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Morning Briefing Strap Line
Tue 5th Jul 2022 - Update: Young’s trading, Coaching Inn Group acquisition, Pret and Chapel Down
Young’s reports like-for-likes up 34.9% as it begins new era but mindful of the impact of inflation on consumer spending: London pub operator Young’s has reported an “excellent” start to its current financial year with revenue in the first 13 weeks up 39.7% in total and 34.9% on a like-for-like basis against last year. However, the business said it is mindful of the impact of inflation on consumer sentiment and spending in its pubs. In an annual general meeting statement, chairman Stephen Goodyear said: “This financial year we will benefit from our investment in the nine acquisitions we made last year and the more recent acquisitions of the Bedford Arms (Chenies Village) and Merlins Cave (Chalfont St. Giles). We will also see the full year benefit from our major investments last year into our existing estate. These include the Grand Junction Arms (Harlesden) completed in January, the Spread Eagle (Wandsworth), reopened in March with an additional 21 bedrooms and the Phoenix (Victoria), reopened in late May of this year. As previously announced, Patrick Dardis steps down today as chief executive after six years in the role. He is followed as chief executive by Simon Dodd, currently chief operating officer, who was recruited three years ago with succession planning in mind. Patrick will remain on the board for an orderly transition to Simon, until he retires at the end of September. He will remain available to the company until the end of March 2023. I have thoroughly enjoyed working with Patrick over the last 20 years. He has worked very effectively and with great energy and passion for the business. On behalf of the board, I would like to thank him for his huge contribution and his many successful achievements during his time at Young’s. The board feels that Young’s is well placed to manage the impact of the current inflationary environment on our cost base, but are very mindful of the potential impact that the inflationary environment could have on consumer sentiment and ultimately spending in our pubs. We will continue to invest in the future growth of the business, sticking to our strategy of running premium, differentiated and well-invested pubs and hotels. The strength of our balance sheet leaves us well-placed to make further investments and generate good returns for the long term.”

Sponsored message – join Heineken SmartDispense at the inaugural Energy Well Spent Summit: Join hospitality operators, media, and industry experts at the inaugural Energy Well Spent Summit hosted by Heineken SmartDispense. This free event will host practical discussions and share useful takeaways around the key issues affecting the sector. Attendees will hear from expert speakers and hosts such as celebrity chef, Candice Brown, and environmental analyst, Roger Harrabin, and many more on the following themes: how to make energy efficiencies and cut rising costs; how to approach and prepare for the upcoming EPC legislation; how to enrich staff well-being to attract and retain talent; and how to use technology to enhance the customer experience. A selection of leading sustainable hospitality suppliers will also be in attendance, showcasing their services and industry expertise in the Energy Well Spent exhibitor zone. A Heineken spokesman said: “What’s more, you could be in with a chance to win SmartDispense for your venue, including free installation, free line cleaning and services for an entire year, plus free access to a full package of added value benefits. This is going to be a day to remember so don’t miss out – register your interest here.” If you have a sponsored story you would like to see featured in this newsletter position, email paul.charity@propelinfo.com

RedCat continues The Coaching Inn Group expansion with New Forest site: RedCat Pub Company, the investment vehicle from ex-Greene King chief executive Rooney Anand, has acquired the historic Forest Park Country Hotel and Inn in Brockenhurst, in the New Forest in Hampshire. It is the latest in a string of acquisitions in top tourist destinations, following those on the north Norfolk coast and in the Brecon Beacons national park. This is the 11th acquisition by The Coaching Inn Group under RedCat ownership and brings the number of pub hotels owned by The Coaching Inn Group to 29. RedCat has grown strongly since inception in February 2021, having acquired more than 100 pubs and pub hotels, now amounting to a hotel room estate of in excess of 1,200 rooms. The Coaching Inn Group, acquired by RedCat last August, operates historic coaching inns in market towns across the UK. The Forest Park Country Hotel and Inn, which has recently benefited from significant investment, has 40 en-suite bedrooms and an inn and restaurant serving modern British cuisine. RedCat’s strategy is to acquire quality inns, managed and tenanted pubs across the UK. It aims to provide the operational expertise and capital investment pubs need to get back on their feet and accelerate their growth, as the sector recovers from the pandemic. The company’s approach is highly flexible, allowing it to acquire single pub assets, all the way through to larger-scale businesses and pub companies. The sale was brokered by Savills, acting on behalf of the owners. Kevin Charity, chief executive of The Coaching Inn Group, said: “I’m delighted to have acquired this modern country house hotel centred in the New Forest national park. Thanks to RedCat’s support, we have been working at pace over the last few months to expand our attractive portfolio, particularly in areas of scenic natural beauty which see strong tourist visitation.” Anand added: “RedCat and the Coaching Inn Group continue to selectively invest, focusing on running high-quality pub hotels across the country, which will offer customers the best possible service and good value.”

Pret hungry for solution to rail strike row: Pret A Manger chief executive Pano Christou is urging train operators and unions to agree a deal to prevent further train strikes and avoid any further slump in trade. Christou said further strikes could have a damaging impact on businesses that were only just recovering from the impact of the pandemic. Pret said sales at its outlets in the City and Canary Wharf had fallen to 62% of pre-covid levels in the week of strikes at the end of last month, the lowest level since April. Its station shops also fell sharply. Christou told The Times that there had been a “huge negative impact”, adding: “I’d like to see an agreement with both parties so we can put this to bed.” Apart from the strike impact Pret’s performance has improved. It returned to profit in March and has been cash flow positive since May after bouncing back from the impact of the pandemic.

Chapel Down – outlook for rest of 2022 remains positive: Chapel Down has reported the outlook for the rest of 2022 remains positive with performance in the first half of the year “in line with management expectations”. The company stated: “The first half of 2022 saw continued strong growth momentum in the sale of our Chapel Down sparkling wine, with increased off and on-trade distribution and the implementation of brand activations linked to the Platinum Jubilee and our key brand sponsorships of the England & Wales Cricket Board, The Boat Race and Ascot. Overall first-half revenues were in line with 2021, reflecting the impact of the lower availability of still wine following the 2021 harvest. Across our 750 acres of vineyards, favourable conditions so far this year point to a promising 2022 harvest. Net cash at 30 June was £3.755m (first half 2021: net debt of £0.854m) with a further £12m headroom remaining in the £15m asset backed lending facility provided by PNC Business Credit. The balance sheet remains strong with reported net assets, including freehold land and buildings, planted vineyards and stock, in excess of £31m, equivalent to 19.5p per share. The board continues to believe that the market value of the tangible assets is considerably higher than the UK generally accepted accounting principles reported value. Notwithstanding the current macroeconomic uncertainty, the outlook for 2022 remains positive with forecast revenue growth resulting from the growth in demand for English sparkling wine and the strength of our Chapel Down brand along with margin enhancement resulting from the price increases and management of inflationary costs pressures. This momentum, and the continued growth of our brand, leave Chapel Down well-positioned to deliver on our ambition to double the size of the business over the next five years.”

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