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Wed 24th Oct 2018 - Update: McDonald's, Patisserie Valerie, Livelyhood, Heineken
Easterbrook – McDonald’s UK saw highest ever sales in Third Quarter, delivery now 10% of sales at delivery sites: McDonald’s has reported that its UK business delivered the highest monthly sales and guest count volumes in its 44 year history in its Third Quarter, resulting in 50 quarters of consecutive like-for-like sales growth in the UK. Chief executive Steve Easterbrook reported delivery now accounts for as much as 10% of sales at restaurants in the UK offering delivery. He said: “Delivery is becoming an increasingly leading contributor to comparable sales. And in several top markets, such as the UK, Australia and France, delivery now represents as much as 10% of sales at restaurants offering delivery. We are working to encourage existing delivery customers to order more regularly, as we also strive to raise awareness of this convenience option. Customer satisfaction with McDelivery remains high. Once customers experience the convenience, many of them become our most loyal customers and are frequently re-ordering delivery. The delivery market is evolving rapidly and we are committed to innovating. We are seeing improved speed and accuracy after a completing an initiative earlier this year to integrate delivery orders into our point of sale systems in many of our restaurants. We are exploring additional innovation opportunities ranging from integrating delivery orders from our app and new packaging that protect the quality of our food. Underpinning everything we do with this growth accelerator is about commitment to making delivery easy and convenient for our customers, which will help us maximize the competitive advantage within our business.”

FT reports mystery of unexplained share options at Patisserie Valerie: The Financial Times has reported that Patisserie Valerie chief executive Paul May and suspended finance director Chris Marsh seem to have cashed in share options not announced in the company’s annual report or elsewhere. The newspaper stated: “Under parent company Patisserie Holdings’ 2014 long-term incentive plan (LTIP), Messrs May and Marsh had been entitled to exercise options on the company’s shares if its earnings growth outstripped the retail price index by 18% or more over three years. Patisserie Holding’s reported earnings appeared to do this, enabling the directors to buy shares and immediately sell them for a profit. However, a more sharp-eyed than sweet-toothed Financial Times reader noticed that each seemed to sell their full entitlement of LTIP shares twice. Patisserie Holdings 2017 annual report stated that, under the 2014 LTIP, Mr May held 1,000,000 share options and Mr Marsh 666,666, all with an exercise price of 170p. As at September 30 2017, none had been exercised and no more granted. On February 2 2018, the Stock Exchange Regulatory News Service reported that Patisserie Holdings had issued 666,666 shares to Mr Marsh under his LTIP at an exercise price of 170p per share, which he sold at 360p – making a £1.27m profit. Then, on February 7, RNS reported that the group had issued Mr May his 1,000,000 shares at 170p, which he sold at 330p, making a £1.60m profit. Six months later, though, come two further inexplicable RNS announcements. On July 20 2018, Patisserie Holdings said it had issued another 666,666 shares “following the exercise of share options under the LTIP by Chris Marsh” at a different exercise price of 316p, which he sold at 418p, making an extra £680,000. On the same day, it said it also issued Mr May with another 1,000,000 shares at the new price of 316p, which he sold at 418p as well, making an extra £1.02m. But, as the FT’s retail correspondent Jonathan Eley, and our diligent reader, have pointed out, Patisserie Holdings only ever disclosed one grant of LTIP share options in the 2017 annual report, with a 170p exercise price. There is no mention in its announcements or accounts of a second grant or tranche. Patisserie Holdings did operate an additional employee share option scheme – but this had a 199p exercise price and the RNS. The newspaper added: “There may be a perfectly good explanation for the directors having their cake and eating it. It is just hard to understand why there is no trail of crumbs for shareholders to follow.”

Pub group Livelyhood reports best financial year to date: Livelyhood, the five-strong, independent South London pub group, has announced its best performing year to date. The year ending 31 July 2018 saw the group, owned by Sarah Wall, implement significant investment in current sites and one new opening along with plans for further expansion in the coming year. Group turnover increased by £1,338,988, up 29.35%, with total turnover for last year at £5.9M (£385,787 from new venue). The profitability of the business grew by 30% year on year. In May 2018, The Clapham North (Clapham), The Regent (Balham), The Old Frizzle (Wimbledon) and the Mere Scribbler (Streatham) were joined by new venue The Faber Fox in Crystal Palace,which is trading very successfully. Livelyhood has, with this new site, increased its overall venue size by 3,500 square foot and now employs an additional 30 people. The Clapham North underwent a refurbishment of the whole ground floor as well as the introduction of private events space and pop-up venue, The Treehouse, and a £100k refurbishment of The Old Frizzle in Wimbledon is planned for 2019. The Faber Fox in Crystal Palace opened in May 2018 with two further openings planned for the 2018/2019 financial year (site details are to be announced). Sarah Wall, Livelyhood founder, comments: “This has been a significant and transformational year for Livelyhood. We gave a new lease of life to one of our much-loved current sites, The Clapham North, and have opened a new venue in Crystal Palace that is performing above and beyond our expectations. We look forward  to continued growth with two new openings and a further refurbishment in the current year.” 

Heineken reports strong Third Quarter: Heineken has reported beer volumes were up by ‘mid-single digit levels in its Third Quarter. Jean-François van Boxmeer, chairman of the executive board and chief executive, said: “Volume growth continued in the third quarter, benefiting from good weather in Europe and strong growth in Brazil, Mexico, Vietnam and South Africa. The Heineken brand continued to outperform, driven by Brazil, South Africa, France and Russia. In August, we announced the signing of non-binding agreements with China Resources to join forces to win in China. Our expectations for the full year 2018 remain unchanged.”

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