Propel Morning Briefing Mast HeadAccess Banner  
Propel Morning Briefing Mast Head Paul's Twitter Link Paul's Twitter Link

Navitas Banner
Morning Briefing for pub, restaurant and food wervice operators

Fri 1st Mar 2019 - Revolution halts new openings programme, former Patisserie Valerie boss to sue new owner
Revolution Bars Group reports like-for-likes down 7.3% post-Christmas, new site opening programme halted: Revolution Bars Group, the operator of 79 premium bars trading across the UK under the Revolution and Revolución de Cuba brands has seen like-for-like sales fall 7.3% for the eight weeks to 23 February 2019. It comes on the back of a previously reported like-for-like sales fall of 4% for the six months to 29 December 2018. The company said like-for-like performance had improved in the first three weeks of February where they were down 5.5% despite being disadvantaged by short periods of closure of three Revolution sites for refurbishment, Valentine’s Day not coinciding with Wednesday student events, and later half term holiday weeks. It said adjusting for these inconsistencies would give an improvement for these three weeks of 1.9% to minus 3.6%, which the group said gave a better indicator of the underlying trend. The company added like-for-like sales are expected to improve significantly as it come up against softer comparatives for the remainder of the financial year. The slow start to the second half means full-year adjusted Ebitda is now expected to be in the range of £11m to £12m. The company said the focus was now on enhancing the proposition and delivering performance from the existing estate. Therefore, the new site opening programme has been halted. The company said it was “fully committed” to expanding the footprint longer term. As well as the three refurbishments earlier this month at Revolution sites in Cambridge, Clapham Junction and Leadenhall, another four are planned for the remainder of the financial year – at the Revolution bars in Beaconsfield, Albert Dock Liverpool and Call Lane Leeds as well as the Revolución de Cuba in Leeds. A further 156 are earmarked for the following financial year. The company said the refurbished sites had already seen an uplift in performance. The group said workstreams to improve the Revolution customer proposition and therefore improve sales and profit from our existing estate “continue to be designed and implemented” and was confident that and the increased investment would both improve the customer proposition and accelerate the return to like-for-like sales growth. These include its cocktail masterclass offering having a new gin-based variant added ahead of the summer season; the roll out of its online booking engine to 44 sites with a further 16 sites going live over the next month; and trials in two Revolution areas to establish a “better value proposition and a simplified promotional structure”. In addition, it has continued to establish its Saturday night “peak time perfect” project. The format has been developed into Saturday X (for large sites) and Saturday Y (for smaller sites). Six sites are live on Saturday X and outperforming the core estate by 7% post-9pm on a Saturday. A trial of Saturday Y will be live across nine sites by the end of April. Revenue for the six months was up 6.4% to £78.5m, while adjusted Ebitda for the period fell to £6.9m, compared with £8.9m the year before. The company had an operating loss of £3.1m, impacted by exceptional costs of £5.2m, compared with an operating loss of £3.7m the previous year. The group spent £8.3m on capital expenditure during the first six months of the financial year, compared with £6.6m in the same period last year. Of this, £5.7m (FY18: £4.3m) was incurred on five new openings, which are “trading well”. The remaining £2.6m was incurred on the existing estate (FY18: £2.3m). Chief executive Rob Pitcher said: “While Revolución de Cuba has performed well and delivered growth in the reporting period, it is clear the lack of investment into the Revolution proposition is impacting performance. Revolution has been reviewed, the issues identified, and workstreams are being implemented to restore it to growth. Our confidence in achieving this is underpinned by the good performance of the new Revolution venues, while the recently refurbished sites are also seeing uplifts. We have therefore decided to prioritise the refurbishment programme over new openings. We expect trading to improve as we come up against softer comparatives for the rest of the financial year.”
Former Patisserie Valerie boss launches lawsuit against new owner: Former Patisserie Valerie chief executive Steve Francis has launched a lawsuit against the cafe chain’s new owner and accused it of being “inexperienced”. Francis, who was dismissed without warning by Causeway Capital Partners – as first reported by Propel – said he was concerned about how the new owner would fund the business. He also accused Causeway, which rescued Patisserie Valerie from administration two weeks ago, of dismantling a plan to invest in the cafe chain, which he said was agreed when it was acquired. Francis said he was sacked last week as a cost-saving measure and because of “baseless allegations” relating to his management of the company while it was in administration. Francis, a turnaround expert who was brought in to run Patisserie in November, declined to give details about the allegations against him. He told The Times: “I think it’s highly likely Causeway will close a reasonable number of stores. [Causeway] seemed surprised and somewhat irritated management’s plan was not to close more than one or two branches.” Francis said an investment programme that would have seen about £5m worth of refurbishments, redundancy payments and working capital put into the business “had been completely curtailed”. He added: “This is a young, inexperienced fund that has taken over a business with 2,000 employees, and there is no mechanism through which that can be regulated. I feel very sad the employees and the customers have now got to endure more uncertainty and turmoil.” Patisserie Valerie has 96 cafes around the UK. It went into administration in January following a £40m apparent fraud that left it unable to pay back large debts, rendering its shares worthless. The Serious Fraud Office is investigating. Francis was dismissed alongside Rhys Iley, Patisserie’s commercial director. The pair had been preparing to invest a “seven-figure sum” in the business alongside Causeway in a deal that was pitched to KPMG, the administrators, as part of the bid to buy the company. Under the deal they would have owned about 20% of Patisserie Valerie, Francis said. A spokesman for Causeway Capital declined to comment.
Merlin Entertainments trialling escape rooms and pop-up events: Merlin Entertainments is undertaking trials of escape rooms and pop-up events. The company has put in escape rooms in Madame Tussauds in San Francisco and in The Bear Grylls Adventure in Birmingham. Management talked about the opportunity for “exponential growth” in such formats during a conference call with analysts. Peel Hunt leisure analyst Ivor Jones said combining management’s interest in these formats with what it has said about the monetisation of intellectual property, there is the opportunity to build another leg to Merlin Entertainments. Issuing a ‘Buy’ note on the shares with a target price of 450p following the company’s full-year results, Jones said: “Winter is a seasonally quiet period for Merlin, but management notes that trading so far is in line with expectations. Merlin recently announced plans to dispose of its ski resorts in Australia for £95m. We have also lowered our expectations for Legoland New York in its opening year in FY20E. We have lowered our FY19E Ebitda forecast by 3%, FY20E by 7% and FY21E by 4%. We see potential for upside to our underlying forecasts in the Midway division where our FY19E like-for-like sales growth forecast is 2% growth (after like-for-like growth of 0.1% in FY18). With robust London tourism and assuming a more normal summer, this growth rate forecast for Midway could be beaten. There is similar potential at Legoland Parks, which reported FY18 like-for-like sales down 0.3% after the FY18 marketing wobble at one of the parks. There is potential for a more robust recovery than implied by our 3% like-for-like forecast. We were interested in the potential for Merlin to expand into escape rooms and pop-up events and is undertaking some trials. We believe this could be an opportunity for Merlin to use its scale to help intellectual property owners to monetise assets. The share price has bounced off the lows at the start of the year and Merlin is currently trading on full multiples. However, we believe it is good value for a global business with a multi-year growth plan underpinned by key brands, and we reiterate our ‘Buy’ recommendation.”

Vapiano closes Glasgow restaurant: Vapiano has closed its Glasgow site just a year after launch. Bosses said the decision to shut the Buchanan Street restaurant was taken for “commercial’ reasons” and described Glasgow as the “wrong location”. The restaurant opened in the former George Hotel building in January last year. It followed the earlier opening of an Edinburgh branch, the firm’s first outlet in Scotland. A refurbishment of the building saw developers create a 293-seated capacity restaurant, complete with restored Victorian stained-glass windows. A Vapiano spokeswoman told the Evening Times: “We would not have enjoyed this past year without the local community here in Glasgow many of whom are now friends, and we do appreciate how important Vapiano has been to many regulars and tourists visiting the city, however while this is very sad, we believe this is the right commercial decision for the long term benefit of the UK business – it was quite simply the wrong location. We are in discussions with our team about the future, having already assured them they will be looked after. Vapiano will focus on its existing restaurants in Edinburgh, Manchester and London, which are trading well above expectation, serving more than 45,000 guests a week collectively.” Vapiano operates seven sites across the three cities.

Return to Archive Click Here to Return to the Archive Listing
Punch Taverns Link
Return to Archive Click Here to Return to the Archive Listing
Propel Premium
Jameson Banner
Co-Kitchens Banner
Peppadew Banner
Unilever Banner
Santa Maria Banner
Jameson Banner
Tofoo Pro Banner
HDI Banner
Meaningful Vision Banner
Ponte Banner
Lamb Weston Banner
Unilever Banner
Propel Banner
Cynergy Bank Banner
St Pierre Banner
John Gaunt Banner
HGEM Banner
Zonal Banners
Access Banner
Purple Story Banner
Propel Banner
Christie & Co Banner
Beyond the Bean – Zuma Banner
St Pierre Banner
CACI Banner
Sector Banner
Airship – Toggle Banner
Venners Banner
Wireless Social Banner
Payments Managed Banner
Deliverect Banner
Hospitality Rising Banner
Tofoo Pro Banner