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Fri 5th Jul 2019 - Propel Friday News Briefing

Story of the Day:

MeatLiquor completes fund-raising, average like-for-likes up more than 5%: MeatLiquor, the Scott Collins-led concept, has strengthened its balance sheet with a further fund-raise from existing shareholders, as it reported like-for-like sales across its estate were on average up more than 5% for the past six months. Propel understands the 11-strong business has raised a further £240,000, mostly from existing shareholders, to strengthen its balance sheet and has renewed its banking facilities to fund its expansion programme. The new investment brings the total funds raised to date by the business, which launched its debut site and first fund-raise in 2011, to just £840,000, with its expansion so far mostly built on cash flow. In its most recent filed accounts, the group’s holding company – Meatailer – reported turnover of £14.7m, and posted group Ebitda of more than £900,000. Since the end of its financial year, the company has opened two more restaurants, in Northcote Road, Clapham, and in Margaret Street near Oxford Circus. The latter replaced its original site in Welbeck Street, which was closed as part of a wider redevelopment of the property in which it was housed. A company spokesperson told Propel: “Our new West End MeatLiquor site has opened ahead of schedule, under our capital budget, and sales are ahead of forecast. It is now trading a full seven days a week from 11.30am to 3.30am and is in its fifth week of growth. Our like-for-like company sales have been on average more than 5% ahead of last year for the past six months. Meanwhile, MeatLiquor Queensway has now ended its second year of trading and has smashed our expectations.”

Industry News:

Mark Wingett to look at whether property has reached tipping point in latest Premium column, Ted Kennedy video: Propel insights editor Mark Wingett will look at whether property has reached tipping point as part of his latest opinion piece, which will be sent to Propel Premium subscribers on Friday (5 July) at 5pm. He will also look at recent changes at Las Iguanas and Greene King and whether we should stop saying “hospitality is a job for life”. Subscribers will also receive a 30-minute video on Friday in which Ted Kennedy, owner of Pebble Hotels and veteran operator of pub assets, sets out seven key lessons learned as an operator and how these have been applied to making Alan Yau’s Duck and Rice concept profitable. Propel Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out, discounts to attend Propel conferences and events, regular video recordings of key speakers from Propel events and conferences, and regular columns from Mark Wingett. They also receive access to our database of multi-site companies, which has now grown to 1,400 businesses. An annual premium subscription costs £345 plus VAT for operators and £445 plus VAT for suppliers – plus £50 each for additional team members. Email anne.steele@propelinfo.com

Propel launches Pre-booked Sales Masterclass, open for bookings: Propel has launched the Pre-booked Sales Masterclass to help operators make the most of this increasingly important opportunity. The event takes place on Thursday, 5 September at One Moorgate Place in London and is open for bookings. Propel has partnered with former Novus sales director Rupert Macfarlane, who now runs The Advanced Sales Network, to show how, when implemented correctly, pre-booked sales can transform a business’ performance. He will explore ten steps to pre-booked sales growth, including determining the level of resource required to efficiently achieve reactive and pro-active sales goals; recruiting the best sales people and creating a high-achieving sales team; delivering true sales growth, not cannibalisation; and making pre-booked sales growth “stick”. Tickets are £295 plus VAT for Propel Premium subscribers and £345 plus VAT for others. To book, email anne.steele@propelinfo.com or call 01444 817691.

Deliveroo to slash prices by 25% on Fridays in July: Deliveroo is slashing prices by 25% on Fridays as part of its biggest customer giveaway. Consumers can take advantage of the Friday Feast promotion during July by making an order of £25 or more on the Deliveroo app between 8am and 11.59pm at more than 2,000 participating UK restaurants, including Carluccio’s, Five Guys, Leon, PizzaExpress, Red’s True Barbecue, Wildwood and YO! Sushi. Deliveroo UK and Ireland marketing director Emily Kraftman said: “We’re going to be giving away millions in free food throughout July.”

Licensing update: Licensing solicitor John Gaunt & Partners produces a useful monthly summary of topical issues. The latest edition includes a reminder for operators to obtain temporary event notices to ensure they can open early enough to screen all Rugby World Cup games. To access the summary, click here

Company News:

Monty’s Deli to shut Hoxton site after continued losses put business on brink: Jewish soul food trader Monty’s Deli is to close its Hoxton site because continued losses at the venue have put the business at risk, Propel has learned. Monty’s Deli will shut the site in Hoxton Square, which was the company’s first bricks and mortar site, on Sunday, 28 July. Propel understands the outlet had a positive end to 2018 in line with forecasts and 2019 started well but there was a sudden downturn in the business in April and, despite attempts by founders Mark Ogus and Owen Barratt to mitigate losses, they have now become unsustainable. The site is used as a production kitchen for the wider business and it’s believed the costs of running it are greater than the other sites’ profits. As a result, the business has suffered heavy losses this year. It’s thought the situation has forced Ogus and Barratt to shut the Hoxton site to protect the business. Its sites at the Market Halls development in Victoria and Old Spitalfields Market will continue to trade, with production split between the two until a new dedicated production kitchen is found. It’s thought the Victoria site had been underperforming against forecasts since opening in November but has started to turn around and is now in profit. Meanwhile, it’s understood the Old Spitalfields Market venue has seen turnover increase this year and is in profit. Following the decision to shut the Hoxton site, Propel understands Ogus and Barratt expect the business to return to profit by September, while they are currently developing a retail range of products. Last year, Monty’s Deli raised more than £215,000 on crowdfunding platform Crowdcube to support expansion plans. 

Marmalade Pubs reports £1.7m sales in first full trading year, Ei Group made £796,000 profit from Hunky Dory stake sale: Marmalade Pubs, the joint venture between Marylebone Leisure Group and Ei Group’s Managed Investments segment, has reported sales of £1,717,000 for the year ending 30 September 2018 – its first full year of trading. Although the company was incorporated in June 2016, the company had no pubs in its portfolio during the prior period. Marmalade Pubs made an operating loss of £132,000 and a loss before tax of £164,000, according to accounts filed at Companies House. During the period Marmalade Pubs operated three sites but now trades from two having sold The Compton Cross in Soho to Shepherd Neame in April. Marmalade Pubs now operates the Portobello Star in Notting Hill and the Crown & Treaty in Uxbridge. In their report accompanying the accounts, the directors stated: “The loss before tax for the year amounted to £164,000 (2017: zero) primarily due to administrative costs incurred establishing the business operations. The directors don’t recommend the payment of a dividend.” Meanwhile, new accounts have revealed Ei Group made a profit of £796,000 on the sale of its 51% stake in Hunky Dory Pubs to Oakman Inns and Restaurants in September last year. Ei Group and Oakman Inns formed the partnership in May 2016 and it operated two sites – The Beech House in Solihull, which opened in August 2016, and The Four Alls in Welford-on-Avon, Warwickshire. The stewardship of the two pubs will be taken over by Ei Group’s commercial properties division with Oakman Inns holding the leases. It was the first time an Ei Group Managed Investments joint venture has ended since the format was launched in 2015. Ei Group currently has 11 managed joint-venture partnerships, including Hippo Inns with Rupert Clevely and Frontier Pubs with Karen Jones.

Sunset Hospitality Group brings Sweet Chick to the UK: Sunset Hospitality Group, the Dubai-based boutique investment and hospitality management company, is bringing US fried chicken and waffle concept Sweet Chick to the UK, Propel understands. The company will open its debut site under the concept this autumn at the former Carluccio’s in Market Place, near Oxford Circus. It’s thought the company is also looking at sites in Birmingham for the concept, which has four restaurants in New York and one in Los Angeles. Sunset Hospitality Group is understood to have hired Christine Chung, formerly of Bill’s and Cote brands Jackson & Rye and Limeyard, as operations director for its UK arm. It’s thought the company may look to introduce further concepts it works with into the UK, including US burger, shake and craft beer concept Black Tap. Sweet Chick was founded in 2013 by John Seymour and is backed by rapper Nas. Seymour said: “I can’t wait to bring the Sweet Chick community to the UK. The food scene is massive in London but we hope we can offer something fresh with our take on southern-inspired staples and the best fried chicken and waffles this side of the Atlantic.” Shelley Sandzer secured the site on behalf of Sweet Chick.

West Berkshire Brewery raises £1.8m in latest fund-raising round: West Berkshire Brewery, the David Bruce-chaired group, has raised circa £1.8m as part of its latest fund-raising round to aid growth of its brewing and pub operations, Propel has learned. The fund-raise was understood to be the last chance to invest in the business under the Enterprise Investment Scheme, with the company having an initial fund-raising target of £3.5m. It is thought the funding will be used to support working capital demands, drive profitability through existing operations and additional capital expenditure where necessary, and pub acquisitions. Forecast revenues for the company for the year to the end of March 2019 were £6.6m, up 97% on the prior year, with the company targeting full-year turnover of more than £13m to the end of March 2020 with Ebitda of circa £1.3m. The company currently operates three pubs under its own vehicle – The Depot in Holloway, The Grapes in Oxford, and the Taproom & Kitchen at its brewery development – plus two London pubs, the Old Suffolk Punch in Hammersmith and The Oxford Tavern in Kentish Town under its Downing Pubs joint venture Maverick Pubs. Earlier this year, the company opened the first pub under its sole ownership. It relaunched The Grapes in Oxford having previously acquired the lease from City Pub Group. The George Street venue has been refurbished and West Berkshire Brewery offers its own beer as well as those from local brewers.

Pret makes Swiss debut in partnership with SSP: Pret A Manger has made its Swiss debut in partnership with UK-based transport hub foodservice specialist SSP Group. Four Pret shops have opened at Zurich airport – airside in Gates B, D and E, and landside in the airport shopping area. The shops offer Pret’s traditional menu of sandwiches, protein-based salads, wraps, baguettes and croissants alongside juice, smoothies, organic coffee and tea. The menu items are prepared fresh daily in a dedicated Pret kitchen at the airport. Pret partnerships managing director Michael Haley said: “Opening shops in Switzerland with our partner SSP is a new step for Pret and one we’re excited to explore.” Oliver Dörschuck, chief executive of SSP Dach and Frabel, added: “We are proud to bring Pret to Zurich airport. Pret is a strong international partner for us and well received by customers around the world.” 

Mr & Mrs Smith co-founder raises £800,000 for premium delivery concept: Andrew Grahame, co-founder of boutique hotel specialist Mr & Mrs Smith, has raised £800,000 through an Enterprise Investment Scheme (EIS) to back The Cook & The Thief, his delivery concept for high-end restaurants, including those with Michelin stars. The business, which Grahame has invested more than £300,000 of his own money in while working on the concept for the past four years, aims to serve the premium end of the burgeoning food delivery market. Grahame was initially seeking to raise £1m, while the business has a pre-money valuation of £2.95m. The Cook & The Thief will initially focus on London, with aims to roll out to other cities and countries. The food will be delivered by uniformed scooter riders and use soon-to-be-patented technology developed by the company so it arrives in “restaurant condition”. The company said the technology stopped the food being “sloshed around”, while a heater kept it at the right temperature. The company sought the investment to fund staffing, marketing and packaging costs to launch its service, initially with a soft launch this summer followed by a live launch in the autumn.

Fireaway Pizza plans five further openings: Artisan pizza franchise Fireaway is planning a further five openings after recently opening its 13th site, in Bermondsey. Launched less than three years ago by Mario Aleppo, the company has expanded across London and the south east through two franchise packages – a standard restaurant franchise and Fireaway Express. Fireaway’s most recent openings were in Margate in January and Southampton in March. The company also has openings lined up in Brighton, Kingston, Sittingbourne, Stoke-on-Trent and Watford. The concept offers 25 toppings for diners to customise their pizza and promises all its stone-fired pizzas are delivered within 180 seconds.

Amber Taverns acquires Bridgwater pub for debut Somerset site: Amber Taverns, the wet-led community pub operator led by James Baer, has acquired its first site in Somerset. The company has bought The Duke in Bridgwater in a deal brokered by agent James A Baker. The High Street pub, which features a bar area, skittle alley, dedicated function room and four en-suite rooms on the first floor, will undergo refurbishment before reopening in the autumn. Amber Taverns property director Sam Frankland said: “Amber Taverns is excited to have bought its first pub in Somerset. We intend to fully renovate the property to make it a favourite with the people of Bridgwater.” Amber Taverns owns more than 140 sites across England and Wales. 

Colbeck joins Coppa Club and Strada owner as operations director: Various Eateries, the Hugh Osmond-backed operator of Coppa Club and Strada, has appointed Duncan Colbeck, formerly of The Ivy Collection, as operations director. Colbeck joined The Ivy Collection as operations director in March 2016 after 14 years at D&D London. He stepped down from the Richard Caring-owned business at the end of last year. Earlier this year, Tom James stepped down as director of operations of Strada and Coppa Club to join Harbour Hotels as regional director. Last month, Coppa Club reported an 8.9% growth in like-for-like sales in its second quarter as it ramps up expansion. The brand, which operates five sites in London and the south east, is set to open a venue in Berkshire this month as part of the £12m refurbishment of Osmond’s Thames-side venue The Swan at Streatley. The venue will be the biggest club to date, with a riverside terrace, library, lounges, gym and 47 bedrooms. A further Coppa Club will launch in Brighton in August.

BrewDog extends Equity for Punks fund-raise and allows cryptocurrency: Scottish brewer and retailer BrewDog has extended its latest Equity for Punks fund-raise and is now allowing people to invest in cryptocurrency. The campaign, which aims to raise a minimum of £7m and has a stretch goal of £50m, was due to close on Friday (5 July) but will now run until April 2020. So far, 22,115 investors have pledged £5,153,420, which means the total amount pledged to date through BrewDog’s six Equity for Punks campaigns is in excess of £72m from more than 114,000 people. BrewDog wants to use the funds from the latest campaign to open two breweries in China, the first before 2020. It also wants to open a hotel, brewery and museum in London after its first hotel, the Doghouse at its brewery in Columbus, Ohio, “exceeded all expectations”. However, its key focus is to open five brewpubs, in Germany, Italy, Spain and France. BrewDog co-founder James Watt said: “Our Equity Punks are our community, our shareholders and our friends and the driving force behind our business. The growth BrewDog has shown over the past decade could only have been achieved with their encouragement and support. Cryptocurrency is the same. If you embrace change to subvert the mainstream we are in your corner.” Meanwhile, BrewDog has secured a 20-year lease to open a bar in the former CAU restaurant in Cambridge after agreeing a deal with agent KLM Retail on behalf of LaSalle Investment Management.

Hill-backed Bosco Pizzeria lines up Bath opening: Bosco Pizzeria, the Bristol-based concept that includes Steve Hill, former chief executive of Wagamama and current chairman of Pho, as a backer, is set to open a third site, in Bath. The concept, which was founded in 2014 by owner Miles Johnson, is understood to have applied to open at the former CAU site in Milsom Place. The company operates two sites in Bristol, in Whiteladies Road and Clifton Village. The menu features about a dozen pizzas as well as pasta dishes and a few meat and fish options, while the Italian wine list offers 20 varieties by the glass.

Frankster’s opens fifth site, in Leeds: Casual dining concept Frankster’s has opened a restaurant in Leeds for its fifth site. The company has opened the 155-seater venue at the White Rose Shopping Centre in the former Handmade Burger Co unit. Frankster’s, which was previously known as Frankie’s, offers burgers, peri-peri chicken, healthy grilled options, desserts and shakes. A Frankster’s spokeswoman told Insider Media: “We are thrilled to be opening in such a vibrant and successful shopping centre, it is the perfect location and profile for Frankster’s.” Frankster’s operates sites in Batley, Blackburn, Bradford and Morley. As previously reported, the company is targeting five more openings by 2020.

Signature Living looks to secure new long-term funding as turnover passes £20m: Aparthotel developer and operator Signature Living has revealed it is looking to secure new long-term funding as it reported turnover has passed £20m. The company, founded by Lawrence Kenwright, reported turnover rose to £20,665,037 for the year ending 31 March 2018, compared with £14,066,408 the year before. Signature Living saw pre-tax profit of £1,111,052, compared with a loss of £5,342,686 the year before as per its restated accounts. This follows a change in accountancy policy regarding room sales to defer profit on such sales to the point of development completion. In his report accompanying the accounts, Kenwright stated: “The group continued to improve the performance of its core operations, exploiting further development opportunities and growing its forward pipeline of projects as the strength of the brand continues to be enhanced. There has been a strong focus on accessing cheaper and longer-term commercial funding streams based on its rapidly maturing operations and improved trading performance across the group. This has strengthened the asset base of the group balance sheet, improved operational cash flow and positioned the group to improve underlying profitability in the short to medium term. During the period, equity in the group has grown to £24.2m. Further to this, there’s additional underlying equity that will be unlocked in the group as the larger venues such as 30 James Street and Shankly Hotel are refinanced. Acquisitions included the former post office in Preston, which will become another Shankly-themed venue, building on the strength of that growing brand, and also the purchase of the former Scottish Mutual Building in Donegal Square in Belfast, which will become a George Best-themed hotel. Key new funding streams are being progressed as the group continues to move towards longer-term funding partners. As at July 2019, there is £128.7m of property assets within the group containing equity of £58.8m.”

Multi-purpose space featuring food market and cinema to open in Catford: Cultural infrastructure developer Really Local Group is to open a multi-purpose space featuring a food market in Catford, south London. The company will launch Catford Mews, a 23,000 square foot community hub, in the late summer. The development will feature a three-screen cinema, food market, cafe, bar, live entertainment venue and, eventually, co-working areas and exhibition spaces. The food market will include stalls from local traders offering cuisine such as jerk chicken, pizza and vegan doughnuts. The venue will also include a full-service bar offering local produce including its own Catford Mews beer from nearby Brockley Brewery. The cinema will offer 220 seats across three screens, with programming in partnership with Independent Cinema Office. A stage with live performance equipment will be on offer, encouraging artists, groups and schools to become part of the programme. Really Local Group founder Preston Benson said: “It is my aim to make Catford Mews the envy of south London. I am excited to open this new community space and look forward to sharing details on our next projects in the coming months.”

Kurdish restaurant and coffee shop Nandine opens third site: South London-based Kurdish restaurant and coffee shop Nandine has opened its third site. Husband-and-wife team Pary and Pola Baban have launched the venue in Camberwell Church Street. Nandine’s dishes include tamarind meatballs and smoked baba ghanoush, reports Hot Dinners. Nandine’s other sites are in Camberwell and at Peckham Levels.

Dotdotdot opens London restaurant to complement immersive experience: Technology-enhancement company Dotdotdot has opened a casual dining restaurant in London to complement its Jeff Wayne’s The War Of The Worlds: The Immersive Experience. Dotdotdot has launched The Spirit Of Man in Leadenhall Street. The 200-cover venue embraces the theme of HG Wells’ 1898 novel through a “Martian sculpture” and animated paintings depicting key scenes from the story. The menu includes pizza, burgers, pies and sharing boards. Cocktails are inspired by key scenes in the book alongside cold-brew coffee and espresso martinis. Dotdotdot chief executive Andrew McGuinness said:  “The Spirit Of Man offers a true representation of the story told within the experience and the Victoriana era in which it’s set.” Jeff Wayne’s The War Of The Worlds: The Immersive Experience launched in May and is a multi-sensory experience set across 22,000 square feet that combines music, immersive theatre, virtual reality, augmented reality and holograms.

Cake Box opens Wood Green shopping centre site: The Cake Box, the specialist retailer of fresh cream cakes, has opened a site in Wood Green, north London. The company has launched the outlet in The Mall shopping centre on the ground floor. Founded in 2008, The Cake Box has grown to a national brand, with stores across the country offering cream cakes to meet a growing demand for egg-free products. Gwendolyne Lobo, marketing manager at The Mall Wood Green, told BDaily: “The Cake Box is already a much-loved part of The Mall family, with stores at the Luton and Maidstone shopping centres.” Cake Box now has 116 stores run by about 60 franchisees.

Foresight Group invests £4m in London-based Ten Health & Fitness: Foresight Group has announced a £4m growth capital investment into London-based Ten Health & Fitness. Managing director Joanne Mathews founded Ten in 2007 after a serious car accident revealed a gap in the market for a service that combined fitness with rehabilitation. Ten opened its first studio in Notting Hill and now operates eight across London with plans for further expansion. Ten provides one-to-one training and small-group fitness classes alongside in-house physiotherapy and massage therapy. Last year it launched TenClinical, which offers “specialist exercise to clients living with life-altering clinical diagnoses”. Foresight’s investment will drive roll-out of the Ten brand across Greater London, with an aim to double the business within three years. Foresight has also enabled the company to strengthen its management team, with a new chairman to be announced shortly. Foresight senior investment manager David Turner said: “Ten has a unique proposition in the well-being and clinical fitness markets and this is an exciting time in the company’s journey.” Mathews added: “We are excited about being able to drive the pace of growth in line with our ambitions to become market leader in wellness within the boutique health and fitness sector.” Advisers on the deal included Tamweel Capital.

Leasehold of Val d’Isère bar on market: The leasehold of Dick’s Tea Bar in Val d’Isère in the French Alps has gone on the market. Dick Yates-Smith founded the venue in 1979 and it is the only late-night outlet in the ski resort’s town centre. Dick’s Tea Bar has hosted celebrities such as Richard Branson and U2 singer Bono as well as regular after-parties for global events. The main trading space is on the ground floor with capacity for 500 people with all areas opened. Current owner Seb Hall said: “It has been a hugely fun and rewarding ten years but I now work outside Europe and don’t get to visit as much. The time has come to hand over the reins to somebody else to take the Dick’s Tea Bar brand to the next level.” The current rent is €134,188.44 per annum. Elysia Wilson-Gunn, of Fleurets, is marketing the lease.

Swiss-inspired immersive restaurant and bar opens in Soho: Swiss-inspired immersive restaurant and bar Heritage has launched in Soho. The 80-cover venue in Rupert Street offers classic Swiss dishes such as fondue, raclette, rösti and charbonnade, as well as French plates using luxury ingredients including wagyu beef and lobster. An immersive element sees diners barbecue meat, seafood and vegetables on table-top charcoal grills. The menu by head chef Aarik Persaud is based on sharing and is prepared in a theatre-style kitchen. The drinks menu includes cocktails and a 200-strong wine list. There is also a ten-cover bar and semi-private dining area seating 14. Persaud said: “London offers myriad cuisines but upscale Swiss food is under-represented.”

Distillery planned as part of £7m project at South Wales castle: Plans have been revealed to convert part of a 17th century castle in South Wales into a craft spirit distillery, bonded warehouse, gin school and visitors’ experience as part of a £7m scheme. The project for grade I-listed Hensol Castle will turn the site into a tourism destination while producing a range of spirits for commercial sale. The company, trading as Hensol Castle Distillery, is a joint venture between the Leeke family, who own The Vale Resort and Leekes, and the Mallows family from Cowbridge, who own Bottlers & Distillers Wales. Hensol Castle Distillery will produce gin, vodka and other spirits including low-calorie, low-sugar and low-alcohol ranges. Stephen Leeke, managing director of the Vale Resort, said: “This is a hugely exciting development at the Vale Resort and another critical step forward in the overall redevelopment of the historic Hensol Castle. It’s a key part of our strategy for the redevelopment of Hensol Castle and its destination restaurant.” The visitors’ experience, gin school and production facility will open later this year.

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