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Tue 21st Dec 2021 - Update: Industry facing £1.5bn rent bill within days, David Page and Inn Collection Group
Hospitality bosses facing £1.5bn rent bill within days as fears grow over fresh lockdown in January: Pub and restaurant chiefs are braced for a wave of bankruptcies as a £1.5bn rent bill is due on Christmas Eve after covid restrictions triggered a steep drop in festive trading. The Telegraph reports businesses are scrambling to make their quarterly payments to landlords following a collapse in sales of up to 60% at the busiest time of year. One in three have no cash reserves left, according to figures from UKHospitality. Figures from the data company Springboard showed footfall at the weekend was 8.5% lower than the week before, with a 6.4% drop in other big cities. A weekly drop is highly unusual so close to Christmas. Industry leaders warned hospitality is now in danger of "bleeding out" as companies that survived the two previous lockdowns finally go under. It came as prime minister Boris Johnson downplayed the likelihood of any immediate new support for struggling companies, saying only the government would keep existing measures under review. UKHospitality chief executive Kate Nicholls said: “The industry is bleeding out. It is dying on its feet.” Industry groups including UKHospitality and the Federation of Small Businesses will make a fresh plea for help today (Tuesday, 21 December) in a call with business secretary Kwasi Kwarteng. Nicholls is also understood to have written to senior figures in government on Monday (20 December), warning the situation has worsened since last Wednesday. She said uncertainty over future measures is having an effect on bookings and confidence, and added: “If this trading period is to be affected, it will be vital to give businesses as much notice as practically possible to avoid unnecessary spend and costs building up.” The Society of Independent Brewers became the latest industry group to pile pressure on chancellor Rishi Sunak to come out with an aid package, saying: "We urgently need to see an appearance from the chancellor and for him to deliver new support for the beer and pubs sector.”

Propel Premium Advent Video Calendar to feature Michael Harrison: Propel has launched its Premium Advent Video Calendar, giving subscribers access to a great video each day in December from our autumn conference series. Each day in December in the run-up to Christmas, Premium subscribers will be sent a video featuring some of the sector’s leading operators, who will share insights, advice and expertise. The next video – which will be sent at 9am today (Tuesday, 21 December), – features Michael Harrison, co-founder of Gravity, who discusses the company’s “future of the high street offer”, the thinking and launch of its 80,000 square foot entertainment venue in London’s Wandsworth, and how it offers a solution for landlords who are looking to diversify and secure the future of their assets. Earlier this month, Premium subscribers received the fifth edition of The New Openings Database, which is produced in association with StarStock. The database showed the details of 366 newly announced site openings and upcoming launches. Premium subscribers also receive access to two other databases. The latest Propel Multi-Site Database, which is produced in association with Virgate, and the Turnover & Profits Blue Book, which is produced in association with Mapal Group. 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 group 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. To subscribe, email jo.charity@propelinfo.com

Stealth lockdown causing Christmas ‘disaster’ for pubs and restaurants, warns Franco Manca boss: The hospitality industry is on the brink of collapse as the government urges people to slash social contacts without offering support to businesses, Fulham Shore chairman David Page has warned. Christmas is becoming “a disaster area” for small businesses, said Page, whose company runs Franco Manca and The Real Greek. “I’m not sure any of the current Cabinet understands cash flow,” he told BBC Radio 4’s Today programme. “Cash flow is the problem at the moment, over the last week or two and over the next ten days.” Page said while his company will survive due to its spread across the UK, smaller businesses will struggle: “Nearer London, and nearer city centres, these businesses have no cash flow,” he said. “They are paying staff, they have got to pay suppliers, it is a bit of a disaster area for smaller businesses.” He urged chancellor Rishi Sunak to act rapidly to support those businesses now at risk. It comes after hospitality chiefs warned on Sunday (19 December) that Sunak has just 24 hours to commit to a package of support for businesses, or risk the closure of 10,000 pubs and restaurants. Page said: “This is lockdown by stealth and by government advice to stay away from crowded areas, which may be a very good idea health wise, but it is ruining a lot of small businesses. The chancellor had better get his act together, otherwise it is going to be a really horrible Christmas for our sector.”

Inn Collection Group sets out plans to add up to eight sites a year, completes renegotiation of main banking facility: The Inn Collection Group has set out plans to add up to eight new sites a year to its rapidly growing portfolio and has completed a renegotiation of its main banking facility to support its expansion plans. The group revealed its plans as it published accounts for the year ended December 2020, showing turnover rose slightly from £13.6m to £13.8m on the 15 sites it owned and operated across Northumberland, County Durham, Tyne & Wear, Cumbria, Lancashire, Teesside and Yorkshire, despite the impacts of the pandemic. However the group’s operating loss of £1.3m widened to £4.3m and pre-tax losses increased from £5.2m to £10.4m on the back of a year of significant investment, with the company almost doubling its portfolio in a year, adding 13 sites. The group has also made two further announcements on its first acquisition in Wales and the opening of a newly remodelled pub-with-rooms in Ambleside. The group has been backed by OakNorth, which has amended its support after the year to give £63.5m of committed facilities, to fuel the growth plans, with further funds being made available, subject to conditions, next year. The company stated: “In November 2021, the group completed the renegotiation of its principal bank facility that provides debt finance to the group. This has seen the committed facility increase from £42.5m to £63.5m, on a four-year term, as well as the addition of a further £30m as an accordion to be made available during 2022, subject to a number of conditions. The covenants on the new facility have been reset. Based on both the group base case forecast and the group severe but plausible downside forecast, there are not anticipated to be any issues with covenant' compliance on the new facility.” Writing in the report, chief financial officer Paul Edwards said 2020 had been impacted by the significant effect of covid-19 and two national lockdowns, and that results for 2021 would also be affected by closures that lasted until May. But he added: “Significant investment continued in 2020 into the management and operating infrastructure to support execution of the long-term expansion plan and delivery of the high-quality standards and customer service levels expected throughout the group. A strong pipeline of further acquisition opportunities has been developed gradually at the time of issuing the financial statements, all at different stages of progress through to near completion. The covid-19 impact saw a number of sites coming to market as incumbent owners felt the impact of the pandemic on business being affected by national and global economies. Potential new-build sites and further acquisitions are constantly being assessed and it is anticipated that at least one further new build site or acquisition will be committed shortly following normal trading resumption for the group and the sector. The group intends to add a further four to eight new sites per year.”

Discovery Group opens debut England site: Scottish-based multiple operator Discovery Group has opened its debut site in England. The company, led by Alan and Andrena Bowes, has launched speakeasy-style bar, The Exchange, underneath Eldon Square in Newcastle. It follows an extensive £300,000 renovation with pub owner Greene King. The venue offers a premium drinks and cocktail range paired with a dining food menu that includes Prohibition themed burgers and Bayo buns. Discovery Group also operate eights sites in Scotland including the Barologist in Leith. Alan, who originates from the north east, said; “We are excited to have been able to open this great new bar in the city. We wanted to create something unique and interesting that appealed to all ages, and I think we’ve done that with the Exchange”. Sarah Barron, business development manager for Greene King Pub Partners, added: “Alan and Andrena have a real understanding of what customers want and they can certainly deliver. The Exchange is a fully inclusive city centre bar that will draw in a great crowd.” Greene King Pub Partners operates more than 1,000 pubs in England, Scotland and Wales. 

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