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Fri 21st Dec 2018 - Propel news round-up
This is the last Propel newsletter of 2018. We would like to take this opportunity to wish our readers a Merry Christmas and a prosperous new year

Story of the Day:

Antic hits back over Unite ‘poverty’ pay claims, looks at how it can increase starting rate: Antic, the Downing-backed London pub operator led by Anthony Thomas, has hit back at trade union Unite over its “poverty” pay claims but said it was looking at how it could sustainably increase its starting rate for staff. Unite held a protest outside Antic pub The Denmark Arms in East Ham this week to coincide with the company’s head office party. Unite called on Antic, which operates 48 pubs, to respond to a collective grievance submitted by more than 100 union members calling for double time on Christmas Eve, Boxing Day, New Year’s Eve and New Year’s Day, saying the company’s offer of time-and-a-half wasn’t enough. Unite claims Antic staff are paid £7.83 an hour – the basic legal minimum rate for over-25s – and are unable to take breaks they are legally entitled to because of a shortage of staff members. Unite regional officer Dave Turnbull said: “Antic workers are no longer willing to sit back and be overworked for poverty pay.” In response, Thomas said: “All our bar staff start on the minimum wage, fairly standard in our industry. However, thereafter our staff see their wages increase based on merit. We are one of the few industries left where a lack of experience or qualifications is no barrier to rapid promotion, which has led to almost two-thirds of our staff being paid above the minimum wage, in many cases significantly so. We also provide a free meal for a standard shift and, subject to there being no stock-loss issues, a free drink at the end of the shift. We are looking at how we can sustainably increase our starting rate. However, with wages being our biggest variable cost after stock, this can only really be achieved at pub level by either increasing sales and thus the profit to pay for it or becoming more efficient so our current pay pot is spread at a higher rate across a smaller staff number. The nature of our industry is we work when our patrons do not, and this includes weekends, late nights and bank holidays, so it is difficult to sustainably treat any of these days differently from each other. On the point about breaks, we comply fully with the law in this regard and generally, with cigarette breaks and the like, we provide more than the statutory requirement.”

Industry News:

Pubs to serve ten million pints and three million dinners on Christmas Day: Pubs are set to serve ten million pints of beer and three million traditional dinners on Christmas Day, according to forecasts by the British Beer and Pub Association (BBPA). Across the festive period as a whole (Christmas Eve to Boxing Day), the BBPA predicts 40 million pints of beer will be sold in Britain’s pubs, a Christmas present worth £150m for pubs. The extra number of pints sold during the festive period will also bring Christmas cheer to the taxman, with tax on beer, in addition to VAT, meaning HMRC could get as much as £22m from pub-goers at Christmas. Across December, increased demand for beer in pubs and supermarkets will see the equivalent of 780 million pints sold – 135 million pints more than the average month. BBPA chief executive Brigid Simmonds said: “Christmas is a busy time for Britain’s pubs and many people see them as a home from home during the festive period. However, the role of the pub at Christmas is far greater than a place to eat and drink. In many ways the pub is the original social network and Christmas is a great chance to use it to reconnect with friends and family. The pub brings the community together and, for those who aren’t so fortunate to be spending Christmas with loved ones, the local will be a great place to soak up the festive cheer and avoid feeling lonely.”

CAMRA appoints new chief executive and deputy: The Campaign for Real Ale (CAMRA) has appointed a new chief executive and deputy chief executive. Tom Stainer, who has worked for CAMRA since 2006, will become the organisation’s chief executive while Ken Owst, who joined as chief support officer and company secretary this year, will become deputy chief executive. CAMRA national chairman Jackie Parker said: “I am delighted Tom and Ken will take up their new roles as 2019 gets under way and am confident they’ll provide strong support for our volunteer leadership and lead our dedicated professional team at head office to build on our campaigning successes.” Stainer added: “I have worked for CAMRA for more than a decade so it’s an organisation I deeply understand and hold a great affection for. It is an incredible and unique organisation entirely as a result of its dedicated and passionate volunteers. My job now is to help our national executive develop the strategy to continue CAMRA’s growth, support our branches and continue to deliver effective campaigning – especially to ensure the Pubs Code is working as intended, to protect pubs from unfair business rates and to ensure tax on beer served in pubs is reduced.” Owst added: “Since arriving at CAMRA it has been apparent all staff are committed and keen to be as effective as possible in supporting our members to organise great festivals and effective campaigns across the country. We need to make sure our systems and staff continue to develop to their full potential so they can give the most effective help to our volunteers across the country.”

European hotel industry reports 5.8% revpar rise in November: The European hotel industry saw growth in all three key performance metrics during November, according to data from STR. Revpar increased 5.8% year-on-year to €75.99, while average daily rate rose 4.0% to €105.84. Occupancy increased 1.7% to 71.8%. Data this month focused on two cities – Istanbul and Vienna. Istanbul hotels posted a record average daily rate, up 47.0% to TRY468.34. The city also saw a huge rise in revpar – 53.2% to TRY323.24 – while occupancy rose 4.2% to 69.0%. The absolute revpar level was the highest for any November in STR’s Istanbul database. STR analysts attributed the jump in the metric to Turkey’s currency crisis of the past few months – October produced the country’s highest inflation rate in 15 years. Demand (room nights sold) has also helped push performance and Turkey is expected to reach almost 39 million visitors by the end of 2018, according to the World Travel & Tourism Council. Vienna saw revpar leap 26.4% to €83.78 and average daily rate increase 12.1% to €101.07. Occupancy rates also saw a significant rise – 12.8% to 82.9%. The occupancy level was the highest for any November on record in Vienna. STR analysts said performance was helped by a host of November events including European Utility Week 2018.

Company News:

Patisserie Holdings appoints new audit committee chairman: Patisserie Holdings has appointed Jeremy Jensen as a non-executive director, while he will also become chairman of the audit committee. Lee Ginsberg steps aside from that role but remains on the board as deputy chairman and non-executive director. Patisserie Holdings stated: “Jeremy is an experienced financial and managerial trouble-shooter with a strong track record of success in rescuing and turning around large complex organisations with multiple stakeholder groups. He is currently director of Stemcor Global Holdings, the world’s largest independent steel trader; Frigoglass SAIC, an ice-cold merchandiser quoted in Athens; and vice-chairman of the Chelsea and Westminster NHS Foundation Trust. Jeremy’s previous experience includes operational roles at Reuters and Cable & Wireless, corporate governance and turnaround roles at McCarthy and Stone, MPG Holdings, NHP Libra, BBC 2 Entertain, and a wide range of other restructurings and special situations.” Earlier this week, Patisserie Holdings appointed RSM as its new auditor as the company contends with a Serious Fraud Office investigation into a £40m “black hole” in its accounts. The discovery of “significant, potentially fraudulent accounting irregularities”, led to its shares being suspended on AIM and the arrest of Chris Marsh, its chief financial officer. He has been placed on bail. Marsh resigned in October, while chief executive Paul May did so last month to be replaced by turnaround specialist Steve Francis.

Fuel Juice Bars to repay critical creditors in full by end of month following CVA, trading profitably in current financial year: Fuel Juice Bars, backed by Kings Park Capital, has revealed critical creditors will be repaid in full by the end of this month following its company voluntary arrangement (CVA) at the start of the year. The company also said it is trading profitably in its current financial year. The details were revealed in its accounts for the period between 1 October 2016 and 31 March 2018 filed at Companies House. Turnover during the 18-month period was £9,084,011, compared with £6,232,895 for the 12 months ended 30 September 2016. Store Ebitda was £1,683,286, compared with £1,888,106 for the previous period. Company Ebitda pre non-recurring costs was £469,897, compared with £1,101,848 the period before. The company had a pre-tax loss for the 18 months of £956,619, compared with a profit of £810,563 the previous period following the restructure. The company shut nine stores, leaving it with 27 at the end of the period. In their report accompanying the accounts, the directors stated: “During the period, the company entered into a CVA with its creditors. This enabled a full restructure of stores in operation and the directors consider this puts the company in a positive position going forward. The net loss for the period before tax was £956,619. This was after net exceptional costs of £859,087, which related to the CVA, costs of store restructuring ¬– which in particular included a £775,382 provision for carrying values of affixed assets relating to stores that have either closed or plan to close post period end – and the full impairment of the investment held in and the loan due by Fuel Juice Bars (England & Wales), which is in liquidation. The terms of the CVA are that critical creditors will be repaid in full for the balance outstanding at 22 December 2017. A total of 50% of this balance was paid in July 2018 and the remainder will be paid before the end of December 2018. Non-critical creditors will receive 5% of the balance owed to them and this was paid in full during the course of 2018. The company is trading profitably in the current year to date as a result of the restructuring and subsequent store closures.”

Black Sheep acquires York Brewery out of administration: Yorkshire-based Black Sheep Brewery has acquired York Brewery out of administration for an undisclosed sum. York Brewery entered administration last week, together with its parent company, Mitchell’s of Lancaster. Black Sheep Brewery has acquired the £2.1m-turnover York Brewery and brands as well as four outlets in the business as part of the deal, transferring in excess of 40 jobs in the process. The pubs are The Last Drop Inn, York; Mr Foley’s Tap House, Leeds; The Tap Room, York; and The Three Legged Mare, York. The acquisition, which was facilitated by joint administrators Steven Muncaster and Sarah Bell, of Duff & Phelps, builds on a positive year for Black Sheep Brewery, which returned to profit in 2018. Chairman Andy Slee said: “This acquisition fits perfectly with our strategy of developing our presence in our Yorkshire heartland and owning pubs. Entering administration was worrying for the team at York Brewery but our deal offers some comfort that its successful brand can be maintained and the pubs can continue to operate. York Brewery complements our strong brands and by acting quickly we have been able to provide a good outcome for both organisations.” Muncaster added: “Despite being a popular destination for locals and tourists, York Brewery unfortunately continued to face cash flow pressures, ultimately resulting in it being placed into administration. However, we’re delighted to have secured a sale for York Brewery, which is especially pleasing so close to Christmas.”

Barburrito strengthens TRG Concessions relationship with Bristol airport opening: Mexican brand Barburrito, which is backed by the BGF, has strengthened its relationship with The Restaurant Group (TRG) Concessions after opening a site at Bristol airport. It is Barburrito’s second outlet in a UK airport and its first in the south west of England. The 420 square foot unit represents a £300,000 investment by TRG Concessions. Barburitto is the second of three brands TRG Concessions has brought or is bringing to the airport. Fresh food-to-go retailer EAT opened this week while TRG’s own Frankie & Benny’s will follow in the spring. Barburrito was launched in 2005 in Piccadilly Gardens, Manchester, by founder and chief executive Morgan Davies and operates 22 sites, including with TRG Concessions at Edinburgh airport. Davies said: “Bristol is a fantastic city and I’m delighted to open at the airport. The response has been great and it is exciting to be building on our relationship with TRG Concessions.” Nick Ayerst, managing director of TRG Concessions, added: “We are thrilled to open our second Barburrito unit, a great brand to add to the portfolio at Bristol airport that will resonate with passengers and provide great grab-and-go and sit-down meal options.” Kate Ridgers, head of commercial development at Bristol airport, said: “Feedback from passengers ranked Mexican cuisine in the top three choices they would most like to see available at Bristol airport.”

The Alchemist secures fourth London site, two more to follow: The Alchemist, which is backed by Palatine Private Equity, has secured its fourth London site – with two more to follow. The company will open the venue at Embassy Gardens as part of the Nine Elms redevelopment. The move will mark the brand’s fourth London venue following Bevis Marks, St Martin’s Lane and a scheduled opening in Old Street in May. A further two sites are expected to be announced early next year. Following a £1.4m investment, the Embassy Gardens venue will open in September, creating 70 jobs. The bar and restaurant will span 5,200 square feet and offer 105 covers and 78 outside. Managing director Simon Potts said: “We are delighted with the new site and excited to be part of the developing community at Nine Elms. There is huge rejuvenation under way, from Vauxhall to Battersea Power Station, as evidenced by the extension to the Northern Line. We are fully committed to ongoing investment in the capital, where we continue to see great trade and growth in our much-loved venue at Bevis Marks as well as a brilliant start to life in the West End in St Martin’s Lane. We have a talented operations support team based in London and see opportunities to continue the brand’s evolution in the city.”

200 Degrees secures eighth site, in Lincoln: Nottingham-based coffee roaster and retailer 200 Degrees has secured its eighth site, in Lincoln. The company will open the outlet in Sincil Street in late February as part of the £12m Cornhill Quarter retail and leisure scheme. The 90-seat site, which will also feature the company’s first courtyard, will host 200 Degrees’ fifth barista school, which will overlook the coffee shop below. Co-founder Rob Darby said: “Lincoln is a great city steeped in history with beautiful architecture. It’s the kind of place where 200 Degrees works best and Lincoln seems to be going from strength to strength. We’ve been looking here for more than two years. We’d love some more places in the Midlands and further afield.” 200 Degrees operates two outlets in Nottingham and one each in Birmingham, Cardiff, Leeds, Leicester and Sheffield. In December last year, 200 Degrees received a £3m investment from Foresight Group. Darby told Propel at the time the funds would allow the company to expand to between 20 and 25 sites during the next three to five years as well as develop the wholesale side of the business.

Thirsty starts expansion with second Cambridge site: Cambridge-based craft beer and wine concept Thirsty has acquired its second site. The company has bought the leasehold of sandwich bar and coffee The Urban Shed in King Street in a deal brokered by agents Everard Cole. Thirsty will launch the site as Thirsty and Hungry – a cafe, bottle shop and bar that is expected to open in January. The company operates a bar and bottle shop in Chesterton Road, seasonal garden pop-up events such as Wintergarten, and collaborates with food trucks from around the area. The Urban Shed had traded in King Street since 2013.

Odeon relaunches flagship Leicester Square cinema following multimillion-pound revamp: Cinema operator Odeon has relaunched its flagship Luxe venue in Leicester Square, London, following a multimillion-pound revamp. The art-deco cinema, which opened in 1937, was shut for 11 months for the renovation. The main six-metre screen was upgraded to Dolby Cinema, which has different speakers for different sounds and dual-laser projection to generate deeper blacks and richer colour. There are more than 400 speakers dotted around the auditorium combined with “powered recliner” seats at all five screens. In the main screen the number of seats has been halved but leg room has almost tripled. A “mirror wall” with digital screens will show footage of classic premieres while the building’s vintage features, including the historic Compton organ, have been restored. The new Oscar’s Bar, named after the chain’s founder Oscar Deutsch, offers views across Leicester Square. Odeon UK and Ireland managing director Carol Welch said: “As one of the most iconic cinemas in the world, Odeon Luxe Leicester Square remains a beacon of Hollywood glamour and our refurbishment takes this prestigious reputation to the next level.”

Fife music hall that hosted Bowie and The Clash transformed into restaurant: A Fife music hall that hosted gigs by David Bowie, Elton John and The Clash has been given a new lease of life as a restaurant. The Kinema in Dunfermline was converted from a cinema to a ballroom in 1938 and earned a reputation as one of Scotland’s most important live music venues. Famously, one of its former managers turned down a booking for an up-and-coming band from Liverpool – The Beatles. After lying empty for almost a decade, the Carnegie Drive building has undergone a major refurbishment and opened as Kinema Restaurant offering buffet-style dishes from around the globe, with chefs working at live cooking stations. Owner-operator Yanli Zhao told The Courier: “The Kinema has a superb and rich history. Over the decades, tens of thousands would have come through its doors to see the likes of The Who, The Clash and Iron Maiden. All of us at the Kinema are very proud to be writing this iconic building’s next chapter.”

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