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Thu 12th Dec 2019 - Fuller’s, TGI Friday’s and PizzaExpress
Fuller’s reports good progress in transformational year: Fuller’s has reported revenue was up 6% to £174.8m in the 26 weeks ended 28 September. Adjusted profit was level at £17.9m. The company reported a ‘good performance’ from its managed and hotels with like-for-like sales growth of 2.7% (H1 2019: +4.1%). Tenanted pub revenue increased 3%, like- for-like profits reduced 3% (H1 2019: +4%). The company completed the sale of the Fuller’s Beer Business to Asahi Europe for £250 million in the period – a transitional services agreement (TSA) with Asahi is due to complete in May 2020. Fuller’s completed £69 million return of capital to our shareholders and £24 million voluntary contribution to the defined benefit pension scheme. The company added that managed pubs and hotels like-for-like sales are up 2.1% with total revenue up 5.1% for the first 36 weeks. Tenanted Inns like for like profits down 2% for the first 36 weeks. Chief executive Simon Emeny said: “The first half of this year has seen the biggest transformation in Fuller’s history. It has been a time of unprecedented change – and not without its challenges – but we have made good progress and we have a clear view and plan for the next steps in our journey from vertically integrated brewer and retailer to focused premium pubs and hotels business. Since completing the sale of the beer business at the end of April, we have put a new executive team in place – designed for the business as it is today. We have signed a long-term supply agreement with Asahi to protect the status of Fuller’s beers on our bars, while also forging new and exciting relationships with other interesting suppliers. Post period end, we have also completed the return of capital to our shareholders and made a voluntary contribution to our defined benefit pension scheme to the tune of £69 million and £24 million respectively. Finally, we have secured new offices, in our Chiswick heartland, which we will move to in the spring. And to cap off the first stage in our modern history we have, post the period end, completed the excellent acquisition of Cotswold Inns & Hotels – seven iconic and beautiful freehold sites in the Cotswolds and two vibrant bars in Birmingham’s city centre. For the 36 weeks to 7 December 2019, like for like sales in our Managed Pubs and Hotels have risen 2.1% and total sales have increased 5.1%. In our Tenanted Inns, like for like profits are down 2%. These are solid results in the context of consumer unease reflecting the ongoing political and Brexit uncertainty. We hope that the incoming Government helps us to continue to grow our business by overhauling the business rates system, ensuring a manageable level of wage inflation and creating an immigration system that allows us to recruit and invest in excellent team members from both home and abroad. There are a number of exciting new sites in the pipeline including The White Horse at Wembley, The Windjammer at Royal Dock and The Parcel Office at Liverpool Street Station as well as our first addition to Bel & The Dragon, which will be in an existing Tenanted site in Westerham, Kent. Major schemes will also be undertaken at The Mayfly in Stockbridge and The Bear at Burton near Christchurch, where we will be adding a further ten bedrooms, taking our total to 1,038. Fuller’s is well funded, has a clear vision, a distinctive strategy, a portfolio of extremely high quality assets and an excellent culture – which stands us in good stead to navigate further political and economic turbulence. Against this backdrop, and with an excellent and engaged team of people, we are poised to deliver further growth for our shareholders and our team members, and to ensure even more customers can enjoy all that Fuller’s has to offer.”

TGI Friday’s achieves 12-month growth: Electra Private Equity has reported that TGI Friday’s has achieved growth in the past 12 months with like-for-like sales up 1.5%, total sales up 2.4% and Ebitda up 0.5%. Total Ebitda was £26.9m and the company has net debt of £47.4m. Chairman Neil Johnson said: “We have made tangible progress in both of our two larger businesses, TGI Friday’ s and Hotter Shoes. At TGI the new management’s focus both on improving customer experience and on operational excellence gives confidence that it is on the right track to further develop the business and deliver profitable growth. After a challenging year in 2018 for the markets in which our larger investments, TGI Friday’ s and Hotter Shoes operate, we have been active in working to ensure that the performance of these businesses recovers and in implementing our plans to deliver stronger, more profitable, resilient and desirable businesses. A key element of this work has been to put in place strengthened leadership and management at both businesses. Robert Cook joined TGI as chief executive at the beginning of December 2019 with a remit to focus on growth through improved customer experience, operational excellence and accelerated evolution of the business, with profitable growth, to adapt to evolving market conditions and customer expectations. We are confident that Robert and the strengthened team that he has assembled will revitalise and grow the TGI brand and business. I would thank Karen Forrester, the outgoing chief executive of TGI, for her long and significant contribution to the business, and wish her well.”

PizzaExpress to close original ZA site; plans new location: PizzaExpress is to close the debut site under ZA, its spin-off concept centred around pizza slices, which it opened earlier this year, near Fenchurch Street Station, London, Propel has learned. It is understood that the company is committed to the more food-to-go focused concept and will continue with it in a new location. The company is to convert the Fenchurch Place site back to a core PizzaExpress restaurant under its new branding. The ZA model offers food to go and dine-in. Managing director Zoe Bowley previously said that if it proves a success the group would look at both converting existing restaurants and acquisitions for the new brand. The venue opened in Fenchurch Place offering coffee and pastries from 7am and pizza by the slice from lunchtime until ‘late’. Pizza options include the Za-gherita, American Hot, Padana, Pollo Ad Astra and the Vegan Giardiniera. Other new hot items include two daily changing soups and ‘luna bread’, freshly baked pizza dough filled with ingredients such as egg, spinach and ham. Earlier this month, Hony Capital, the China-based owner of PizzaExpress, bought back £72m of the company’s debt. Hony has acquired £71.9m of unsecured bonds at a price of 40p in the pound. The move comes as PizzaExpress struggles to repay £1.1bn of loans amid spiralling losses. Of these, £660m is owed to bondholders. The first tranche of senior bonds – amounting to £460m – is due to be repaid by August 2021, while the junior bonds – amounting to £200m – are due to be repaid by August 2022. Propel understands that while PizzaExpress sees Hony getting out its chequebook to buy back some of the debt as a positive move, it acknowledges there’s still a long way to go. Last month PizzaExpress reported like-for-like sales in the UK and Ireland fell 1.1% for the 13 weeks to 29 September 2019.

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