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Fri 26th Mar 2021 - Update: Bubblewrap, covid certification, Deliveroo and Safestay
Bubblewrap sets out ambitious rollout plan: London-based waffle cone concept Bubblewrap is to pursue an aggressive development plan across the UK and selected international markets in partnership with business developer Seeds Consulting, Propel has learned. Bubblewrap currently operates stores in Wardour Street and Covent Garden Market. Launched in March 2017 after testing the product in food markets across the capital, Bubblewrap instantly became a viral success. Initial Facebook videos created by Time Out and Buzzfeed amounted to 33 million views, 211,000 shares and 188,000 likes alone with the former being the highest performing Time Out London Facebook video in history. Bubblewrap founder Tony Fang said: “We operate in both the Capco and Shaftesbury estates successfully. We see a huge opportunity with other key landlords in shopping centres, high streets and leisure locations as they can benefit greatly from a unique and footfall-driving concept such as Bubblewrap. Before covid, our business was flying. This has allowed us to survive in spite of being located in central shopping districts, and we are now best positioned to take advantage of the new market conditions to scale our brand in the UK and in key regions like the GCC.” Seeds Consulting director Matteo Frigeri added: “We are excited at the prospect of rolling out Bubblewrap in the UK and internationally. The market is craving for a dessert concept that is both so social media friendly and scalable. What we have is labour-intensive concepts trading with a wide menu from large and thus expensive locations. Bubblewrap high-revenue, low capex model offers the concrete opportunity for a much quicker payback.” Bubblewrap waffles are made based on a secret Hong Kong batter recipe dating to the 1950s plus its secret twist.

Pubs could ask customers for blood tests to prove covid immunity: Millions of people who have recovered from covid-19 and developed immunity could be allowed into pubs, theatres and nightclubs under government plans for a coronavirus certification scheme, reports The Times. Venues will be allowed to dispense with social distancing if they limit entry to those who have had the virus, been vaccinated or have evidence of a recent negative test. The NHS app could be converted to become a digital covid certificate, allowing people to use their phone to prove they meet one of those criteria. People who have had coronavirus would be required to have an antibody test to show they possess sufficient immunity, which involves taking a sample of their blood for analysis. Scientists believe people who have recovered acquire natural immunity that can last for at least five months. Prime minister Boris Johnson said on Thursday (25 March): “I do think there is going to be a role for certification. There are three basic components. There’s the vaccine, there’s your immunity you might have after you’d had covid and there’s testing – three things that could work together.” Jonathan Van-Tam, the deputy chief medical officer for England, is understood to support the idea of using antibody tests as part of a certification scheme. However, the prime minister acknowledged there are “moral complexities” that need to be addressed and raised concerns about pregnant women and those with medical conditions who cannot be vaccinated. He suggested the introduction of the certificates could be delayed until all adults had been offered their first dose of vaccine, which is scheduled for the end of July. The government’s plans are similar to what happens in Israel, where people are given a green pass that allows entry to bars, hotels and swimming pools if they have been vaccinated or have had coronavirus. Early data suggests there has not been a significant increase in cases. Clive Chesser, chief executive of Punch Pubs, said: “The UK vaccination programme is a remarkable success story with almost 30 million people having already received their first dose, and with hospitalisations and deaths continuing to decline. This rate of progress leads us to remain confident the government will not deviate from its published roadmap, with a phased timetable for reopening culminating in the complete lifting of trading restrictions from 21 June. It is vital on so many levels that we do not deviate away from this critical goal. On the subject of a potential requirement for vaccine certification, we cannot see any logical reason for this to be introduced, and we consider the idea to be entirely impractical and unworkable in many ways. Now is the time to start focusing on reviving the economy and rebuilding confidence, not implementing further impractical measures.”

More big investors shun Deliveroo over workers’ rights: Six big UK investment firms have said they will not buy Deliveroo shares after concerns over workers’ rights. The delivery company hopes to be valued at up to £8.8bn when it lists its shares in April. But Aberdeen Standard, Aviva Investors, BMO Global, CCLA, Legal & General Investment Management (LGIM) and M&G said they were put off by factors including the working conditions of its riders and lack of investor power. Deliveroo said it had seen “significant demand” for stock with interest rising. Deliveroo riders are self-employed, meaning they are not entitled to earn a minimum wage from the company, or holiday and sick pay. Rupert Krefting, head of corporate finance and stewardship at M&G, said the company’s reliance on gig-economy workers made it a risk for investors. He pointed out that Uber had recently had greater legal rights enforced by the Supreme Court for drivers previously categorised as self-employed. LGIM said it was put off by an “unequal voting rights” structure. Deliveroo is planning to let its founder and chief executive Will Shu have more than 50% of shareholder voting rights. Phil Webster, a portfolio manager at BMO, said labour issues represented a “ticking bomb on the side” for Deliveroo, which contributed to making it “uninvestable”. Andrew Millington, head of UK Equities at Aberdeen Standard, told BBC Radio 4’s Today programme the conditions were a “red flag”, adding: “We wouldn’t be comfortable the way in which its workforce is employed is sustainable.” A report by the Bureau of Investigative Journalism – based on thousands of invoices from 300 Deliveroo riders – claimed one in three was earning less than the National Living Wage, which is currently £8.72 an hour. However, Deliveroo said the sample of 300 people was “not a meaningful or representative proportion” of their riders and that they can earn up to £13 an hour “at our busiest times”. Since losing a five-year legal battle with drivers who claimed it had wrongly classified their employment status, Uber has offered holiday pay, a guaranteed minimum wage, and pensions benefits to its drivers. Deliveroo has set aside more than £112m to cover potential legal costs relating to the employment status of its delivery riders. It warned potential investors of the risk of litigation around the world in documents setting out its plans for a stock market debut published on Monday (22 March). Deliveroo, which was founded in 2013, has said it will hand its riders bonuses of between £200 and £10,000 when it floats, depending on the number of orders they have delivered.

Safestay agrees £16m sale of Edinburgh hostel to address short-term capital need: London-headquartered hostel operator Safestay has entered into conditional sale and purchase agreements to sell the Edinburgh Hostel to A&O Hotels and Hostels for £16m. The figure, payable at completion, representing a 22% premium to the £13.4m book value. The 2019 annual Ebitda of the hostel pre-covid-19 was £1.7m. The company stated: “The group has responded to the pandemic and associated lockdowns across Europe by reducing the monthly cash burn of the business to £0.35m, which has significantly mitigated the impact of having to close the hostels. However, despite these measures, the extensions of the lockdowns, which have lasted significantly longer than first expected, means the company needs additional short-term capital. The board believes an asset disposal is the optimal approach for the group to raise new capital in the current market environment. The £16m offer for the Edinburgh hostel is an attractive solution. Part of the proceeds of the disposal will be used to reduce debt by 35% while providing the group with sufficient cash reserves for the next months. The board believes this is the best option to protect shareholders’ interests and place the company in a strong position for when the market recovers, new opportunities arise, and the company can again be cash generative.” The deal is subject to shareholder approval at a general meeting on 30 April.

Premium subscribers to receive most comprehensive multi-site operator database in sector on 31 March: An updated list of UK multi-site operators, the most comprehensive database in the sector, is almost ready and if you are a Propel Premium subscriber, the list will be with you on Wednesday, 31 March. A new multi-site list will then be sent to Premium subscribers at the end of each month with a report on new companies and changes in the list, which stands at 1,629 companies. It provides company names, the people in charge, how many sites each firm operates, its trading name and its registered name at Companies House if different, and what each business specialises in. In a new feature this year, there is a synopsis of what the business does and significant news associated with it. The list will then be updated at the end of each month. Being a Propel Premium subscriber not only entitles you to the most comprehensive list of businesses in the sector today; those signed up also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out, regular video content, and regular exclusive columns from Mark Wingett. An annual premium subscription costs £395 plus VAT for operators and £495 plus VAT for suppliers. Email anne.steele@propelinfo.com to sign up.

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