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Morning Briefing Strap Line
Wed 7th Apr 2021 - Update: Tasty, Deliveroo, Time Out, covid passports, Marston’s et al
Kaye brothers to step down from Tasty board, company continuing to work on various strategic options available: Wildwood operator Tasty has said brothers Adam and Sam Kaye, who played key parts in the creation of the business, in which they hold substantial stakes, are to step down from its board to “focus on their other commercial interests”. The company, which reported its full-year revenue fell to £24.2m (2019: £44.6m), after being “significantly impacted by covid-19 related restrictions”, said: “As previously announced, Adam Kaye stepped down from the board on 15 September 2020. In addition, the board is sad to announce Samuel Kaye will be stepping down as non-executive director following the 2021 annual general meeting (date to be confirmed). Samuel stepped down as joint chief executive to become non-executive director in December 2020 and both Adam and Samuel are leaving the board to focus on their other commercial interests. The board regrets they are departing and would like to thank both of them for the enormous support and invaluable experience they have provided to the board from the group's inception and will continue to provide on an ongoing basis as substantial shareholders. The board has commenced the search for an additional independent non-executive director and an announcement will be made, as appropriate.” Meanwhile, the company said it was continuing to work with advisers, KPMG, to assess the potential impact of covid-19 on the business and the various strategic options available to the group. It said: “With the progress made on consensual negotiations with landlords and other creditors, the group has to date managed to prevent a company voluntary arrangement (CVA). However, with dine-in restrictions in place until May 2021, there is additional pressure on cash reserves. The board will continue to explore all options but are hopeful with continued creditor assistance, a more formal procedure may be avoidable.” The company said in the year to 27 December 2020 its adjusted Ebitda loss stood at £1.5m (2019: profit £1.1m), with its pre-tax loss widening to £12.7m (2019: loss of £0.3m). Chairman Keith Lassman said: “Following the sale of More London Dim T for £2m in January 2020, we repaid our bank loan and were fortunate to have no banking covenant pressure when we shut our estate in March 2020. As previously communicated, cash preservation has been key to maximising the group's ability to manage the impact of the pandemic. With lockdown continuing into this year, in January 2021, the group drew down its £1.25m, four-year term loan from its existing bankers, Barclays Bank, secured in September 2020, in order to strengthen its balance sheet and provide additional working capital. In common with much of the UK hospitality industry we have where possible, utilised the various government support schemes, including furloughing our staff during periods of full or partial closure, VAT reductions and business rate holidays. Sadly, as previously announced, we had to make a significant part of our workforce redundant to preserve the business for our remaining stakeholders, including our current employees. While the economic and retail environment continues to be challenging, trading in between lockdowns and restrictions has been encouraging. We currently have 38 restaurants open for takeaway only. With the bank facility and continued support from our creditors and landlords, we expect to get through these difficult times due to our responsiveness and restructured operational base. Cash preservation and maintaining our staff and customers’ well-being continues to be paramount. We believe the lessons we have learnt over the past 12 months have strengthened our operating model. We have found new ways of operating the business and have become agile at adapting to the current conditions. This includes new delivery partnerships, which we envisage will continue in the future. Having survived the turmoil of the past 12 months, and as we come out of this pandemic and restrictions are lifted, we are confident we are in a good position to service the pent-up customer demand and take advantage of the reduced competition.” The group said it had now successfully achieved consensual lease concessions and rent reductions to March 2021 on more than two-thirds of its estate. It said it was continuing negotiations with landlords and other creditors regarding outstanding debts. Lassman said: “Given the current third lockdown and the moratorium expected to end in June 2021, we now anticipate we may require further landlord support. The board believes with continued creditor assistance, a more formal procedure such as a CVA may be avoided but we continue to consider all options.” The group said the pandemic accelerated the decision to surrender two restaurants – Oakham Wildwood and Letchworth Wildwood.

Propel Premium now available to companies for an unlimited number of staff for £895 plus VAT per annum: Companies can now have an unlimited number of people receive access to Propel Premium for a year for £895 plus VAT – whether they are an operator or a supplier. The regular single subscription rate of £395 plus VAT for operators and £495 plus VAT for suppliers remains the same. Propel managing director Paul Charity said: “Propel Premium is becoming an invaluable learning and insights resource to the sector. We will be broadening our library of videos over the coming weeks with further sector leaders sharing their expertise on a variety of subjects.” Premium subscribers already receive access to Propel’s library of lockdown videos and Friday Wrap interviews. Subscribers receive a password that allows them to watch the interviews on demand. They feature industry leaders such as The Restaurant Group chief executive Andy Hornby, PizzaExpress managing director Zoe Bowley and Rekom UK chief executive Peter Marks sharing their lessons of lockdown. Meanwhile, guests on the Friday Wrap discussing their views on the sector include UKHospitality chief executive Kate Nicholls, Greene King chief executive Nick Mackenzie and sector investor Luke Johnson. Subscribers also receive exclusive access to the Propel multi-site operator database, which was fully updated and released last week. The exhaustive database of businesses, which comprises 1,628 companies, is the most comprehensive multi-site operator information in the sector – and reflects the tumultuous changes of the past year with several hundred businesses disappearing and replaced by several hundred new ones. A new multi-site database will also be sent to Premium subscribers at the end of each month with a report on new companies and changes in the multi-site universe. 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. Propel Premium subscribers 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 Propel insights editor Mark Wingett. Email to sign up.

Goldman Sachs propped up Deliveroo IPO with £75m investment: Goldman Sachs pumped tens of millions of pounds into Deliveroo shares in order to prop up trading of the takeaway app, after investors shunned its market debut. The investment bank bought about £75m of Deliveroo shares – equivalent to a quarter of stock traded in the first two days after the London listing, the Financial Times (FT has revealed. Deliveroo shares slumped 30% on its debut to the London Stock Exchange, with concerns over working conditions for its riders being cited as one of the reasons investors avoided Deliveroo. According to the FT, the move should have banked a profit for Goldman when used in combination with the “overallotment” reserved for stabilising the initial public offering (IPO). However, the profits will be surrendered to Deliveroo as part of an agreement between the two companies, which was not disclosed in the company’s IPO. Today (Wednesday, 7 April) marks the first day retail investors can cash out of their investment – albeit at about 28% below the IPO price. According to Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, customers’ inability to cut their losses and sell could encourage a greater flight from the shares when customer investors are finally able to make a move today.

Time Out Market Dubai opens: Time Out Market Dubai opens to the public today (Wednesday, 7 April). It is opening in partnership with Emaar and is set to be the biggest culinary and cultural destination to launch in the UAE. Located in Downtown Dubai's Souk Al Baharat and spread across 43,000 square foot, the location has scenic views from the 3,000 square foot wraparound outdoor terrace. The market will offer home-grown culinary delights by 17 award-winning chefs and restaurateurs, three bars and cultural and entertainment spaces. This marks the group's seventh market to open and subject to any further covid-19 related delays, the current planned timings for additional markets are Porto (2022), Abu Dhabi (2023) and Prague (2025). It is also anticipated the group's markets in Boston, New York, Chicago, Montreal and Lisbon will reopen over the course of the second quarter in line with local guidelines, joining Miami, which is currently open. The seven Time Out Markets now offer food from about 140 of the best chefs of these cities, occupying almost 230,000 square foot and accommodating more than 4,500 seats.

Reilley – covid passports are an assault on our civil liberties and are yet another kick in the guts for hospitality: The proposed introduction of covid status checks for customers entering pubs, bars and restaurants is “undemocratic and potentially incredibly discriminatory”, Loungers chairman Alex Reilley has said. He added the move would require a sector that has “suffered immeasurable financial losses through the past 15 months” to have to adhere to “yet another nonsense rule in order to operate as normal”. Talking to The Guardian, Reilley said: “This feels like a measure that is unreasonably targeting our sector. It [the government] is not proposing this to go into a supermarket.” He added the process of checking a covid health certificate would be easier at venues such as cinemas, theatres or sporting events, where tickets are inspected on entry. “Going to pubs, bars and restaurants is a much more informal, often off-the-cuff experience where people will just drop in and there isn’t a form of checking anything on the door,” Reilley said. Tim Martin, founder and chairman of JD Wetherspoon, criticised the suggestion vaccine passports could be used to allow venues to dispense with social distancing. Martin said: “Wetherspoon’s has no faith in this sort of trade-off or in any initiatives dreamt up on a daily or weekly basis, by a small group of ministers, under emergency powers, following discredited and counterproductive curfews, substantial meals, table service, moonshots and other idiocies.” Fuller’s believes a covid status scheme is “fraught with issues for the hospitality sector”, according to chief executive Simon Emeny. “It flies in the face of the whole ethos of a public house being one that is open to all, and it will create a superfluous potential point of conflict for our teams,” he said.

Marston’s secures waivers, to reopen circa 700 pubs on 12 April: Marston’s has confirmed it has secured waivers and amendments to its bank, private placement and securitised facilities for the financial periods up to and including 1 January 2022. The company stated: “Within the securitisation, Marston’s had strong support from bondholders who have approved waivers for the two-quarter tests to 2 October 2021 and the four-quarter test to 1 January 2022. The group's banks and private placement have approved the adoption of liquidity and quarterly profit covenants to 1 January 2022. This collaborative approach was helped by open and constructive dialogue in a period of great uncertainty and underlines the importance of good, long-term relationships with all our stakeholders. The group expects to reopen about 70% (circa 700) of its managed and franchised pubs in England with outdoor spaces on or around Monday, 12 April and, subject to final regulatory confirmation, the majority of our Scottish and Welsh pubs on Monday, 26 April. On the basis the stated reopening roadmap set out by the government is adhered to, the remaining managed estate in England should open on or around 17 May with restricted indoor trading, and we are assuming a return to normal trading conditions from 21 June.”

Pubs come first in rush for the door: Visits to pubs, bars and restaurants are the “overwhelming priority” for British consumers once restrictions are lifted, according to a new survey. With days to go until hospitality can reopen in the UK, a poll of 5,500 consumers in 11 countries by Jefferies, the investment bank, reported by The Times, found half of Britons planned to make a dash for the pub or a restaurant when the rules ease. One in five plan to head to the shops first, with one in ten planning a visit to the cinema or gym before anything else. Only the French and Japanese matched the British in their desire for a drink. The survey also found almost one in four Britons had increased their alcohol consumption during the pandemic, more than double the rate in other European nations.

New vehicle behind Fazenda brand acquires Birmingham site out of administration: Southern Wind Group, the newly formed company headed by the management team of the parent company behind the Fazenda brand, which acquired the bulk of the restaurant business via a pre-pack administration last month, has now completed a deal for the brand’s former site in Birmingham, Propel has learned. The restaurant in the city’s Colmore Row will now reopen with the rest of the hospitality industry from Monday,17 May after a deal was struck with the existing landlord. Southern Wind Group had originally secured 243 jobs when acquiring the Fazenda brand and its assets in early March, with the reopening of the Birmingham restaurant taking the total number of jobs saved to 286. Propel revealed last month Southern Wind Group had acquired the brand for a total consideration of £2.61m. Julian Pitts and Bob Maxwell, of Begbies Traynor in Leeds, were appointed joint administrators of City District, which traded as the Fazenda Rodizio Bar & Grill alongside sister brand Picanha by Fazenda, at the start of March. Southern Wind Group, which is headed up by City District’s former chief executive Terence Langley and managing director Tomás Maunier, originally retained the Leeds, Manchester, Edinburgh and Liverpool Fazenda sites. However, Fazenda Birmingham and Picanha Chester were not included in the deal and 69 staff were made redundant. Maunier said: “It's been an extremely tough few weeks, though we are delighted beyond words to have finally reached an agreement with the landlord and to be able to retain the jobs of our Birmingham team. Our priority as a business has been to save as many jobs as possible, so today is a day of huge celebration – one of those moments that makes you really happy as a business leader. Before the pandemic hit, the restaurant was trading exceptionally well and the team we have built has made a big impression on the people of Birmingham. The level of support and expression of disappointment at the closure news from both the business and wider community was incredible. That's why we knew we would have to return one way or another. We can't wait to reopen and give people the Fazenda experience they know and love.”

Online delivery marketplace offering home-cooked food from trained chefs closes crowdfunding campaign after raising more than twice £300,000 target: Online food delivery marketplace Cook My Grub, which offers home-cooked food from trained chefs, has closed its campaign on crowdfunding platform Crowdcube after raising more than twice its original £300,000 target. The company was offering 9.87% equity in return for the investment, giving a pre-money valuation of £3m. It has now closed the campaign, with 426 people investing in the business, raising £685,544. Cook My Grub is operating in Berkshire, serving customers in Maidenhead, Marlow, Slough and Windsor. Further rollout of the service is planned with launches in Reading, Swindon, west London and parts of the Home Counties through 2021. The pitch stated: “Finding time to cook is a luxury many people don't have. As a result, many people end up resorting to frozen meals. We believed a digital platform was needed to help those people connect with qualified home chefs. Cook My Grub was conceived to provide a healthy and sustainable alternative for people unable to cook wholesome meals at home. Each customer is presented with a wide selection of cuisines to choose from. These meals can be ordered on the day or pre-ordered several days or even weeks in advance. For home chefs, we set up their own ‘virtual restaurant’, which gives them the flexibility to decide when, what and how much they cook. The funds raised will be used to support further growth by increasing marketing, scaling-up operations and growing the technology teams.”

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