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Morning Briefing for pub, restaurant and food wervice operators

Thu 21st Feb 2019 - Propel Thursday News Briefing

Story of the Day:

Just Eat UK boss – new food hygiene programme about ‘driving up standards across takeaway industry’ but success down to operators: Graham Corfield, UK managing director of online food delivery business Just Eat, has told Propel its £1m food hygiene and safety improvement programme for restaurants is about “driving up standards across the takeaway industry” but warned its success was down to operators. The initiative will provide a bespoke improvement plan for any restaurant with a Food Standards Agency (FSA) rating of two stars or below, delivered by global food safety consultant NSF. All zero-rated restaurants will be removed from the platform, while any new restaurant wanting to sign up will have to have a minimum of three stars or be registered and awaiting inspection by a local authority. Corfield told Propel the work would start with the zero-rated restaurants, which he said make up less than 1% of the 30,000 outlets in Britain on its platform, before moving to one and two star-rated operators. The package of support will include a one-to-one visit from an expert food safety practitioner, an action plan on how to make improvements, access to resources, and guidance on how to request a re-inspection from a local authority to gain a new rating. Zero-rated restaurants will also be offered additional follow-up support and any that do not improve their score by 1 May will be removed from the Just Eat platform until they do so. Corfield said: “This is an evolution of the work we have always done with our restaurant partners to help them be better businesses. We have always educated them on standards but this is about taking it a step further as we try to drive standards in the sector. There is so much public awareness around food safety and hygiene ratings, while the FSA will make displaying ratings compulsory across the UK at some point. I talk to restaurants every day and know they are having a tough time and, with Brexit, who knows if that will get worse. With consumers looking more at food hygiene ratings when it comes to choosing where they want to eat, we want to help restaurants be that choice.” In terms of a time-scale of getting all restaurants on its platform to at least three stars, Corfield said: “The vast majority are at least three stars and we would like to do this at pace. However, ultimately it’s up to the restaurants to take advantage of the opportunity. Those that don’t will suffer because consumers will simply go elsewhere. Therefore it’s in their interest to get their rating as high as possible.” Corfield acknowledged there could be problems over the time it takes for a local authority to make a re-inspection given resources but added: “We will work with NSF in every way we can to make sure a local authority carries out re-inspections as quickly as possible. For the zero-rated restaurants that have clearly made improvements but are awaiting re-inspection by our 1 May deadline, we can potentially give them an ‘awaiting inspection’ rating. As well as hygiene ratings, we encourage people to leave reviews so potential customers have an idea about the quality of restaurant they are eating from.”

Industry News:

Social Strategy In A Day open for bookings: Social Strategy In A Day, an event aimed at allowing companies to develop and hone their social media strategy, has launched and is open for bookings. The event features all-new content and insights to allow companies to increase brand exposure, broaden their reach and ensure their digital marketing really delivers. Propel has partnered with digital marketing company Digital Blonde for the one-day advanced workshop, which will cover everything a marketing department should be thinking about when it comes to social strategy. The event takes place on Thursday, 4 April at One Moorgate Place in London. Insights will include how to drive business via social media; which social media activity works best for each generation; the key to successful storytelling; and the latest findings in consumer psychology and how they can benefit your social media communications. There will also be tips on how to improve your food and drink photography and rebuild trust on social media in the wake of fake news, alongside insights on key apps, how to make the most of Instagram and Facebook, and how to make your social spend count. Those who book tickets can submit questions ahead of the event for the Digital Blonde team to answer in special “20 questions in 20 minutes” sessions. Tickets are £295 plus VAT for Propel Premium members and £345 plus VAT for non-members and can be booked by emailing

Propel insights editor Mark Wingett to give his views on deals that could happen in the sector: Propel insights editor Mark Wingett will give his views on the M&A activity that could happen in the sector as part of his next article for Premium subscribers, which will be sent out on Friday (22 February). He will also continue his outline of what he believes lies ahead for the sector’s big pub operators and look at the curious case of the Wasabi investment process. Propel Premium subscribers will also receive a 30-minute video on Friday featuring Ei Group chief executive Simon Townsend talking about how the company was galvanised to meet the challenges of a completely new business model. Propel Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out, access to our database of 1,300 multi-site companies, discounts to attend Propel conferences and events, and regular video recordings of key speakers from Propel events and conferences. An annual premium subscription costs £345 plus VAT for operators and £445 plus VAT for suppliers – plus £50 each for additional team members. Email

Trade bodies back government vision on sustainable future for the high street: Sector trade bodies have said the recommendations of a new report, which include reforming business rates, set a “positive vision for an evolved and sustainable future for the high street”. A report by the Housing, Communities and Local Government Select Committee following its inquiry into high streets and town centres has identified the hospitality sector as crucial to their health and success. The recommendations include introducing an online sales tax, the receipts of which would offset business rates bills; a “holiday” for high-street retailers from rates increases resulting from investment or improvements in a property; and a reduction in business rates for retailers in high streets and town centres, which would have the additional effect of balancing competition from out-of-town shopping centres. Further proposals regarding planning and government support for the high street have also been welcomed. UKHospitality chief executive Kate Nicholls said: “The report gives due recognition to how crucial the sector is to the high street as it moves away from the shopping focus of the past. Policies to drive growth and regenerate high streets must have hospitality at their core and this needs to be recognised by the government and local authorities. In the absence of the government’s promised full of review of business rates, this represents the most radical assessment of the state of the rates regime. This is a great starting point for opening up the conversation and beginning to address an issue that has crippled many high-street businesses, not least in hospitality. Many businesses are also penalised by a rates hike having made a significant financial investment into their property. A tax holiday would be a good way to remove this disincentive to invest, although the 12-month limit is not long enough.” British Beer & Pub Association chief executive Brigid Simmonds added: “This is a welcome step towards securing the future of the high street and the pubs that serve them.” British Institute of Innkeeping chief executive Mike Clist said: “The recommendations made in the report are a move in the right direction, which will go some way to helping our members overcome the challenges they currently face.”

Licensed Trade Charity gives £1.1m in grants to sector staff in 2018, 45% rise in people benefiting: Staff from pubs, bars and breweries received a record £1.1m in grants from the Licensed Trade Charity in 2018, helping them to get back on their feet in a range of ways from clearing rent arrears and unpaid bills to home adaptations, educational grants, and convalescence and funeral costs. The charity revealed almost 13,500 people benefited from its free services in 2018, a 45% rise on the previous year. Many used the charity’s round-the-clock helpline and website. The charity thanked pub companies such as JD Wetherspoon, Ei Group, Stonegate, Mitchells and Butlers, and Fuller’s for increasing awareness among their staff. The Licensed Trade Charity also revealed in the last calendar year its volunteers made 976 phone calls to former trade workers who felt lonely, while more than 800 pupils visited the charity’s independent school, LVS Ascot, where bursaries and scholarships are available to children of those in the trade. For more information, visit

SBPA launches four initiatives to support Scottish leased and tenanted operators: The Scottish Beer & Pub Association (SBPA) has launched four initiatives that will give operators of tenanted and leased pubs added support and assistance. They will supplement the 2016 Scottish Code of Practice, which expanded on existing protections in place under a Code of Practice that had been in operation on a UK-wide basis. The initiatives are strengthening and promoting tenant rights through the creation of the voluntary Scottish Pubs Governing Body (under the auspices of the Pub Governing Body); supporting Scottish communities by putting pubs at their heart; offering tenants greater flexibility to sell local beer and ale; and funding the research and publication of an annual independent State Of The Nation report on the Scottish pub sector. SBPA chief executive Brigid Simmonds said: “As an industry we are committed to supporting our tenants in running the best pubs in Scotland and this package of initiatives – which will be developed and built on throughout the year – backs this up by providing a range of assistance. We are continually reviewing the support we provide as we know our member businesses cannot prosper unless individual, local pubs also succeed.”

Developer pulls out of Daventry leisure scheme deal due to ‘unviable market conditions’: Henry Boot Developments has pulled out of a deal to build The Oaks leisure scheme in Daventry, Northamptonshire, stating market conditions had made the project “unviable”. Daventry District Council confirmed it would be unable to meet its joint objectives with Henry Boot but added it remained committed to improving the town’s retail offer and would “explore alternatives”. Henry Boot Developments director Vivienne Clements told The Business Desk: “Despite our best efforts and a great deal of investment, we have been unable to move this scheme forward. While interest from national retailers has been encouraging, market conditions and infrastructure costs have unfortunately made the scheme unviable.” Cllr David James added: “We have a range of stores that want to come to Daventry and the council will explore how best to make this possible. In the meantime, work on the cinema and restaurants at Mulberry Place will press on.”

Company News:

Ichibuns team to launch high-end restaurant in White City next week: Endo Kazutoshi, director of ramen and burger concept Ichibuns and former executive sushi chef at Knightsbridge restaurant Zuma, is to launch a high-end restaurant in White City, west London, next week. Endo at Rotunda will open at the Television Centre development on Friday, 1 March. The venue will be in the rotunda at the BBC’s former home and, although offering only 15 covers, Kazutoshi told Hot Dinners he harbours ambitions to “obtain Michelin-starred status”. The third-generation sushi chef has 20 years’ experience, having worked at El Bulli in Spain and Zuma restaurants in London, New York and Miami. Kazutoshi is known for menu item the “umami bomb”, which features oysters, sushi rice, Parmesan and truffles. Kazutoshi is joining forces for the venture with his partners at Ichibuns – Benjamin Goldkorn and former Nobu head chef Robin Leigh. Kengo Kuma, who designed Alan Yau projects Sake No Hana and Cha Cha Moon, will be in charge of decor. Other operators at the £8bn Television Centre development include Indian small plates concept Soho House, better pizza brand Homeslice, D&D London’s Bluebird and better burger brand Patty & Bun.

Glendola Leisure expands into Belfast with plans for hotel and retail concepts: Glendola Leisure, led by Alex Salussolia, has acquired cocktail bar the Tipsy Bird in Ann Street, Belfast, and an adjoining development site with a view to build a “hotel and retail concepts”. Salussolia said: “We have been looking at Belfast for some time and see it as a city with a bright future for hotels and food and beverage outlets. We operate 21 bars and restaurants throughout the UK so the Tipsy Bird and adjoining site is the perfect fit for our long-term development plans and we are really looking forward to our expansion into Belfast.” Alfred Bree, managing director of Glendola Leisure’s hotel arm, Carlton Hotel Collection, added: “This is a really exciting opportunity for Carlton. We are building a hotel in Old Town Edinburgh, which will open in May. The Belfast development will be our next focus and we’re confident we will build a hotel the city can be proud of.” Glendola finance director Graeme Ramsay said: “The group has a long-term relationship with Barclays Bank and it has provided financing to support the initial acquisition. We have worked really hard on this particular deal and we’re delighted to invest in this wonderful city.” Glendola Leisure operates sites in London, Glasgow, Edinburgh, Manchester and the south coast, while Carlton Hotel Collection has ten properties in Scotland, Holland and Belgium.

Camerons to convert Leicester Head of Steam to second Sanctuary: Camerons Brewery is to convert its Head of Steam site in Leicester into a second venue for its Sanctuary concept. The company said the new format was being introduced after “listening to the market”. Camerons opened the Head of Steam site in April last year, when it replaced The Reynard pub in Market Street. However, it will close on Sunday (24 February) with Sanctuary opening on Friday, 1 March. Camerons head of managed estate David Scott told Leicester Live: “We have had a number of Head of Steam pubs open in 2018 and this brand is performing fantastically in Birmingham and Cardiff. We have some exciting plans in place to further expand the brand in 2019 but we have listened to the market in Leicester and have a superb brand in Sanctuary we rolled out last year in Scarborough. We feel this is more aligned with the sport and late-night economy and demographic in Leicester. It was always our intention to look for potential sites for Sanctuary after the success we’ve had in Scarborough. We are excited to see both the Sanctuary and The Head of Steam brands grow in 2019, and see this as the logical next step for Sanctuary.”

Paddy & Scott’s agrees Clip ’n Climb link-up: Independent Suffolk coffee shop operator and wholesaler Paddy & Scott’s has agreed a link-up with indoor climbing brand Clip ’n Climb. The deal will see Clip ’n Climb’s new Ipswich site incorporate a Paddy & Scott’s cafe when it opens in May. Paddy & Scott’s will be located within the 13,500 square foot venue at The Havens in Ransomes Europark. Clip ’n Climb Ipswich will feature 42 challenges and have the highest wall and drop-slide in Europe. The 106-cover Paddy & Scott’s cafe will be on a mezzanine overlooking the climbing area and serve the brand’s coffee, smoothies, tea, nitro cold brew and food, including hand-made pizza. Clip ’n Climb director Mark Patterson told Insider Media: “There is a tremendous amount of synergy between these two brands and the relationship will help cement our bespoke centre as the flagship Clip ’n Climb in the UK and one of the very best in the world.” Martin Westhorp, an equity partner in Paddy & Scott’s, added: “Clip ’n Climb is doing great things for the leisure industry so it’s a fantastic fit for our brand, which is all about fuelling ambition.”

Bierschenke secures second City site: London-based authentic German beer hall Bierschenke is to double up in the City by opening a site close to Tower Hill. Founder Gerry Hanratty has told Propel the site will open in Crutched Friars at a site previously occupied by Bavarian Beerhouse. The 6,000 square foot site traded as a Bavarian bar and restaurant for about 14 years but ceased trading in October. Hanratty said Bierschenke had acquired a new lease and the site was currently undergoing a major refurbishment. He said: “We will spend approximately £750,000 to bring it up to the standard of our current site, close to Liverpool Street station, and we plan to open in early May. We will also continue to look for other suitable sites in the capital.” Hanratty previously told Propel he had funding in place for “another three venues”. Last month, the company reported like-for-like sales up 15% during the festive period. The debut Bierschenke site launched in London Wall in 2014.

Ei Group invests £1.4m to turn Wakefield bank into Craft Union pub featuring group-wide support hub: Ei Group is investing £1.4m to transform a Wakefield bank branch into a pub under its Craft Union banner featuring a group-wide support hub. The Wakefield & Barnsley Union Bank branch in Westgate will reopen in May as The Union Bank. The pub will also host Craft Union Pub Company’s support team and a suite of training and meeting facilities for use by the whole Ei Group. The Pub Support Hub scheme will create 20 jobs. Ei Group chief executive Simon Townsend said: “The Union Bank is a magnificent building we’re looking forward to revitalising. Our people are the most important part of our business and this new space allows us to give them a base for the support and training they need to continually deliver exceptional customer experiences, share best practice and enhance their personal development.” The Union Bank will be Craft Union’s third pub in Wakefield. Craft Union, part of Ei Managed Operations, has rapidly grown to 285 pubs since launching in May 2015. The Craft Union support team is currently based in Preston.

Venning brothers launch Highbury wine bar and bistro for fourth London site: Max and Noel Venning, the brothers who operate London cocktail bars Three Sheets, Bar Three and Little Mercies, have launched a wine bar and bistro in Highbury for their fourth site in the capital. Top Cuvée has opened in Blackstock at a space formerly occupied by Greek kitchen, bar and restaurant Exodus. Top Cuvée takes inspiration from the “cosy, wine-led bistros” of Paris. The 45-seater bar offers a mix of counter seating, tables and a large communal area for walk-ins. It also offers small plates created by former Harwood Arms and Naughty Piglets chef Dan Miller alongside charcuterie and cheese, while the natural wine list changes daily with bottles available to take away as the bar doubles as a “high-end off-licence”. Using the Vennings’ renowned mixologist skills, there is also a range of cocktails and craft beer, Time Out reports. Three Sheets and Bar Three are both in Dalton, while the Vennings launched Little Mercies in Crouch End in September in partnership with Alan Sherwood, formerly of Scout and Peg + Patriot.

Arnaud Stevens acquires Buckinghamshire village restaurant and hotel for second site: Chef Arnaud Stevens has acquired the George & Dragon restaurant and hotel in the Buckinghamshire village of West Wycombe for his second venue. Stevens, who owns British restaurant concept Plate, in Shoreditch, will reopen the George & Dragon near the end of March following a refurbishment. Comprising ten bedrooms, an a la carte restaurant and adjoining bar, the George & Dragon is housed in a former coaching inn dating to the 1700s. The menu will include whole slow-roasted guinea fowl and cod loin with south Devon mussels with homemade sourdough bread. Arnaud, who has worked for Pierre Koffmann and Gordon Ramsay, said: “With the success of Plate, my team and I are excited to start the next chapter. It’s an exciting time and the opportunity to fully utilise the location and produce the beautiful village of West Wycombe has to offer is one we look forward to.”

Peak District-based operators secure multimillion-pound refinancing deal to relaunch Grafene at country house hotel: Paul and Kathryn Roden have secured a multimillion-pound refinancing deal to secure the future of Losehill House Hotel & Spa in the Peak District. The debt advisory team at Duff & Phelps secured funding from Allied Irish Bank to allow the Rodens to bring their Grafene dining concept to the hotel. The venue’s Orangery restaurant will be renamed Grafene At Losehill House Hotel. Last month, the Rodens announced they would close Grafene restaurant in Manchester to focus on the hotel, which was recently named country house hotel of the year by the Sunday Times. Paul Roden said: “We have a lot to be proud of and some exciting plans as we move to bring Grafene’s refined take on British eating to the hotel. The deal backs our ongoing investment strategy.” Duff & Phelps debt advisory managing director Paul Smith added: “We are delighted to have supported the management team at Losehill Hotel through the refinance process and delivered another successful outcome to a business in the hotel sector.” The Rodens have owned the 22-bedroom Derbyshire hotel since 2007.

D&D London appoints 20 Stories head chef following Aiden Byrne departure: Restaurant operator D&D London has appointed Brian Hughson as head chef of its 20 Stories restaurant and bar in Manchester. Hughson has taken over from Aiden Byrne, who left the Spinningfields venue in November. Hughson has been a chef for more than 25 years and has worked with Gordon Ramsay at The Savoy Grill, Marco Pierre White at The Belvedere, Henry Brosi at The Grill At The Dorchester, and Gary Rhodes at Rhodes W1. Hughson told the Manchester Evening News: “20 Stories is an iconic restaurant at the heart of a city where the food scene has blossomed over the past few years. Manchester has become a destination for diners with high standards and the city has responded with a number of fantastic restaurants.” Byrne was appointed head chef for the restaurant’s launch before leaving eight months later to snap up his old Manchester House site – now trading as Restaurant MCR – after it was put into administration by Living Ventures. Meanwhile, all-avocado concept The Avocado Show is to make its UK debut with a two-week pop-up at D&D London’s Bluebird restaurant in Chelsea. The transformed King’s Road site will serve five of The Avocado Show’s dishes from Monday, 11 March to Sunday, 24 March, including The Bun Burger, a wagyu beef patty with bacon and toppings served between two avocado halves; and The Avo Garden, a salad on top of an avocado. Born in Amsterdam, the concept is the brainchild of chef Jamie van Heije.

Schnatter amends Papa John’s lawsuit in wake of Starboard investment: Former chief executive John Schnatter has amended his lawsuit against Papa John’s in response to the recent $200m investment by hedge fund Starboard Value. Parties said the amended litigation asks for a reversal of a recent company policy that requires new investors to vote in favour of Papa John’s preferred directors and prevents shareholders from holding “any substantive discussion” about Papa John’s. Schnatter remains on Papa John’s board of directors and is the company’s largest shareholder, with about 29% of stock. However, despite Papa John’s rejection of Schnatter’s offer of investment in favour of a similar offer from Starboard, Schnatter said he “welcomed” the outside aid that could boost the company’s reputation. Schnatter’s attorney, Garland Kelley, told Nation’s Restaurant News: “Mr Schnatter welcomes the comments that have come from (Starboard chief executive Jeffrey Smith) and the company in the past few days. Indeed, the amended lawsuit reflects support for Mr Smith and his plans to invigorate the company for the benefit of all shareholders.” Schnatter’s dispute with Papa John’s started last July when he resigned as chairman following reports he made a racial slur in a meeting.

Casual noodle and dumpling concept Shanghai Modern launches in Chinatown London: Casual noodle and dumpling concept Shanghai Modern has launched in Chinatown London. The restaurant has opened at Central Cross, a 48,000 square foot mixed-use development at Chinatown’s eastern gateway. The 4,000 square foot restaurant features interiors inspired by Shanghai such as wood panelling, marble tables and gold finishes. Chefs prepare fresh dumplings and noodles at the front of the venue, including roast duck noodles and grilled Chinese tapas. Julia Wilkinson, head of group restaurant strategy at Chinatown London landlords Shaftesbury, said: “Shanghai is a melting pot for neighbouring cuisines so Shanghai Modern offers a diverse menu while focusing on Shanghainese classics such as Xiao Long Bao and Drunken Chicken. Xiao Long Bao is synonymous with the food culture in the city and we are thrilled Shanghai Modern is transporting a small pocket of this to the streets of Chinatown London." Chu Ting Tang, of Shanghai Modern, added: “With such a central location and vibrant atmosphere throughout the day and into the evening, Central Cross in Chinatown London is an idyllic destination to open our latest restaurant.”

Historic north London pub and theatre brought to market: The Old Red Lion, a pub and theatre in Angel, north London, has been brought to market at a £575,000 premium for the leasehold. The four-storey venue dates to 1415 and retains many original features. It comprises an 80-cover ground-floor bar, a partially covered terrace with seating for 20 and a 60-capacity theatre, which has been operating since 1979. The venue also features a commercial kitchen, a self-contained two-bedroom flat and two bedsits with a shared bathroom. Current tenant Damien Devine, who has operated the pub with his family for the past 20 years, is looking to retire. He said: “We leave behind a fantastic business with huge possibilities.” James Laskowski, business agent at Christie & Co, who is handling the sale, added: “The Old Red Lion provides a rare and exciting opportunity to run an established and renowned pub with a theatre, allowing an operator to benefit from multiple income streams and an apartment and bedsits for staff.”

Leicester-based operators to shut city cafe and deli due to ‘poor economic climate’: Leicester-based operators Andy and John Husain are to shut their cafe and deli in the city next month. The brothers said the venue in Queens Road would close on Saturday, 2 March because of the “poor economic climate”. Salvador Deli, which serves sandwiches and salads as well as cheese, olives, Spanish ham and other Mediterranean fare, opened in 2009. The Husains’ other businesses – restaurant Barceloneta and Bar Dos Hermanos – will remain open. John Husain told Leicestershire Live: “Unfortunately after four years of subsidising the business in the hope the economic climate would improve, this has proved not to be the case. Our turnover has declined and all our costs have increased substantially.”

Administrators seek buyer for historic Windermere hotel: A hotel on the banks of Lake Windermere has entered administration after a large-scale renovation project led to cash flow issues. The Hydro Hotel comprises 78 en-suite rooms, conference and meeting areas, a restaurant and bar, and a 150-capacity ballroom. It was founded in 1895. The venue reopened in early 2017 after a multimillion-pound refurbishment but following cash flow issues Phil Pierce and Paul Whitwam, partners at FRP Advisory, have been appointed joint administrators. They are now in advanced talks with potential buyers and hope to conclude a sale of the site in the near future. Until then, the hotel will continue to trade and bookings will be honoured. All 32 employees have also been retained. Pierce told Insider Media: “The Hydro Hotel is a beautiful building situated in one of the most stunning locations in Britain. The business has huge potential and our focus is on working with directors to secure a sale of the hotel and ensure the best possible outcome for everyone involved.”

Beannchor Group gets go-ahead for £4m Lisburn hotel: Northern Ireland hospitality company Beannchor Group has had its plans to build a £4m hotel in the centre of Lisburn approved. The company, which owns pubs, hotels and restaurants across the country including eight Little Wing Pizzerias, has earmarked a former Argos store at Lisburn Square for the venture. It would take up about 30,000 square feet and include 52 bedrooms and a ground-floor bar and restaurant, creating 75 jobs. Beannchor Group managing director Bill Wolsey told Insider Media: “We already have a presence in Lisburn Square through our Little Wing Pizzeria and have been working alongside the square’s owners for the past six months to create the vision for a hotel the people of Lisburn can be proud of.” The hotel is scheduled to open in the summer. Nicky McCollum, development director at Lisburn Square, added: “The Merchant and Bullitt Hotels created in Belfast by the Beannchor team have been instant successes and are at the cutting edge of the hospitality industry in Northern Ireland. It is our intention to attract other quality food and beverage operators to the square and continue to create a family friendly environment within the piazza as well as stimulate the night-time economy.”

Goodbody – Dalata full-year results should provide ‘another positive update’: Goodbody leisure analyst Gavin Kelleher has said Irish hotel operator Dalata’s full-year results should provide “another positive update”. Issuing a ‘Buy’ note on the shares with a target price of €7.75 (£6.74) ahead of the announcement on Tuesday (26 February), Kelleher said: “We forecast FY18 revenue growth of 12% year-on-year to €389m. On 18 December, the group-guided Ebitda would be in line with market estimates (circa €115m). We expect a total dividend per share of 10.2 cents for FY18. Despite its UK roll-out plans, Dublin remains the main driver of profit growth over the forecast horizon (circa 65% of group Ebitda). We forecast Dublin revpar growth of 7.4% (STR: 7.2%) in 2018. Outside Dublin, we forecast regional revpar growth of 5.1% (STR: 9.7%) and UK revpar growth of 2.1% (STR: 2.5%). We wouldn’t be surprised if Dalata slightly outperformed in Dublin given it flagged up at its pre-close update that in the year to November it was running at 8.8% growth (versus market growth of 7.4%) and its history of outperforming market revpar growth in Dublin. We expect a good set of results next week and continue to like the Dalata investment case. This is due to the highly attractive supply and demand dynamics in its key Irish markets; its growth profile over the medium term; and its attractive free cash flow dynamics. We believe the valuation remains very undemanding, at circa ten times FY19 EV/Ebitda and a circa 8% free cash flow yield for FY20. We reiterate our ‘Buy’ recommendation.”

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