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Wed 8th Jan 2020 - Propel Wednesday News Briefing

Story of the Day:

Barkby Group adds three pubs to estate, completes Workshop Coffee deal: Premium gastro-pub operator Barkby Group, which was admitted to AIM on Tuesday (7 January), has added a further three pubs to its portfolio. The company was formed in 2018 following the acquisition of three-strong Cotswolds-based hospitality group Turf To Table, while Barkby also acquired The George in Burpham, near Arundel, West Sussex, at the end of that year. Barkby, which had a market capitalisation of £40.6m on admission to AIM, has now added the Queens Arms in East Garston, near Hungerford, and the Rose & Crown Inn in Ashbury, near Swindon, to its portfolio. The group, which raised estimated net proceeds of £4.4m pursuant to its placing and subscription, also said it is in exclusive negotiations to acquire the freehold of The Star Inn at Sparsholt in Oxfordshire for £1.2m, which would take Barkby’s estate to seven gastro-pubs offering 65 rooms in total. Barkby Group announced on Monday (6 January) it had completed the reverse takeover of a group of companies controlled by the Dickson family, including coffee roaster and wholesaler Workshop. It is led by executive chairman Charles Dickson, son of Peter Dickson, great-grandson of the founder of Yates’s, who was chief executive during the growth of the pub chain between 1984 and 2001, taking it public in 1994. Dickson has become executive chairman of the enlarged group. Workshop Coffee, which was founded in 2011 and has four sites in London plus a wholesale business, will continue to be led by James Dickson, Charles’ brother. Barkby Group said it saw “significant opportunity” to grow the Workshop Coffee business organically by way of acquisition and to expand abroad using an overseas distribution model and a franchise model.

Industry News:

Propel and Elliotts launch second Leadership Summit: Propel is launching the second Leadership Summit, which will see a select group of the sector’s most experienced bosses share their expertise on leadership. The full-day event, in partnership with Elliotts, will take place on Wednesday, 12 February at One Moorgate Place, London, and is open for bookings. Ken McMeikan, Moto chief executive, will talk about creating a winning culture and making a difference to society; Alexa Reid, Noble Organisation managing director, will set out her approach to empowering individuals to create a cohesive team; Shamil Thakrar, Dishoom co-founder, will present on creating culture at Dishoom; Chris Jowsey, Admiral Taverns chief executive, will set out his thoughts on the importance of being open in a changing world; Emma Woods, Wagamama chief executive, will talk about  the role of leadership in innovation; Jonathan Arana Morton, The Breakfast Club co-founder, will talk about taking the legwork out of leadership; Jonathan Recanti, Farmer J co-founder, will explain the importance of  starting with a great idea; Alistair Darby, SA Brain chief executive, will provide leadership lessons from a Playbarn; Penny Manuel, Soho Coffee managing director, will argue that women make better leaders than men; and Shane Kavanagh, Crussh chief executive, will set out the leadership lessons learned from extensive change. Propel managing director Paul Charity said: “With the industry facing such challenging times, effective leadership has never been more important. This is an unmissable opportunity to learn from high-profile leaders in our sector.” Prices are £295 plus VAT for Premium members, £345 plus VAT for operators and £445 plus VAT for suppliers. To book, email

CAMRA – Welsh government’s additional business rates support a ‘sticking plaster’ as pubs need more help: The Campaign for Real Ale (CAMRA) has said the Welsh government’s additional assistance with business rates is merely a “sticking plaster” as pubs need more help. Finance minister Rebecca announced the Welsh government’s high street and retail rate relief scheme would be extended for 2020-21. Business properties with a rateable value up to £50,000 can receive up to £2,500 towards the cost of business rates under the £24.2m scheme. However, CAMRA has called on the Welsh government to go further and set up a support scheme specifically to help pubs burdened by business rates. CAMRA wants to see a specific fund for pubs, which already operates in England. Chris Charters, CAMRA director for Wales, said: “While any reduction in costs for businesses under the extended high street and retail relief scheme is welcome, moves like this are only a sticking plaster. We need a complete review of the business rates system in Wales to help give pubs a fair deal and save them from closure. In the meantime, CAMRA would like to see a permanent scheme put in place by the Welsh government to cut business rates bills for pubs to keep them open, alive and thriving.”

UK hotels face tough year while operators should target 20% profitability from F&B, says HVS: UK hoteliers face a tough 2020 as growth in the number of rooms leads to increased competition and dampens revenues despite strong underlying demand, according to hotel consultancy HVS. Russell Kett, chairman of HVS’ London office, said the pipeline of openings would continue to ramp up pressure on many hotels that had experienced a decline in occupancy and average room rates, “sometimes both”. He said once the current pipeline had worked its way through and post-Brexit demand levels had picked up, “positive growth should be seen as we move into 2021 and 2022”. Kett said strong demand for rooms in London in 2019 was likely to continue this year, especially at the “luxury end of the market”. HVS identified five key themes likely to have an impact on the sector – supplying a personalised offer; developing a relationship with guests; corporate responsibility; attracting and retaining staff; and maximising profitability. On the final point, HVS said hoteliers should seek a minimum of 15% but preferably 20% profitability from food and beverage operations, with underperforming hotel areas developed to provide “options that make money”. Kett said: “Whether a hotel gets a guest’s business depends on whether it provides an appropriate experience beyond the minimum expectation of a comfortable bed, decent shower, fast Wi-Fi and good value for money. Gen X and Gen Y travellers seek a more personal offer – an experience to remember they can’t get elsewhere.”

Company News:

Roxy Leisure receives £7.5m investment from Foresight Group: Roxy Leisure has received a £7.5m investment from private equity firm Foresight Group. Roxy Leisure operates sites under the Roxy Ball Room, Roxy Lanes and Roxy Arcade banners across the north and Midlands and is set for further expansion. Matt and Ben Jones launched the first Roxy site in 2013 and it operates eight venues across four cities – Leeds, Liverpool, Manchester and Nottingham. The sites provide a range of entertainment including pool tables, ping pong, bowling, shuffleboard, mini-golf, arcade gaming and karaoke. The investment will be used in part as growth capital to support the company’s expansion into additional locations in the UK, with multiple openings planned for 2020 including Birmingham and second venues in Manchester and Nottingham. Foresight investment manager Rob Jones said: “Roxy demonstrates some of the most attractive leisure sector performance metrics we’ve seen and the growth of the business in recent years has been impressive. The company is well positioned to accelerate its growth with the additional support and guidance Foresight will bring. Matt and Ben have built a successful business with a good corporate culture and we look forward to working with them to take Roxy through the next stage of its growth.” Matt and Ben Jones added: “It has been a pleasure working with Foresight’s experienced investment team, which understood our business quickly and demonstrated a strong appetite to support our plans. Its pragmatic approach and experience in working with businesses and management teams in our sector made it stand out as the right investor for us.” In September, Propel revealed Foresight Group was in advanced talks to invest in Roxy Leisure. The business was working with advisory firm Sedulo to review its options as it looked to secure new investment. Foresight Group backs other sector companies including Nottingham-based coffee roaster and retailer 200 Degrees and Indian street food concept Mowgli.

NZR Group creates management roles to support Chotto Matte expansion: NZR Group, the Kurt Zdesar-led business that operates the Chotto Matte, Black Roe and Fucina brands, has filled four management positions created to support its international growth plans. John Darling has joined as group head of operations, while Peter Boswell has been appointed group learning and development manager. Grace Ryan has joined as events sales manager, while Siim Kutser is guest experience manager. NZR Group managing director Paul Sarlas said: “The four roles we have created set the stage for our 2020 growth, which will see our hero brand, Chotto Matte, at the heart of the plan. The Chotto Matte brand will replicate its success in the managed arm of the business in the UK, US and Canada through a franchise model next year and, with NZR growing its team, we now have a solid platform in which to grow the business.” 

Market Halls closes food hall concept at £72m Intu Lakeside extension: Market Halls has closed the concept it launched in July as part of the £72m leisure extension at Intu Lakeside. The Hall was the company’s debut concept at a shopping centre and its first food hall outside London. A Market Halls spokeswoman said: “We were very excited about the promise of the expansion plans at Intu Lakeside but due to a variety of reasons, including delays to the opening of other key tenants, we never saw the levels of footfall required to sustain a business of our nature. All staff were correctly informed and consulted on a one-to-one basis about the closure and offered positions within the business. The management team and more than 50% of staff are coming to work within other areas of the business in central London. Understandably, the commute was too much for some. The team were paid salaries owed, holidays and an extra notice amount.” An Intu Lakeside spokesman said: “The Hall’s decision to cease trading was a commercial one taken by the business’ owners. Footfall at the centre has been really positive and thousands of people enjoy the new leisure facilities at The Quay every day.” 

Amber Taverns to open Hogarths site in Rochdale: Community pub operator Amber Taverns is to open a site for its Hogarths brand in Rochdale, Greater Manchester. The company has acquired a former Royal Bank of Scotland branch in The Butts and will invest £1m in a refurbishment that will see original features retained and enhanced and the bank’s vaults turned into private seating areas. The group also plans to create a large beer garden, with all work scheduled to finish in April. Property director Sam Frankland told the Manchester Evening News: “This is a first-class building in a great location so we were keen to get our hands on it. We were attracted to Rochdale by all the investment going on with the shopping and leisure development. The night-time economy is also building up in the area and the council clearly understands the importance of that.” Amber Taverns operates circa 15 sites under its Hogarths brand and owns more than 140 pubs across England and Wales.

Ego lines up former M&B pub in Amersham for next opening: 3Sixty Restaurants, led by James Horler, has lined up its latest Ego site as part of its joint venture with Mitchells & Butlers (M&B), in Amersham, Buckinghamshire. The Pomeroy in White Lion Road will reopen in late February or early March to become the 21st Ego site in total and ninth under the M&B partnership. Last year Horler told Propel M&B sites converted to Ego were seeing an average 80% uplift in sales. He said the business was aiming to add another two sites in the first quarter of 2020. M&B formed the partnership in August 2018 when it bought sector investor Luke Johnson’s minority share in 3Sixty.

Koko owner vows to get blaze-hit venue’s redevelopment ‘back on track’: Olly Bengough, owner of independent Camden music venue Koko, has vowed to get redevelopment of the iconic north London venue “back on track” following a devastating blaze. Koko closed in March to undergo a £40m transformation into a “360-degree experience”, which included renovation of the rooftop. However, Koko’s iconic dome was destroyed during the fire, which broke out just before 9pm on Monday (6 January). Firefighters brought the blaze under control at about 2.30am on Tuesday. Bengough said: “The amount of support we have received from the public has been amazing and we’ll be doing our best to get the redevelopment of this iconic building back on track.” Koko was set to reopen in the spring as a multi-media venue combining music, food and entertainment comprising six live performance areas, a radio station and broadcast studio, three restaurants, a rooftop conservatory and terrace, an “immersive retail experience” and a penthouse rehearsal and recording studio. Previously known as Camden Palace and Camden Hippodrome, The Rolling Stones and The Clash are among the stars to have performed at the venue.

Adara Group to launch Apple Butter Café dessert concept in Covent Garden: Qatar-based hospitality company Adara Group is to launch dessert concept Apple Butter Café in Covent Garden. The venue will open at the former Balans Soho Society site in Monmouth Street, Seven Dials, offering speciality coffee, Middle Eastern desserts and freshly baked pastries alongside lunchtime salads and sandwiches. The 65-cover venue will feature an Instagrammable apple tree at its centre with a terrace at the front. The menu will include goat labneh salad, chicken yakitori and the signature Lotus Flower dessert, which is filled with chocolate ganache and chocolate chips and topped with ice cream and caramel sauce. The concept is the brainchild of Middle Eastern-born brothers Saleh and Mohammad Alayan alongside Faycal Abdel Khalek, with the trio having many years’ experience in the hospitality business. Adara Group operates a number of coffee shops in the Middle East. 

Kentish Town brasserie and wine bar Patron Cave à Manger to start expansion: Kentish Town brasserie and wine bar Patron Cave à Manger is to start expansion by opening a second site in north London, in Finsbury Park. The venue will launch in Blackstock Road next month offering classic French wine and dishes. A spokesman told Hot Dinners: “We are excited to join the small independent shops and business owners in the vibrant heart of Blackstock Road.” 

Hakkasan to close Houston site: UK-based Hakkasan Group is to close its Yauatcha site in Houston’s Galleria next month – three years after it opened. About 80 members of staff will lose their jobs. A spokesman said: “We have made the difficult decision to close our Galleria location and will officially cease service on 16 February. We look forward to welcoming Houstonians in their travels to our other Yauatcha restaurants globally.”

Brew by Numbers closes crowdfunding campaign after raising more than £560,000: London-based craft brewer Brew by Numbers has closed its fund-raise on crowdfunding platform Crowdcube after raising more than £560,000 to move to a new site and add two taprooms to its estate. Brew by Numbers, founded in 2012 and led by Tom Hutchings, set an initial £400,000 target and was offering 7.55% equity in return for investment, giving the company a pre-money valuation of £4.9m. In total, 548 investors pledged £564,300 and the campaign has now closed. As well as its brewery in Bermondsey, the business runs three taprooms in the area. The pitch stated: “We want to move to a larger production site in south east London with a dedicated taproom. We will convert our current brewery in the heart of Bermondsey to a tank bar with pilot kit, serving our beer alongside curated barbecue food. We will invest in brewery equipment to take our beer to the next level and expand our barrel-ageing programme in Peckham.”

Moose Coffee makes Yorkshire debut with Leeds launch: Moose Coffee, the American diner-influenced cafe company, has opened its first site across the Pennines, in Leeds. The group has opened a site in the city’s Bond Court to add to its three sites in Liverpool and two in Manchester. Moose, which was founded by Nick and Kathy van Breemen in 2006, also operates Malmo café in Liverpool’s Hanover Street as a partnership with two former employees. 

Waka secures third London site: Nikkei fusion restaurant Waka has secured a third site in the capital. The company, which is led by siblings Irakli and Nino Sopromadze, will open at 3 Thomas More Street, near St Katherine Docks, this month. Last year the company launched a takeaway-only outlet at a former Ladbrokes betting shop in Houndsditch. Waka launched in Eastcheap in the City in 2017 before moving to White City last year. Nikkei began its evolution in Peru in the late 1800s, when settlers from Japan – known as Nikkei – adapted their home cuisine using local ingredients.

Yum China and Universal sign Beijing theme park partnership featuring new KFC offshoot: Yum China Holdings and Universal Beijing Resort have signed an eight-year strategic partnership to provide “entertainment and dining experiences across China”. Yum China is the largest company in the country in terms of restaurant numbers, with 8,000 sites across its KFC, Pizza Hut and Taco Bell brands, and 230 million digital members. Both parties will work together on marketing activities at the Universal Beijing Resort theme park, which is due to open in 2021. Yum China will also launch restaurant brand KPRO at Universal CityWalk Beijing – the theme park’s retail, dining and entertainment complex. KPRO has been developed by KFC China and will offer a “fresh, seasonal menu and a design on the theme of Colonel’s Green Kitchen”. Yum China chief executive Joey Wat said: “We are excited about the potential of combining the power of our iconic brands, food innovation capabilities and digital ecosystem with Universal’s globally recognised entertainment expertise and assets.”

Starbucks adds plant-based milk alternatives to menu: Starbucks has launched three drinks containing plant-based milk alternatives as part of its latest winter menu. Almond Milk Honey Flat White and Coconut Milk Latte are available in the US and Canada, while Oat Milk Honey Latte has been launched in 1,300 stores in the US Midwest. Oat milk will also be available in the participating stores in Illinois, Indiana, Iowa, Michigan, Minnesota, Missouri and Wisconsin as an additional non-dairy option. Oat milk has been available in Starbucks’ European stores for the past year. Starbucks product developer Raegan Powell said: “Customers are looking for more ways to personalise their beverages. We love how the nuanced flavour you get with plant-based milk pairs with espresso, hot or iced.”

Filipino-inspired neighbourhood restaurant to launch debut standalone site, at Brixton Village: Filipino-inspired neighbourhood restaurant Sarap Sarap will open its first standalone site, at Brixton Village this month. Ferdinand Montoya will launch the venue on Thursday, 30 January after taking top prize in the Brixton Kitchen competition last year. The venue will offer about 25 covers including outdoor seating with a menu of sharing plates centring on speciality dish lechon liempo. Sarap’s take on the classic Cebu dish will feature slow-roasted pork belly rolled and stuffed with ginger, garlic, chilli, coconut vinegar and soy sauce. The drinks list will focus on low-intervention wine, craft beer and batched cocktails. Montoya said: “After three successful residencies we are excited to have found a site in Brixton Village to settle in. This will allow us to have a base where we can progress and spread our wings.” Brixton Village owner Hondo Enterprises launched Brixton Kitchen to nurture local talent.

National Park boutique inn brought to market for £1m: A boutique inn in the South Downs National Park has gone on the market for £1,050,000. Owners Chris Cooper and Rachel Jameson have instructed agent Fleurets to market the Village Inn in Buriton, Hampshire. The inn was built in the late 19th century and has 16 rooms that were refurbished in 2016. There is also a lounge/bar with seating for 20, a 40-cover restaurant, terrace and manager’s apartment. Nick Earee, of Fleurets, who is handling the sale, said: “This boutique inn has strong profit performance. For the year ending December 2018, net turnover was £396,000 and an adjusted net profit of £105,000. However, there’s still scope for further growth and increased revenue.”

Dash Water raises £1.6m in new funding: British soft drinks brand Dash Water has completed its Series A funding round, resulting in £1.6m of new investment. Dash Water is a British sparkling water that uses British fruit and vegetables that would usually go to waste and contains no sugar, calories or sweeteners. Since spotting a gap in the market in June 2017, founders Jack Scott and Alex Wright sold more than 2.3 million cans of Dash Water in Europe last year. Having just finished their second year of trading, Dash Water is available in more than 500 UK on-trade accounts including Soho House, Zizzi and M&B brand All Bar One. Wright said: “We are excited to take the business to the next level. The money raised will enable us to expand further across the EU.”

Tyrrells reduces losses: Premium snack business Tyrrells has significantly cut pre-tax losses. The business, which was founded in 2002 and is headquartered in Leominster, Herefordshire, has reported pre-tax losses of £9.3m for the 65 weeks to 31 March 2019 after reporting losses of £35.6m in the prior 52 weeks. New documents for Tyrrells Potato Crisps also revealed it achieved a turnover of £53.1m in the 65-week period. In the previous year its turnover topped £62.9m. The crisp brand was acquired for $1.6bn (£1.1bn) in December 2017 by chocolate-maker Hershey after it was sold by fellow US company Amplify Snack Brands. The business was then bought by the maker of Hula Hoops in May 2018 for an undisclosed sum. A statement signed off by the board said the decline in turnover was because of “deflationary consumer markets in the UK and the exit from a number of private label contracts”. The company blamed the fall in gross profit from £18m to £11m on “increased pressure in the market driving additional promotional spend”, while the pre-tax loss for the period was because of “large one-off costs in the period”.

Sky offers licensees chance to create free TV advert: Sky is offering its licensed trade customers an opportunity to create a free television advert exclusively for their business. Sky is running a competition throughout January with customers able to enter online and request a free point of sale pack. The winning venue will be chosen at random and notified by 7 February. Sky will create the winner’s advert, which will air on a selection of Sky’s AdSmart channels in March. AdSmart allows different adverts to be shown to different households watching the same programme. This means pubs can advertise on national channels to relevant audiences in their area. Tracy Harrison, director of marketing at Sky Business, said: “We are offering free, targeted advertising space across Sky’s channels worth thousands of pounds.” Meanwhile, Sky Business has appointed Simon Raggett as managing director. He joined Sky in early 2012, holding several key leadership roles, while previous jobs include vice-president of operations at Starbucks, head of retail franchise at O2, and director of franchise at Pizza Hut UK & Ireland. Raggett succeeds David Rey, who has moved to Sky’s Broadband and Talk business.

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