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Morning Briefing for pub, restaurant and food wervice operators

Mon 10th Jun 2019 - Beds and Bars to invest £7.5m in FY20 as it reports turnover and Ebitda boost
Beds and Bars to invest £7.5m in FY20 as it reports turnover and Ebitda boost: Bed and Bars, the pan-European hostel operator led by Keith Knowles, is planning to invest £7.5m into its sites and upcoming acquisitions in the new financial year as it eyes further expansion. The company plans hostel openings in Berlin and Edinburgh as well as refurbishments of its Belushi’s bars and St Christopher’s hostels in Hammersmith, Edinburgh, Amsterdam, Paris and Berlin. The announcement comes as the company reported turnover increased 8% to £52.5m for the year ending 30 March 2019, while group Ebitda rose 29% to £7.2m. Beds and Bars secured a new debt facility and bought out minority shareholders. Its direct channel strategy meant 50% of accommodation revenue came through its own booking platform, up 3.2% on the previous year. The company has seen 22% growth in pre-booked bar revenue while additional sales from the Fifa World Cup helped put the company 7% ahead of budget. During the year, a full review of the bonus distribution was made to go beyond management with the company rewarding performance by paying a “significant” proportion of its Ebitda in bonuses. Beds and Bars also launched a new staff rewards scheme while it is looking at offering more apprenticeship and internship schemes working alongside the NVQ. Increased investment in technology was a main priority during the year while, looking ahead, Beds and Bars said it expected most of its profit growth this year to come from overseas as cost pressures rose in the UK. During the reported financial year, the company invested £2.5m to fund refurbishments in Greenwich, Camden and Newquay and its Amsterdam bar. The company stated: “Since we have rolled out the new and improved Belushi’s brand across our legacy estate in the UK, we have aligned our product offering to match. We have moved into the premiumisation of our product and, as part of this, we focused heavily on delivering a better cocktail offering. Last year we grew cocktail revenue by 43%. We have also spent time analysing the customer upsell journey as well as our product knowledge training. As a result, we have seen a positive shift across all categories to our sales mix including a high proportion of premium products. In FY20, we are set to launch a new and improved booking journey for the Flying Pig brand, which will be up and running ahead of summer. Once launched, we will focus to do the same for St Christopher’s Inns. We are also working on a number of technology launches this year that will allow us to grow both our accommodation and bars pre-booked sales business, including a new portal for customers to manage their bookings, enhanced check-ins, as well as the redesign and redevelopment of the websites and apps across a range of our brands. In the wake of Brexit and other political uncertainties, the UK has continued to put pressure on businesses, particularly in the hospitality sector. In light of the UK’s current economic state, it is much more attractive for us to invest in other parts of Europe at this current time. Despite these hurdles, the group has demonstrated a strong financial performance in FY19 and we are confident this will continue into the new financial year. Beds and Bars will continue to search for further opportunities in the UK and Europe and is set to have a positive year.”

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