on the crowdfunding platform on hold in favour of a “smaller, private, bridge financing round from known investors who had already expressed interest”. Yapster offered 3.20% equity and more than doubled its £90,000 target, raising £198,590 from 27 investors. The bridge round has now closed. Liddiard said at the time: “Some recent positive developments mean we are changing the way our raise is structured. As a result of the interest we have generated through the Crowdcube platform, we have been approached by a number of potential institutional investors who are able to deploy larger amounts of capital (including future follow-on capital if needed). We have been advised of an opportunity to access the government’s Open Innovation grant, potentially worth up to 70% of a £1m investment. To give us sufficient time to explore these opportunities while ensuring we do not lose our current momentum, we have decided to put our public raise on hold in favour of a smaller, private, bridge financing round from known investors who have already expressed interest.” Liddiard launched Yapster with Craig McMillan. Their app enables “more effective and efficient communication” for companies with mobile workforces. Staff can send one-to-one and group messages, initiate flash polls and post to the company newsfeed.

Young’s reopens Smiths of Smithfield: London pub retailer Young’s has reopened Smiths of Smithfield, the grade II-listed City pub it acquired in November. The 800-capacity venue in Charterhouse Street has been fully refurbished by Harrison Design. Spread over four floors, each level provides a distinctive experience. On the ground floor, the Café & Bar offers all-day brunch plates, sharers and pub classics alongside lighter, healthier dishes. The drinks list includes London distilled spirits, craft beer and cask ale, cocktails and premium spirits, while the wine list features accessible bins, fine wine and a “sommelier’s selection”. The Death + Victory cocktail lounge is on the first floor, with cocktails divided into time periods from 1150 to the present day and taking cues from historical events. The Grill on the second floor takes inspiration from Smithfield meat market, offering locally sourced prime cuts and day boat fish paired with wine and lager. A chef’s table seats 12 with views of the butchery. As well as a rooftop terrace, the top floor hosts 100-cover restaurant No3 at Smiths with signature dishes including roasted halibut and slow-roasted shoulder of Hampshire lamb. Following Young’s acquisition of the venue, chief executive Patrick Dardis told Propel the company would invest up to £800,000 in the site. He said: “Smiths of Smithfield is a perfect fit with our premium food and drink offering and will immediately become our largest venue with an average weekly take of more than £100,000.” 

Pret makes plastic pledge: Pret A Manger has made a three-point “plastic pledge”. The company plans to use 100% recyclable, reusable or compostable packaging, eliminate all unnecessary single-use plastic, and help customers to recycle effectively in its shops – all by 2025. Chief executive Clive Schlee tweeted: “We’re making a global commitment to reduce, reuse and recycle as much plastic as possible at Pret. We’ve got a long way to go and I hope this pledge keeps us on track.” Last month, Pret launched a range of reusable bottles to help customers reduce the number of plastic bottles they use. It has also started a plastic bottle deposit and return trial in three Brighton shops. The company is accepting and recycling any plastic bottles taken into the outlets, with a 10p deposit returned when Pret-branded plastic bottles are given back.

Bowling alley entrepreneur to launch second Sedgefield pub: Tim Wilks, the entrepreneur behind boutique bowling alley Lane7 and pubs across north east England and Scotland, is to open his second venue in Sedgefield. Wilks has taken on The Black Lion in High Street, which he will reopen as The Corner House at the end of the month. The pub is over the road from his other venture in the County Durham town – The Pickled Parson. Wilks told The Northern Echo: “We’ve been overwhelmed with the response since we opened the doors to The Pickled Parson late last year. The opportunity to add a new dimension to the pub offerings in the town was too great to turn down.” Wilks operates Lane7 sites in Newcastle, Middlesbrough and Aberdeen and also owns The Fox Hole in Piercebridge, near Darlington.

Brunning & Price reopens former New Moon Pub Company site in Cheshire: Brunning & Price, the Restaurant Group’s gastro-pub arm, has reopened former New Moon Pub Company venue the Lord Binning in Kelsall, Cheshire. The pub in Chester Road has relaunched under its former name, The Morris Dancer, creating 40 jobs. The venue has been transformed to feature open fires and wooden floors, a bar serving malt, gin and local ale, and a kitchen offering classic British dishes. An outside dining area has also been added. When Brunning & Price acquired the pub in December, managing director Mary Willcock said: “It sits within Brunning & Price’s Cheshire heartland, close to what will be its sister pub, the Dysart Arms in Bunbury.” New Moon Pub Company, founded by Dave Mooney and Paul Newman, opened the site in 2011. The company went into administration in 2016, with the Lord Binning taken over by Mooney’s new company, Carwood Catering. However, he took the decision to shut the pub in May last year to concentrate on other projects. The Restaurant Group acquired Brunning & Price for £32m in 2007. It currently has more than 60 sites.

All Star Lanes opens first new-generation concept, in Westfield: Bowling alley business All Star Lanes has opened its first new-generation concept, at Westfield London. The 16,910 square foot boutique bowling venue features two art deco-inspired cocktail lounges, ten bowling lanes, a private events room, and a heated terrace. Several other new-generation sites are due to open in the UK by 2020. The new concept offers leather booths, private karaoke rooms, and restaurants serving US comfort food. The site is part of Westfield London’s £600m expansion and is located beneath the flagship John Lewis store. All Star Lanes managing director Christian Rose said: “The stunning Westfield London venue represents a new chapter for All Star Lanes and will act as the benchmark for several more across the UK before 2020.” Since launching its first venue in Holborn in 2006, All Star Lanes now operates five London sites in total.

Indian street food and cocktail bar concept Zindiya eyes Nottingham: Birmingham-based Indian street food restaurant and cocktail pub concept Zindiya is eyeing a site in Nottingham. Owners Shivani and Ajay Kenth have applied to the city council for a premises licence for a site in Chapel Bar that was formerly occupied by Sinatra. It is understood the unit is under offer to the Kenths but the deal has yet to be completed, reports The Business Desk. The Kenths opened their Birmingham restaurant in January 2017. Last month, they reopened The Saddlers Arms as an Indian gastro-pub in a separate concept to Zindiya. Restaurant and bar Sinatra closed in May last year when the owners forfeited the lease after breaching a tenancy agreement with the council.

Hydes deploys iC analytics to cut energy use and carbon emissions: North west brewer and retailer Hydes has deployed Carbon Statement’s iC analytics platform across its estate to cut energy consumption and carbon emissions. The Hydes On Carbon programme will improve efficiency and engage the family-owned company’s staff to minimise their environmental impact. Cutting energy use will also improve Hydes’ ranking on the Hospitality Carbon Reduction Forum energy benchmark, which measures the efficiency of more than 35 operators in the sector. Hydes chief executive Chris Hopkins said: “We have launched Hydes On Carbon to maximise our resource efficiency through reducing energy use, which is a major controllable cost. We want to support our teams to improve profitability and minimise our environmental impact by providing them with actionable information each week on eliminating energy waste.” Manchester-based Hydes operates about 60 pubs in north west England and North Wales, split evenly between managed and tenanted sites.

Brew York exceeds crowdfunding target to create city’s ‘biggest beer venue’: Brew York has exceeded its target on crowdfunding platform Crowdfunder in a bid to create the “biggest beer venue in the city”. Wayne Smith and Lee Grabham launched their brewery, taproom and events space in Walmgate in 2016 and plan a major expansion into adjacent premises. They have exceeded their £40,000 target and now aim to hit a stretch target of £60,000 by 6am on Friday (4 May). So far, 564 investors have pledged £50,960. Brew York’s plans include trebling brewing capacity, setting up a permanent street food kitchen and bar in the former Jack Raine boxing club, offering the largest on-tap beer range in York with 40 beers available at any one time, launching a “hoptail lounge” serving beer cocktails and hosting masterclasses, and installing a pilot brewery kit for more experimental beers and to allow groups to brew their own beers for events. There would also be a new elevator to make the space fully accessible and a canning machine to improve quality control and increase production.

Ground Espresso Bars adds to Belfast footprint: Ground Espresso Bars, Northern Ireland’s largest independently owned scaled artisan coffee chain, has opened a new site in Belfast. The company has opened the 50-cover venue at the Victoria Square shopping centre. Ground Espresso Bars senior support manager Hannah Houston told Insider Media: “We have wanted to increase our footprint in Belfast for some time and chose Victoria Square as it is Northern Ireland’s premier shopping complex. The coffee scene has taken off in recent years and we’re finding more people prefer our local produce to the big-brand coffee retailers.” Ground Espresso was founded in 2001 and now employs more than 300 staff across 24 stores. In March, it signed a £1m partnership with service station operator The Maxol Group. Lambert Smith Hampton acted on behalf of Victoria Square shopping centre on the deal.

Wrapchic opens Preston site: Fusion fast-food business Wrapchic has opened a site in Preston. Founder Mahesh Raikar has launched the venue in Fishergate shopping centre. Raikar founded Wrapchic in Birmingham in 2012. It now operates 17 sites in the UK and two in Dubai.

Bella Italia launches menu with healthy focus: Casual Dining Group-owned Bella Italia has launched a menu inspired by classic Italian dishes and the rise in popularity of vegetarianism and veganism. The menu, developed by executive chef Vittorio Lettieri, features a new range of gluten-free, vegan, seafood and lower-calorie options. The healthier focus includes trading wheat-based pasta for spiralised vegetable spaghetti and switching regular cheese for vegan cheese on the pizza menu. However, the menu also features a new range of pasta dishes, including wild boar tortelloni. Casual Dining Group chief operating officer James Spragg said: “This latest menu innovation reflects the rise in popularity of healthier alternatives and ethical choices but also demonstrates our commitment to always listen to our customers and the market, and our willingness to adapt. Crucially, we’ll always do this while staying true to our identity and brand DNA, which for us is creating genuine Italian dining experiences to enjoy with friends and family.” In March, Casual Dining Group secured an agreement with Tesco to stock a range of Bella Italia products in 500 stores from September.

ETM Group partners with Australian craft brewer Little Creatures: ETM Group, the 14-strong bar and restaurant company, has partnered with Australian craft brewer Little Creatures to make its pale ale available in sites such as The Jugged Hare in Shoreditch, Aviary rooftop bar, and The Botanist in Sloane Square. The companies will also collaborate on a series of events this year including masterclasses, tastings and food pairings. ETM Group co-founder Ed Martin said: “We are delighted to be working with Little Creatures. The company is founded on many of the same principles as ETM – a commitment to doing things a little differently and sourcing the highest-quality ingredients while maintaining a distinctive, individual and inclusive culture.” Little Creatures sales manager John Hadingham added: “It is a genuinely good fit – two businesses run from other sides of the globe with the same philosophy of providing unique and engaging products for our customers.” Last month, ETM Group secured a £10m funding package to support growth plans. The next site to open will be Maple in Westfield White City this summer, followed by two more this financial year.

Chilango puts faith in power of plants: Mexican brand Chilango has launched a “powered by plants” menu that includes three dishes with fewer than 500 calories. The dishes are roasted sweet potato burrito with barbecue salsa, chilli NON-carne (a meat-free take on the Mexican classic), and sweet barbecue wedges. The five-item menu is completed by a vegan salad and a vegan box that is filled with guacamole, peppers and onions, black beans, salsa, lettuce and coriander-lime rice. The new menu will run alongside Chilango’s regular spring and summer offering, which features a number of dishes with fewer than 550 calories, including low-carb and chicken protein boxes. Chilango co-founder and chief executive Eric Partaker said: “Our guests have been instrumental in helping us develop these new menu additions. We’ve noticed there is a huge focus on eating healthier and more plant-based diets, and we wanted to create something packed with flavour to boot.” Chilango operates ten restaurants in London and one in Manchester.

Stonegate names Heineken as supplier of the year: Stonegate Pub Company has recognised the contribution suppliers make to its success, naming Heineken as its Supplier of the Year. In total, 200 suppliers attended the company’s annual conference at the Royal Horseguards Hotel, London, to hear Stonegate’s executive team share strategy, performance and plans. The company has enjoyed eight consecutive quarters of growth and has expanded from 333 sites to 700 pubs and bars, investing £300m in the past seven years with 78% receiving a capital investment. The company said it had become the biggest operator in the LGBT and late-night sectors, while more than 450 of its venues show sports. Stonegate chairman Ian Payne presented the award to Heineken’s Rob Whittaker and Kate Vicary, who have worked with the pub company to produce “appropriate activity and support across category and brand”. Other award-winners included Red Bull’s Ed Shoebridge and Jamie Morrison (Insight), Sky (Service), Marcus Johnson (Design), and Diageo’s Richard Larkin, James Metcalfe and Melissa Yorke (New Product Development) for creating spaces for pop-ups and temporary events.

Goodbody – ‘too early’ to make changes on Dalata forecasts: Goodbody leisure analyst Rachel Fox has said it is “too early” to make changes on its forecasts for Irish hotel operator Dalata, even though trading is marginally ahead of expectations. Following Dalata’s trading update at its annual general meeting, Fox said: “Trading in the first four months of the year is noted as being a little ahead of company expectations. In Dublin, revpar growth has been marginally ahead of expectations, while regional Ireland is in line with expectations. While market conditions have been weaker in the UK, Dalata continues to outperform the market in terms of revpar growth and performance of the group’s UK properties. The outlook is noted as positive for the first six months of the year. On the development pipeline, its new Belfast hotel (237 rooms) opened in March. In Dublin, its 106 additional rooms at Clayton Hotel Dublin Airport will open in early June, while Kevin St (138 rooms) will open in July. All other extensions and new-builds are on time and on budget. Overall this is a solid statement with a positive outlook for the first half of 2018. We currently forecast FY18 Ebitda of €115m and will not make any changes to numbers at this point. With the strong first-quarter revpar performance in the Dublin market well flagged, we think the market may be disappointed to see no upgrades. However, we would note it is early in the year and strong trading across the key summer months would imply some upside to our forecasts. We would also note it is too early to say what trading will be like in the new hotels due to come onstream in 2018. However, at 12.5 times EV/Ebitda, the valuation looks like it is broadly up with events. We retain our ‘Hold’ recommendation.”

Tennent’s partners with HIT Scotland for scholarship programme: C&C Group brand Tennent’s has partnered with Hospitality Industry Trust (HIT) Scotland to offer students free scholarships. The new programme will be held at Tennent’s Training Academy, with nine students taking part in masterclasses alongside a team of whisky, wine, cocktail and beer experts. Laura Hepburn, training and events manager at Tennent’s Training Academy, said: “One of Tennent’s core values is to give back to the Scottish hospitality industry and we’re happy to be able to facilitate this in partnership with HIT Scotland for the first time. We want to equip our future hospitality leaders with all the training they’ll need to raise the level of service across Scotland.” HIT Scotland chief executive David Cochrane added: “This new five-day course gives our scholars professional training from industry experts in a fantastic setting and allows them to take their skills to the next level.”

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