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Wed 23rd May 2018 - Update: The Restaurant Group update, Easyhotel, Costa, Britvic and Brakspear
The Restaurant Group reports like-for-likes down 1.8% in most recent seven weeks: The Restaurant Group has reported an improving sales performance with like-for-likes down 1.8% in the first seven weeks of the Second Quarter. The Restaurant Group holds its AGM today. Debbie Hewitt, chairman, will provide the following trading update: “Our strategic initiatives are driving improved performance in our Leisure business in a market in which like-for-like sales remain challenging. Like-for-like sales for the 20 weeks ended 20 May 2018 declined 4.3% and total sales declined 3.1%. Trading in the period was heavily impacted by the adverse weather and on an underlying basis, excluding the impact of snow, like-for-like sales were down 3.1%. In the first seven weeks of the second quarter like-for-like sales declined 1.8% as we began to lap the significant price investments made last year in order to re-establish our value credentials in our Leisure business. Our pubs and concessions businesses continue to outperform the market. During the first 20 weeks we have opened nine new units. The pipeline of new openings within our Pubs business has been further strengthened with the acquisition of four pubs from Ribble Valley Inns. Including these we now expect to open around ten pubs this year. Strong progress has been made in our concessions business with expansion into new travel hubs. We now expect to open at least 12 new concession sites this year. We have successfully exited a further five closed sites in 2018 bringing the number of sites exited to 26 out of 41 closed sites. We are comfortable with the performance in the first 20 weeks of the current financial year and expect to see further benefit from our strategic initiatives as the year progresses. We expect to deliver results for the full year in-line with current market expectations.”

Easyhotel reports turnover and profit boost: Easyhotel, the owner, developer and operator of super budget branded hotels, has reported sales rose 33.6% to £16.1m in the six months to 31 March 2018. Profit before tax was up 52.5% to £900,000. Chief executive Guy Parsons said: “Easyhotel delivered another strong performance in the first half of our financial year, growing market share in every market in which it operates. The group’s successful £50 million fundraising is already fuelling further expansion and since the placing completed in March 2018 we have been delighted to announce further additions to our development pipeline with new sites acquired in Cambridge and Chester. As has been widely reported, industry data points to more challenging trading conditions in the overall UK hotel market whilst the European market continues to perform well. Our growing portfolio of European hotels are trading strongly. Whilst we remain mindful of UK consumer sentiment we believe our super budget offer is appropriately aligned to the needs of discerning and value conscious customers. Group trading remains in line with our expectations and we expect the brand to continue to outperform the market. Easyhotel now has a growing network of stylish hotels, a strengthening brand, a talented team and strong, asset-backed balance sheet with significant headroom to fund further investment. We will continue to seize opportunities in our UK, European and international markets, balancing our owned hotel development between UK and European assets to create value for our shareholders and underpin the long-term growth of the Easyhotel brand.”
Hollywood Bowl reports rise in sale and PBT: Ten pin bowling company has reported sales rose 9.3% to £63.6m in the six months to 31 March 2018. Profit before tax was up 17.4% to £14.6m. Chief executive Stephen Burns said: “Hollywood Bowl has produced another strong financial performance this period due to our continued progress in delivering against our strategic goals; the acquisition and opening of new centres that complement our already very high quality portfolio, creating modern, family friendly entertainment environments, and our refurbishment programme which has continued to drive organic like-for-like growth through the constant evolution of our customer experience. This customer focus, combined with our disciplined capital and cost management, gives us confidence in delivering another year of progress, and reporting results in line with board expectations.”

Private equity firms eye Costa acquisition: Costa Coffee is being eyed by a number of private equity firms with a view to taking the business private. Costa’s owner, Whitbread, which plans to demerge the brand from the group and list it as a separate entity, has been approached informally over a potential buyout. Those thought to be considering a move on Costa include heavyweight private equity groups Bain Capital, CVC and TPG. Whitbread is pressing ahead with plans to hive off Costa in a separate listing on the London Stock Exchange. But a private bid for the group, which is valued at between £2 billion and £3 billion, would have to be considered by the board. Whitbread will remain the owner and operator of the hotels group Premier Inn following the split. The company’s shares jumped yesterday as news of the potential bidding war emerged, rising nearly 1.2%, or 49p, to 4233p. Costa, which Whitbread acquired in 1995 from founders Sergio and Bruno Costa, has more than 2,400 outlets and has been embarking on an overseas expansion. 
Britvic reports strong First Half: Britvic has reported sakes rose 4.5% to £733.2m in the 28 weeks ended 15 April. Profit after tax decreased 13.7% to £33.3m, including £21.6m of planned business capability programme costs. It reported strong growth in Q2, overcoming poor weather in GB, Ireland and France, and absorbing Palmer & Harvey bad debt provision of £3.3m. Chief executive Simon Litherland said: “We have delivered a strong first half performance with solid revenue, margin and earnings growth. We have also made good progress in innovating to meet consumer needs, growing our international presence and transforming our supply chain. While it is too soon to guide on the ongoing consumer impact of the soft drinks levy, early indications of the competitor and customer response are broadly as we anticipated. We have exciting commercial plans in place for the second half and I remain confident of continuing to make progress this year.” Of the UK market, Litherland added: “The GB soft drinks market, as measured by Nielsen, has grown again this year, with value growth of 2.0%. We have achieved both average realised price (ARP) and volume growth through innovation, disciplined revenue management and the popularity of our low and no-sugar brands. This resulted in GB revenue growth of 4.6% and we have gained both volume and value market share. In the carbonates category, our long-term focus on our low and no sugar brands has resulted in strong growth across the portfolio. Pepsi has continued to grow volume and value market share, with no-sugar MAX significantly outgrowing all other cola variants. Revenues also increased for 7UP, Tango and our natural energy brand Purdey’s. Robinsons returned to volume, revenue and market share growth in Q2, as the recent innovation launches, Creations and Cordials, rolled out across Grocery. This resulted in overall Robinsons revenue growth in the first half and moderated the rate of decline in overall stills. Last year we launched Robinsons Refresh’d, a ready-to-drink format, which was the number one soft drinks innovation in 2017. Fruit Shoot Hydro continued to perform well, though the overall Fruit Shoot brand declined in both volume and ARP in a highly competitive category. We recently introduced a new, all-natural variant, Fruit Shoot Juiced, which has schools’ compliance accreditation. J20 revenue fell, as changes to promotional price points last year resulted in a reduction of in-store feature & display and a corresponding volume decline. However, exciting new J20 advertising and improved in-store execution begins in the third quarter. The strong performance in GB demonstrates the resilience of our business as it was delivered despite the extreme winter weather, the administration of Palmer & Harvey and the break-up of Conviviality. The strength and breadth of our brand portfolio and excellence in execution has resulted in new business wins, such as Cineworld. Our interim results only include one week of sales data following the introduction of the Soft Drinks Industry Levy (SDIL), so it remains too soon to judge the consumer response and therefore guide on the ongoing impact. However, we have worked closely with customers ahead of the levy introduction to ensure soft drinks shelf and feature space is maintained. We are beginning to see an increased focus on low and no sugar brands, where Britvic has an advantaged portfolio, due to our long-standing reformulation and innovation programme. Recent competitor reformulation and promotional strategy appears, at this stage, to be broadly as we anticipated.”

Brakspear re-opens Bicester pub with 13 new bedrooms: Pub operator and brewer Brakspear is relaunching its managed pub The Lion at Wendlebury, near Bicester, with the completion of 13 new bedrooms, a refurbishment of the main bar and a new general manager to drive the business forward. Brakspear bought The Lion in November last year, adding it to its growing managed division, which now numbers 12 sites. The bedrooms are housed in a Cotswold stone cottage attached to the main building and have been designed to offer maximum comfort while retaining the historical character of the pub, which dates back to the 18th century. Brakspear’s managed estate now comprises 12 pubs. The division was formed in 2013 with the opening of the Bull on Bell Street in Henley-on-Thames and includes pubs across the Cotswolds and south east, with the Frogmill near Cheltenham announced earlier this month as its newest addition. With the addition of the bedrooms at the Lion, eight of the sites now offer accommodation, with a total of around 115 rooms.

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