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Fri 9th Nov 2018 - Update: GBK creditors approve CVA, Asda to expand pizza delivery with Just Eat et al
Gourmet Burger Kitchen creditors approve CVA: Creditors of Gourmet Burger Kitchen have “overwhelmingly” approved its company voluntary arrangement (CVA). The company, owned by South African-based Famous Brands, put forward proposals to restructure its UK restaurant estate last month as part of an ongoing plan to turnaround the business. Famous Brands, which acquired Gourmet Burger Kitchen in 2016 for £120m, originally initiated the process with help from advisers at Grant Thornton. Under the terms of the CVA, 17 restaurants are set to close, which would affect 250 staff. However, it is understood Gourmet Burger Kitchen will try to relocate as many staff members as possible to its other 68 sites, which remain unaffected. Managing director Derrian Nadauld said: “We would like to thank the landlord community, our trade suppliers and our restaurant teams for their support through a challenging process. With the positive vote on our proposal to restructure our property portfolio, we are now able to execute the final stage of our turnaround plan, which we are confident will position the business for long-term sustainable growth.” The company made an operating loss of £2.6m in the six months to 31 August, with like-for-like sales down 10.6%. Famous Brands first cautioned in August it was considering strategic options for one of its subsidiaries and announced last month it would recognise a pre-tax impairment of 874 million rand (£46m) in its group accounts relating to Gourmet Burger Kitchen. The brand had suffered from “continued adverse trading conditions and sustained underperformance”, Famous Brands said.

Asda to expand pizza delivery trial with Just Eat: Asda is to expand its trial of a pizza delivery service in partnership with online food ordering platform Just Eat. Following a month-long pilot at Asda’s Killingbeck store in Leeds, the service will be rolled out to stores in Beeston, Wakefield and Livingston on Monday, 19 November with further sites to follow if the trial proves a success, the companies said. The initiative sees customers place orders through the Just Eat app, with the 16-inch pizzas prepared at in-store diner Asda Kitchen and delivered to homes within a two-mile radius. The delivery service is offered from 12.30pm onwards but pizzas are available outside hours to customers who choose to eat in-store or take away. Asda is set to be ultra-competitive on price, with its pizzas costing £6, while there is a £15 meal deal that includes any pizza, four sides, a drink, dessert and dip. A Just Eat spokeswoman said: “We have partnered with Asda on a localised trial for takeaway delivery in Leeds. This is part of our mission to offer customers the widest choice possible and we will continue to assess the results to determine whether we can expand our partnership further.” Last year Sainsbury’s trialled a pre-ordering service at three stores and introduced an in-store Zizzi concession while Morrisons hosts an Indian takeaway restaurant at its Bradford Victoria store that also works with Just Eat. Last month, Asda opened its first sushi counter, at its revamped Patchway Supercentre in Bristol. The counter is operated by Sushi Daily, which also works with Waitrose.

Fuller’s chief chats sector issues with chancellor during brewery visit: Simon Emeny, chief executive of London brewer and retailer Fuller’s, has discussed the issues the sector faces first-hand with chancellor Philip Hammond during his visit to the company’s headquarters. Hammond visited the brewery in Chiswick in advance of announcing the third-quarter GDP results. He was accompanied by British Beer & Pub Association (BBPA) chief executive Brigid Simmonds, who highlighted the contribution the beer and pub sector makes to the UK economy. The chancellor was also thanked for supporting the industry in the Budget – his decision to freeze beer duty will save brewers, pubs and pub-goers £110m. In addition, Hammond’s announcement of a cut to business rates for high street and other small businesses by a third will benefit community pubs by £120m during the next two years. Increasing the investment allowance to £1m and capital allowances for new-builds is a further boost to the sector. Emeny, who is also BBPA chairman, said: “We were delighted to welcome the chancellor and thank him in person for the recent duty freeze. It was also a great opportunity to discuss some of the other issues that have an impact on a business such as Fuller’s, including business rates and the importance of access to a talented pool of people.” Simmonds added: “Clearly the chancellor listened to the numerous representations from MPs and the 117,000 British pub-goers spurred by the Long Live The Local campaign and announced a Budget that supports brewing and pubs.” Hammond said: “The success story of British brewing was clear to see from my visit to Fuller’s. Pubs are at the heart of so many of our communities and play a vital role in the UK economy.”

Pension fund investor buys freehold of West End pub let to Shepherd Neame for £3.75m: The freehold investment of The Cheshire Cheese pub in London’s West End has been sold to a pension fund investor for £3.75m. The sale price for the five-story property in Little Essex Street reflects a net initial yield of 3.25%. Agents AG&G acted for the private vendor. It is the second investment deal AG&G has conducted for the client by firstly lining up a tenant, in this case Kent brewer and operator Shepherd Neame, and then finding a buyer to purchase the freehold investment. The other was the Simmons Bar in Covent Garden, which sold late last year for £3.8m. AG&G said it has a third freehold investment disposal in the pipeline on behalf of this vendor, which is due to complete shortly. On all three occasions, AG&G has lined up a suitable tenant before marketing the freehold subject to lease. The company also recently oversaw completion of a £6m sale and leaseback in Shoreditch, which reflected a net initial yield of 3.28%, taking its total freehold investment disposals in the past quarter to about £30m from seven transactions. AG&G director Michael Penfold said: “We are delighted to have helped the vendor by identifying a suitable tenant in Shepherd Neame, which has maximised the investment value. The net initial yield of 3.25% demonstrates the continued demand in the investment market for freehold assets in London with a long-standing history as a pub. Investors increasingly view pubs as a reliable investment with retail and restaurants coming under scrutiny following a number of high-profile company voluntary arrangements in the past 18 months. This is underpinned by strong occupational demand for pubs and bars in London, with rents and premiums demonstrative of this appetite.”

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