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Thu 4th Aug 2022 - Update: Nightcap trading update, Just Eat, energy bills
Nightcap reports 23.6% like-for-like sales increase at year-end: Bar and nightclub operator Nightcap has reported it ended its financial year on 3 July with a 23.6% like-for-like sales increase. The company stated: “31 of the 34 group’s announced bars are now trading across London, Birmingham and the south west of the UK, with three additional larger format bars for Tonight Josephine in Bristol and Liverpool, and The Cocktail Club’s flagship site in Birmingham, entering the final stages of fit out ready to be open for the important second quarter of the group’s 2023 financial year. The continued planned deployment of CAPEX into new openings throughout the FY2022 financial year has resulted in weekly turnover steadily increasing quarter on quarter, with the group now regularly achieving weekly revenue exceeding £1.0 million. Group revenue was £35.9 million for FY2022 (£6 million for FY2021), resulting in a 55.1% revenue increase on a combined group of companies basis and a 23.6% like for like increase. The group expects adjusted Ebitda for FY2022 to be in line with current market expectations, despite challenges from restricted trade caused by covid-19 over the important Christmas period and recent transport strikes. Trading has continued in line with management’s expectations in July 2022. The group has strengthened its focus on offering good times and good value to its resilient Millennial customer base and, backed by an unparalleled property pipeline, the board is confident in its decision to continue to invest in growth during FY2023.” Chief executive Sarah Willingham said: “We are absolutely delighted with these results. Nightcap is going from strength to strength and I am so proud of the business that we are building. Finishing the year with 31 sites, with a number of openings to follow and a significant new site pipeline is a great achievement. Despite recent transport strikes and significant covid-19 interruptions during the important 2021 Christmas period we have managed to deliver against our expectations thanks to our wonderful teams and loyal customers. Strong growth delivered by exceptional people with a real desire to continue to build a leading business in the bar sector in the UK, is setting us up well for another year of significant growth as we continue to bring on board and open more new sites in prime locations across the country. We always thought we would have a short window to sign and open the best sites across the UK when we were admitted to AIM last year, but the challenging macro environment has resulted in more sites being available on very attractive terms and with a simple to replicate business model across four distinctive brands, all led by motivated and engaged managements teams, serving a customer base with continued high disposable income, we feel confident about the year ahead despite the economic pressures facing the UK today. We are well placed to mitigate inflationary rises as we grow and increase our buying power and we will continue to throw the best parties offering exceptional quality and value, ensuring that our lovely customers can still enjoy their great nights out.”

One day to go before next edition of The New Openings Database release, to show details on 356 new sites, 18,300-word report included: The next edition of The New Openings Database, which is produced in association with StarStock, will show the details of 356 newly announced site openings and upcoming launches for Premium subscribers when it is published tomorrow (Friday, 5 August), at midday. The database shows the details of which company has opened a site or its plans to open one in the future. It will have details on what type of site it is and its location. There will also be a website link to the businesses so you can find out more about them. It is published on a monthly basis. The next edition of the database features expanding hotel and pub operators, niche cuisine, and new experiential concepts. Premium subscribers will also receive a 18,300-word report on the new additions to the database. Premium subscribers also receive access to three other databases. The latest Propel Multi-Site Database, which is produced in association with Virgate, was sent to Premium subscribers last Friday (29 July). The database contained 43 new companies, bringing the total number of businesses listed up to 2,572. The 217 sites run by those 43 new additions means the entire database of sites has reached 66,223 sites. Premium subscribers also received a 3,200-word report on the new businesses added. 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. There is also a synopsis of what the business does and significant news associated with it. Premium subscribers also receive the Turnover & Profits Blue Book, which is produced in association with Mapal Group, and the UK Food and Beverage Franchisor Database, which is an exhaustive guide to the companies offering a food and beverage franchise in the UK and is updated every two months. 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 single subscription rate is £445 plus VAT for operators and £545 plus VAT for suppliers. Email to upgrade your subscription. 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. 

Just Eat suffers €3bn hit on Grubhub: Just Eat Takeaway has written down the value of its US subsidiary Grubhub by €3bn, slashing its value by almost half just a year after buying the food delivery group as it contends with strained consumer budgets and stiff competition. The FT reports that the reduction in the value of Grubhub, which it bought for $7.3bn, comes as Just Eat is trying to sell the US group, and amid a sharp fall in technology company valuations that has also hit Just Eat’s own market value. Just Eat, one of the world’s largest operators of food delivery apps, said the writedown was the result of “the reduction in sector valuation comparables” combined with the impact of rising interest rates and market volatility. It acquired Grubhub at the height of the pandemic food-delivery boom, but the deal proved unpopular with shareholders as Just Eat’s market value declined. Its share price has plunged 80% since the start of 2021.

Companies face 500% rise in energy bills: British businesses are facing crippling increases in their energy bills of as much as 500% that could threaten their survival this winter, leading analysts have warned. The Times reports energy costs for businesses are rising even faster than for households and risk tipping companies “over the edge” unless the government intervenes, according to Cornwall Insight. Companies typically negotiate fixed-price energy contracts to begin from 1 October. Firms whose two-year contracts are coming to an end face a five-fold increase, while those who took out a contract a year ago are likely to see bills double, Cornwall said. The steep increases reflect soaring wholesale energy costs driven by fears over gas and power shortages as Russia restricts gas supplies to Europe. Cornwall has said it does not expect wholesale prices to return to 2020-21 levels before 2030. Households are also facing a surge in costs from October, when Cornwall forecasts that the energy price cap on most tariffs will rise by about 70% to almost £3,360 a year.

Services sector grows at slowest rate since February of last year: The services sector has reported its weakest growth since February 2021 as companies passed on rising costs to consumers adding to rising inflation. The Times reports a monitor of the services industry, which makes up about three quarters of the economy, dipped to a 17-month low in July, its lowest point since lockdown, according to purchasing managers. The sector stayed above 50, the divide between expansion and contraction, but was down from 53.3 points to 52.5 points, according to the survey by S&P Global and the Chartered Institute of Procurement & Supply. Companies in the UK are still increasing the prices of their services to customers despite an easing of global inflationary pressures from falling commodity prices during the past two months. The survey noted that “despite reports of pressure to remain price competitive in the face of an uncertain economic climate, many firms saw little choice but to raise their own charges during July”. Tim Moore, the economics director at S&P Global Market Intelligence, said that businesses reported “growing customer resistance to price hikes and a subsequent downturn in demand as higher energy, fuel and staff costs are passed on to customers”. Duncan Brock, group director at the chartered institute, said the services sector was struggling to maintain momentum after growth soared when lockdown measures ended last year. “The services sector was on a go-slow trajectory in July, with the weakest level of growth since February 2021, as some ongoing shortages and subdued new business gains hindered progress,” he said. “The UK marketplace will have to improve much more to avoid a prolonged summer of discontent.”

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