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Morning Briefing for pub, restaurant and food wervice operators

Wed 11th Aug 2021 - Update: Deliveroo’s First Half results, Market Halls crowdfunding
Deliveroo reports losses down as transaction value doubles: Deliveroo reduced its losses by 18% to £104.8m in its First Half to 30 June as gross transaction value jumped 102% to £3.385.8bn. The company said growth was materially ahead of expectations in its First Half – and consumer engagement post-reopening has been encouraging, with orders and average order value proving resilient despite restrictions easing. The company stated: “Deliveroo now has the most food merchants in the UK of all delivery platforms after adding further selection. UK expansion is ahead of plan with 72% population coverage at end-June versus initial target of 67% by year-end. (We have) strong rider satisfaction with 85% of riders globally saying they are satisfied or very satisfied working with Deliveroo – rider attraction and retention rates remain high despite rising job vacancies across economies. Continued investment in long-term differentiation of the consumer value proposition and in growing the monthly active consumer base, given clear evidence of a positive structural shift in consumer behaviour, and strong capital position following the IPO in March 2021.” Will Shu, founder and chief executive of Deliveroo, said: “We have reported strong performance in the first half of the year and continued to make good progress in executing our strategy. As a result, I believe that we are well positioned to take advantage of the huge opportunity ahead. We are seeing strong growth and engagement across our marketplace as lockdowns continue to ease. Demand has been high amongst consumers. We have widened our consumer base, seen people continuing to order frequently and we now work with more food merchants than any other platform in the UK. At the same time, more riders are choosing to continue to work with the company because they value the work we offer. As reflected in our guidance, whilst we expect that consumer behaviour may moderate later in the year, we remain excited about the opportunity ahead and our ability to capitalise on it.” The company added: “Overall, growth in H1 2021 was materially ahead of expectations. Consumer engagement has been encouraging despite restrictions easing, which demonstrates a continuation of the change in consumer habits that has been accelerated during the pandemic. In recent months, Deliveroo has not seen a material impact on orders and average order value in UK and Ireland despite restaurants reopening. In International, consumer engagement trends have also proved mostly resilient. In parts of Europe, there has been some evidence of a small to moderate impact from reopening, although the moderation in sequential growth is difficult to separate from the seasonal patterns at the beginning of the summer period. Deliveroo works with c.137,000 restaurant partner sites as of the end of H1 2021. Growth in restaurant selection increases availability and choice to consumers on a neighbourhood by neighbourhood basis, and in the UK Deliveroo now has more active food merchants than any other food delivery platform. As well as bringing partners’ existing restaurant sites onto the platform, Deliveroo has continued to develop Editions: delivery-only kitchens that offer restaurant partners an opportunity to bring their brands to new locations. During H1 2021, Deliveroo has further developed the Editions concept and continued to build a pipeline of sites to bring the best, exclusive restaurant content to a wider range of consumers.”

Two days until next edition of Propel Blue Book sent to Premium subscribers: The next edition of the Propel Blue Book of Turnover and Profitability for Premium subscribers is to be published at midday this Friday (13 August) and produced in association with Mapal Group. The Blue Book features 352 UK pub, restaurant, cafe and hotel operators with a total turnover of £29.6bn. The Blue Book, which is updated every month – on the second Friday of the month – provides an insight into UK operator turnover and profitability over five years, profit conversion and directors’ earnings. A total of 180 of these companies are now posting total losses of £5.95bn as the effects of the pandemic take hold. Meanwhile, on Friday, 30 July, Propel Premium subscribers received the updated database of multi-site companies for July, which is produced in association with Virgate. The latest edition of The Propel Multi-Site Database included 71 new companies, operating 477 sites between them, and increases the total number of companies on the database to 1,951. Subscribers received the database as a PDF and an Excel spreadsheet, they were also sent a 12,094-word report on the businesses added during July. The go-to database 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. In a new feature this year, there is a synopsis of what the business does and significant news associated with it. It is updated at the end of every month. Subscribers also received a new database on Friday, 30 July. The New Openings Database, produced in association with StarStock, focuses on the newly announced openings and upcoming launches in the sector and will be updated at the end of every month. Subscribers also receive access to Propel’s library of lockdown videos and Friday Wrap interviews and now also have access to a curated video library of the sector’s finest leaders and entrepreneurs, offering their insights on running outstanding businesses in the sector. 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. 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. Email to sign up.

Market Halls goes through crowdfunding target within a week of launch: Market Halls is now overfunding after breaking through its crowdfunding target of £600,000 within a week of the launch of the fundraising campaign. The business has so far raised just over £702,000 with 28 days of the fundraising campaign left. It includes an anonymous investment of £500,000 which is believed to be from new backer Gees Court Partners (GCP). The fundraising campaign gives the business a pre-money valuation of £30m. In June, four of the group companies launched CVAs which wrote down all debt. The CVAs were approved by 99% of creditors and unchallenged. The CVAs also led to a restructure of the business where the Try Market Halls Ltd group was sold to Market Halls Group Ltd, a new holding company owned 60% by GCP, 15% by management and the rest split between early investors. The company generated revenue of £15m in FY20 prior to the pandemic, of this, it said £10m was generated by its traders and £5m was generated by its bars. The group currently operates sites in Victoria, Oxford Street and Fulham, with a new site in Canary Wharf launching next year. Announcing the campaign last month, the company stated: “With over 2.3 million visitors across our three sites since opening in 2018, Market Halls was on track to grow revenue by 77% in FY20 prior to national lockdown. Now they are reopening their doors, with everything they had before and more, and ready to grow exponentially. The crowdfunding campaign is an exciting opportunity for fans of Market Halls and other investors to join the business on its journey to national success. With three gold-dust locations, an NPS (Net Promoter Score) score of 62 and 80% of their customers being repeat visitors, Market Halls is a clear market leader.” The company’s Victoria site alone produced turnover of £8.8m in its first year and produced Ebitda of £1.5m.

Coca-Cola bottles and cans the most prevalent litter on UK beaches: Coca-Cola bottles and cans were the most prevalent branded litter on beaches in the UK, a report has found, as campaigners call on the government to get on with introducing a deposit return scheme. Almost two-thirds (65%) of all branded packaging pollution across the UK coastline can be traced back to just 12 companies, according to the findings by the marine conservation charity Surfers Against Sewage (SAS). These are Coca-Cola, PepsiCo, AB InBev, McDonald’s, Mondelēz International, Heineken, Tesco, Carlsberg Group, Suntory, Haribo, Mars and Aldi. In total 3,913 volunteers collected branded items over 11,139 miles, making it the UK’s biggest coordinated cleanup event. SAS recorded a total of 9,998 branded items that were linked to 328 companies. Hugo Tagholm, the charity’s chief executive, said: “Our annual Brand Audit [report] has once again revealed the shocking volume of plastic and packaging pollution coming directly from big companies and some of their best-known brands … Legislation such as an ‘all-in’ deposit scheme needs to be introduced urgently and governments need to hold these companies to account and turn off the tap of plastic and packaging pollution flooding the ocean.” Companies say that a lack of a good deposit return scheme (DRS) in the UK means the packaging of their products gets needlessly littered. There are plans for such a scheme in Britain, but this has been delayed until 2024 – with the government blaming the covid-19 pandemic.

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