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Thu 28th Nov 2019 - ETM Group results, Nando's owner in debt for equity swap, Hop launches crowdfunding campaign
ETM reports 5.8% increase in full-year like-for-likes, undertakes strategic review: ETM, the 15-strong pub and restaurant group, saw turnover grow to £31.5m, up 16.7% in the year to 24 February 2019, driven by like-for-like growth of 5.8%, an increase in events sales and continued site expansion. The company, which benefited from strong trading over the summer months in its sports-led sites as a result of the Fifa World Cup, saw group Ebitda increase 56.2% to £2.6m (2018: £1.7m). ETM said this was underpinned by sales growth, a “commitment to optimising margins” and “leveraging head office overheads”. Due to the continuing success of its sports-led portfolio, the business said it decided to undertake a full strategic review of its operations during the period. This resulted in exceptional one-off costs of £1.5m, principally in relation to abortive property acquisition costs, a business review, corporate restructuring and the buy-back of shares. In addition, ETM also took a £0.6m write-down in the value of intangible assets in connection with its exit from brewing operations and a move to contract brewing of its beer brands. Since the year end, the company has converted its Maple site at Westfield London to Westwood Sports Pub & Kitchen in Westfield White City, which it said was trading “successfully ahead of expectations”. The ETM sports collection now compromises Greenwood (Victoria), Westwood (Westfield London), Long Arm Pub & Brewery (Shoreditch), Redwood (London Bridge) and Broadleaf (Bishopsgate). During the year to 24 February 2019, the company said it also “heavily invested in new EPOS, ERP and BI solutions, streamlined and improved the supply chain and worked collaboratively with teams to develop the culture within the business”. At the start of October, ETM Group added to its sports-led venues collection by opening Redwood Sports Pub & Kitchen at London Bridge. A further site has been secured for 2020 in Manchester airport with Apiary, ETM’s premium airside restaurant and bar, due to open in collaboration with TRG Concessions in the summer. ETM chief executive Ed Martin said: “We are incredibly proud of our strong performance this year despite challenging trading conditions. The group continues to demonstrate there is consumer demand for experience-led venues that deliver on quality food, drink and sport. Our sports pub portfolio attracts an increasing number of guests for a wide variety of majority and minority sports and we will continue to invest and grow this side of the business. We also have a strong site pipeline in place and will continue to invest in our existing sites to ensure our offer remains relevant and differentiated.” Propel understands the business is in advanced talks to take the rooftop space at the former House of Fraser site in Monument, which is set to house a new Corbin & King restaurant on the ground floor.

Nando’s owner in debt for equity swap: The South African billionaire businessman owner of Nando’s has refinanced £128m of debt in the business to further its expansion. Richard “Dick” Enthoven swapped the loan for shares in the business to free up Nando’s balance sheet to fuel expansion, writes The Telegraph. A source told the newspaper the debt for equity swap should be seen as a “vote of confidence in Nando’s on the part of shareholders”. Nando’s UK business has reported revenues up 7.9% to £779.4m for the full year to 24 February 2019, with pre-tax profit up £13% to £96m, which the company said was driven by increased sales and a restructuring of central costs. Its number of restaurants in the UK increased 31 to 422 during the period. Nando’s Group, the brand’s global business that includes the UK but excludes South Africa, reported sales rose 8.4% to £1.1bn for the year. Operating profit fell 1.9% to £41.9m compared with £42.8m the previous year “largely due to higher costs as the business grew”. A Nando’s spokesman told Propel: “The business is performing well and in line with expectations. We have increased revenue as a result of organic growth in our key markets and, reflecting our confidence in the business and its prospects, have continued to invest significantly in our people, technology, refurbishing restaurants and expanding our international footprint. As a result of our ongoing investments we have reported a small reduction in operating profit but firmly believe the business is well placed for the future.” Propel understands Nando’s UK is exploring a move into dark kitchens. Earlier this year the company promoted Ben Taylor, previously its central head of operations, to the new role of head of off-premise (takeaway and delivery), giving him profit and loss responsibility for the company’s UK takeaway and delivery business. It is understood part of his new role involves steering the company’s off-premise property strategy to try new formats such as dark kitchens and cater for the “growing demand of off-premise and food on the go”.

Hop launches crowdfunding campaign for expansion, former EAT managing director invests: London-based Vietnamese street food concept Hop has launched a crowdfunding campaign as it looks to raise an initial £750,000 to aid its expansion across the capital. The five-strong business, which is led by Paul Hopper, has raised £558,260 from 56 investors with 21 days of the campaign remaining. The highest single investment so far has been £250,000. Hop is offering 7.60% equity in return for investment, which gives the business a pre-money valuation of £9.1m. The company, in which former Wagamama and Casual Dining Group chairman Martin Robinson is a significant investor, reported sales of circa £3.8m in 2018 and served an average of 12,000 customers per week. Hop said it was in negotiations with a leading concessions operator about opening a number of sites in transport hubs across the UK and in early-stage discussions with a “dark kitchens” operator to expand delivery capabilities. Hop said it also had an agreement with Vita Mojo to launch digital screen-ordering technology. However, the fund-raise will be used towards rolling out the concept across London with a site in Paternoster Square thought to be on the radar. Andrew Walker, former managing director of Pret A Manger and EAT, has invested in Hop through the crowdfunding campaign. He said: “I invested in Hop because I believe in Paul. He has an amazing drive and appetite for the business and an ability to build a strong management team with a wealth of experience. He loves people and food. What more can you ask for in the hospitality sector? His relentless search for perfection will ensure Hop is a successful business. This industry isn’t easy but when you have the capacity and flexibility Paul has to adapt to ever-changing circumstances you have a leader who can succeed.” Earlier this year Hopper told Propel that since opening its fifth site, at the bottom of the Cheesegrater building in the City of London in late 2018, the company had been consolidating its internal functions including improving its offer and margins. He said trading had been “solid in an erratic market”. Hopper said the fund-raise target would be about £3m so the concept could secure a pipeline of sites for the next two years. To date, the business has raised almost £4m of equity capital from high net-worth individuals.

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