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Fri 25th Jan 2019 - Fuller’s sells beer business to Asahi for £250m
Fuller’s sells beer business to Asahi for £250m: Fuller’s has entered into an agreement for the sale of its entire beer business to Asahi Europe Limited for an enterprise value of £250 million on a debt free, cash free basis. The business being sold comprises the entirety of Fuller’s beer, cider and soft drinks brewing and production, wine wholesaling, as well as the distribution thereof, and also includes the Griffin Brewery, Cornish Orchards, Dark Star Brewing and Nectar Imports. Under the terms of the proposed disposal, AEL will acquire the brands of the beer business (including “London Pride”) and will receive the benefit of a licence, on a perpetual, global, exclusive and royalty-free basis, to use certain trade marks (including the “Fuller’s” name, logo and cartouche) for the provision of beverages. Ownership of the licensed trade marks will be retained by Fuller’s. The company stated: “Having carefully considered its options for the beer business and Fuller’s existing relationship with Asahi, the board believes that Asahi is the ideal owner of the beer business and will create the right environment for the beer business to flourish in the future and protect the Fuller’s brewing heritage. The board welcomes the fact that Asahi also upholds Fuller’s key values of a genuine commitment to brewing excellence and has a proven track record as a long-term steward of iconic brands making them an ideal strategic partner to the Fuller’s pubs and hotels business in the future. Following completion of the proposed disposal, Fuller’s will be a focused, premium pub and hotel operator pursuing its previously stated strategy of running a stylish, high quality estate, with well-located, well-invested, predominantly freehold sites that are maintained to the high standards that customers have come to expect. Fuller’s will form a strategic alliance with Asahi that will ensure continued access to the high quality premium beer brands Fuller’s has always brewed. The sale of the Fuller’s beer business for an enterprise value of £250 million, representing a multiple of 23.6x Ebitda (of £10.6 million for the 52 weeks ending 31 March 2018). A strategic alliance between Fuller’s and Asahi, supported by a long-term supply agreement, will allow Fuller’s to continue providing a high quality beer and cider offering to its customers. Net cash proceeds of the proposed disposal are expected to be approximately £205 million at completion, taking into account adjustments and after estimated transaction, reorganisation and separation costs.” Simon Emeny, chief executive of Fuller’s, said: “This deal secures the future of both parts of our business including protecting the heritage of the Griffin Brewery in Chiswick, which was particularly important to the Fuller’s board. We remain incredibly proud of the Fuller’s beer business, its history and the high quality premium beer and cider portfolio that we have developed. Brewing has formed an integral part of our history and brand identity, however the core of Fuller’s and the driver of our future growth is now our premium pubs and hotels business. I am delighted that this transaction maintains Fuller’s long association with the beer business and that we will continue to enjoy a strong relationship with Asahi as a key supplier. We look forward to continuing our alliance and developing a mutually beneficial partnership that will see both businesses flourish in the future. Asahi, as a company recognised for brewing excellence, is an appropriate custodian of our rich brewing history and the Griffin Brewery, and will ensure the Fuller’s beer business brands will reach an even wider global audience.” Akiyoshi Koji, chief executive of Asahi Group Holdings, added: “We have long admired the brewing business and exceptional beer brands that Fuller’s has built over the years and the high degree of respect it commands throughout the global beer industry. Fuller’s is one of the few brewers that show the same genuine commitment to brewing excellence and quality that we do. We strongly believe that the brands of the beer business, including London Pride, Frontier and Cornish Orchards among others, complement our premium portfolio in the UK market. In particular, London Pride is a fantastic brand with an illustrious heritage dating back to the 1950s and we are excited about its untapped international potential which Asahi has the scale and global network to unlock.”

Patisserie Valerie chief executive Steve Francis claims collapse is a ‘bittersweet time’: Patisserie Valerie chief executive Steve Francis has described the administration of the company as ‘a bittersweet time’. He stated: “Whilst the news of administration is inescapable and the personal devastation of losing hundreds of dedicated employees is overwhelming for all involved, it sounds bizarre but it’s genuinely a positive development for the remaining business. I would rather have 2,000 fully employed staff than 3,000 with no future. We have an exciting plan moving forward which was developed over the last month (that) has already kick-started over the last two weeks, with a new management team, extended opening hours, new menus across the estate and the development of a loyalty app. Whilst the estate is now smaller and more profitable, we have a strong portfolio of 121 Patisserie Valerie stores that are all open and trading as usual, offering our normal high standards of service and lovingly handmade treats. The company is very grateful for the support from our loyal customers and we are all excited to continue greeting them in store and are encouraged by the strong sales from trading this week.” Chris Boxall, co-founder of Fundamental Asset Management, told the Daily Mail: “Almost 1,000 people have lost their jobs, shareholders have lost hundreds of millions of pounds, (I) don’t see how you can put a positive slant on this, especially as nothing is certain at the moment. He (Francis) is a absolute moron. He’s been selected by a chairman who is clearly of a similar groupthink.” Meanwhile, the FT has reported that the company wants a rebate for corporation tax on profits that may not have existed – it paid £16m to HM Revenue & Customs over the past five years. Meanwhile, The Times has reported HM Revenue & Customs raised concerns with Patisserie Valerie’s parent company that some of its invoices and cheques had been forged more than two years before the café chain revealed an alleged fraud that led to its collapse. The newspaper stated: “The tax authority sent letters to Patisserie Holdings in 2016 questioning the authenticity of documents submitted as part of its tax return. The correspondence between HMRC and the company raises more questions about why the gap in the accounts was not revealed before October 2018. It also raises questions as to whether the tax authority alerted the Serious Fraud Office to its concerns over the possible forgery of documents. HMRC is believed to have begun sending queries about the possible forgery in 2016. Its questioning carried on into last year, when it issued a winding-up petition for £1.14 million against Stonebeach, one of Patisserie Holdings’ subsidiaries.”

Starbucks reports 4% like-for-like sales growth in Quarter One: Starbucks reported better than expected results for its First Quarter to 31 December 2018 with earnings-per-share of 75 cents, beating analysts’ estimates of 65 cents. Revenue for the quarter came in at $6.6 billion, surpassing forecasts of $6.49 billion. Global like-for-like sales growth was 4%, with the US up 4%, China’s up 1% and the rest of the world, including the UK, up 2%. Starbucks Rewards loyalty program grew to 16.3 million active members in the US, up 14% year-over-year. “We are particularly pleased with the sequential improvement in quarterly comparable store transactions in the US, underpinned by our digital initiatives and improved execution of our in-store experience. Comprehensive efforts to streamline our business have allowed us to focus on three key strategic initiatives that position Starbucks for long-term success: accelerating growth in our targeted markets of the US and China, expanding the global reach of the Starbucks brand through our Global Coffee Alliance with Nestlé, and increasing shareholder returns. Combined with our efforts to build and amplify the Starbucks brand, we expect these initiatives will position the company to drive predictable, sustainable growth and shareholder returns for years to come. With this solid start to the fiscal year, we are on track to deliver on our full-year commitments,” chief executive Kevin Johnson said. Shares of the coffee company were last trading up about 2% in the after-hours session. During the quarter, Starbucks opened 541 new stores, bringing the total to 29,865 worldwide.

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