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Tue 21st Jan 2020 - Update: SSP trading, CMA invites comments on Stonegate/Ei Group pub sale remedy, Itsu plots stock market float
SSP reports like-for-likes up 1.2% in first quarter, acquires German company Station Food: SSP Group, the UK-based transport hub foodservice specialist, has reported like-for-like sales increased 1.2% for the 13 weeks to 31 December 2019, with total group revenue up 7.5%. The company has also announced the acquisition of Station Food, a subsidiary of Germany’s national railway company Deutsche Bahn AG, which will add 28 new food and beverage units at railway stations in Germany to its portfolio. The deal includes food courts at Berlin, Cologne and Karlsruhe railway stations, which feature international brands such as Burger King, Costa Coffee and Pret A Manger, as well as a wide range of local concepts such as currywurst specialist Curry 36 and seafood restaurant Gosch Sylt. The move marks the latest acquisition by SSP in Germany and follows on from the group’s purchase and integration of travel catering business Stockheim in 2018. SSP stated: “SSP has had a good start to the new financial year with further encouraging progress on its strategic initiatives and unchanged profit expectations for the full year. Overall like-for-like sales growth was in line with our expectations, with the external headwinds noted in the second half of last year continuing, as anticipated, into the first quarter of this year. Like-for-like sales growth in the UK and North America remained robust, driven by increasing passenger numbers. Like-for-like sales in continental Europe have been affected by the transport strikes across France during December. Like-for-like sales growth in the rest of the world included, as expected, a full quarter's impact of the disruption in Hong Kong, but benefited from an improving trend in India. Looking forward to the full year, our expectation for like-for-like sales growth for the group remains unchanged, at just below 2%. Net contract gains remained strong in the first quarter, at 6.3%, driven by the significant new contract openings last year, including in continental Europe, at Montparnasse Railway station, the new motorway service stations in Germany and the Starbucks units in railway stations across the Netherlands; in North America, at Seattle, Oakland and LaGuardia airports; and in the rest of the world, at Cebu airport in the Philippines and Bangalore airport in India. The pipeline of new contracts remains encouraging. Following the recent announcement of the acquisition of Red Rock's operations in Perth and Melbourne Airports in Australia, we are today announcing the proposed acquisition of Station Food in Germany. Once fully operational in 2021, Station Food will add 28 new food and beverage units at railway stations in Germany and is expected to contribute approximately £10m to SSP's revenue in 2020. Including this acquisition, our expectations for net gains for the full year have increased to about 5%. Looking forward to the full year, we remain confident of delivering another year of strong growth, in line with our expectations. Whilst a degree of uncertainty always exists around passenger numbers in the short term, we continue to benefit from the structural growth opportunities in our markets and to create further shareholder value.”

CMA invites comments over Stonegate's proposal to sell 42 pubs as part of £3bn Ei Group deal: The Competition and Markets Authority (CMA) is inviting comments on Stonegate Pub Company’s proposal to sell 42 sites to address concerns over its £3bn acquisition of Ei Group. The 30 freehold and 12 leasehold sites, which consist of 32 Ei Group-owned properties and ten Stonegate, are set to be sold in a maximum of three packages. The CMA previously said does not have UK-wide competition concerns but said the deal “could damage competition in 51 local areas”. Now the CMA is inviting comments on the proposal. It stated: “On 6 December 2019, the CMA announced it would refer the acquisition for an in-depth investigation unless Stonegate offered acceptable undertakings to address the CMA's concerns. To address the CMA's concerns, Stonegate has offered a structural divestment of either the individual pub on which a particular catchment area was centred (the centroid pub) (26 instances); or the entire overlap of the other party (25 instances) individually. In total, this would amount to the divestment of 42 sites to solve the realistic prospect of a significant lessening of competition in 51 local areas. On 20 December 2019, the CMA announced it would look in detail at these undertakings. The CMA has until 19 February 2020 to consider whether to accept the undertakings, or a modified version of them. As part of this process, the CMA is now consulting publicly on whether the proposals are sufficient to address the CMA's competition concerns. Before reaching a final decision, the CMA is therefore inviting interested parties to make their views known. The deadline for responses is 5 February 2020.”

Itsu plots stock market float to fund major US expansion: Julian Metcalfe, a co-founder of Pret A Manger, is plotting a stock market float of his healthy Asian food chain Itsu to raise cash for a major US expansion. Metcalfe, who co-founded Pret in 1986, said he wants to open 1,000 new Itsu stores in the US over the next few years. He told Market Watch: “We will float Itsu, as we have to, for it to grow to 1,000 stores over the next few years. Talks are at an early stage. We are talking to people who share our 20 to 30-year view of the business expanding across the whole of the US. We will float Itsu on a stock market within the next five years.” It is not known whether a listing would be in America or Britain, where Itsu has more than 70 sites. Metcalfe, who has a 54% stake in the business, opened the debut outlet in west London in 1997. The first American Itsu is open in New York and construction for a second, in Wall Street, will start in the summer. Metcalfe said: “Forget Pret, this is the next big thing. When you travel in Japan, food is so nutritious it’s glorious. They are so far ahead – I’ve always been inspired with what they eat. We have a 45% profit margin, so it has fast-food margins, which is rare. But 1,000 stores is not going to happen without a partner.” In September, Itsu reported like-for-like sales were up 7.2% in the first half of 2019, with the UK business “well on the way” to reaching break-even net profit by the end of the year. The progress was revealed as accounts for the year ending 28 December 2018 showed turnover increased to £116.6m, compared with £105.6m the previous year. Group Ebitda was up 60% to £4.1m, compared with £2.6m the year before. Like-for-like sales increased 3.6%. Operating losses were down to £5.9m, compared with £8.2m the previous year while pre-tax losses fell to £6.0m, compared with £8.9m the year before. Metcalfe made £50m when he sold a third of Pret to McDonald's in 2001, before offloading his remaining stake in 2008. Pret is now owned by JAB Holdings. 

Hollywood Bowl bosses transfer shares worth £9m to wives: Three of Hollywood Bowl's bosses have transferred stock worth £9m at current prices to their wives. Stephen Burns, chief executive of the ten-pin bowling alley operator, has given one million shares to his wife, Abigail Ashby-Burns. The couple have 3.6 million shares in total, or about 2.4% of the company, in a stake that is worth £11m. Burns has been at the helm of the company, which is planning to trial several mini-golf centres this year, since 2014. Finance boss Laurence Keen has transferred one million shares to his wife Pippa Keen, while technology and marketing head Mat Hart handed one million to his wife Denece Hart. The Keens have 1.7 million shares, worth £5.2m and 1.2% of the company. The Harts' entire holding is worth £3m, or one million shares, according to Reuters data.

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