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Morning Briefing for pub, restaurant and food wervice operators

Tue 2nd Apr 2024 - Update: Trading in Revolution shares suspended, new £50m investment vehicle, Amber lfls
Trading in Revolution Bars Group shares temporarily suspended: Trading in shares in Revolution Bars Group, the operator of the Revolution, Revolución de Cuba and Peach Pubs brands, has been temporarily suspended after the business was unable to publish its interim results for the 26 weeks ending 30 December 2023. The business said: “As stipulated by Rule 18 of the AIM Rules for companies, the company was required to publish its interim results by 30 March 2023. The company has been unable to publish its Interim Results in line with this requirement and hence trading in the company’s ordinary shares on AIM will be suspended with effect from 7.30am on 2 April 2024 pending publication of the interim results. Suspension from trading will be lifted with the publication of the interim results in due course. Further to the announcement made on 26 March 2024, the company continues to evaluate all the options available to it, including engaging with key stakeholders and potential investors with respect to a fundraising.” Last week, shares in the business dropped more than 50% after the business confirmed it was exploring its strategic options, such as a restructuring or sale. The company’s shares fell 51.72% to 1.4p, giving it a market cap of £3.2m. It came after the business confirmed it was engaging with key shareholders and other investors, including Luke Johnson, in respect of a fundraising, and exploring all of its options, including a possible restructuring of certain parts of the group, and a sale of parts or all of the business. The company’s shares were suspended at 1.2p, giving it a market cap of £2.76m.

Premium Club members to receive next New Openings Database and videos from Propel Multi-Club Conference on Friday: The next Propel New Openings Database and the videos from Propel’s March Multi-Club Conference will be sent to Premium Club members on Friday (5 April). The database features openings by casual dining operators such as Pho, the Vietnamese restaurant group, which is launching sites in London and Norwich. Meanwhile, Japanese-inspired The Blue Pelican is opening in Deal in Kent and the Medlock Canteen debuts at the New Jackson scheme, at Manchester’s southern gateway. The database is published on a monthly basis and Premium Club members will also receive a 3,200-word report on the 54 new additions to the database. Premium Club members will also receive all the videos from the Propel Multi-Club Conference at 9am on Friday. They will include Raja Adil, group chief executive of the Adil Group, talking about building one of the largest family-owned quick service restaurant operators in the UK; and Sir Tim Martin, founder and chairman of JD Wetherspoon, discussing the current state of the UK pub market and the evolution of its offer. Premium Club members also receive access to five other databases: the Turnover & Profits Blue Book, the New Openings Database, the UK Food and Beverage Franchisor Database, the UK Food and Beverage Franchisee Database and the Who’s Who of UK Hospitality. Plus, all members will be offered a 20% discount on tickets to five Propel paid-for events – The Excellence in Pub Retailing Conference (14 May), Social Media for Profit (18 July), the Talent and Training Conference (1 October) and Restaurant Marketer and Innovator (two days in January 2025). Operators will also be able to send up to four members of staff to each of our four Multi-Club Conferences for free. Premium Club members receive their daily Propel Info newsletter 11 hours earlier than standard subscribers, at 7pm the evening before. They also receive videos of presentations at eight Propel conference events two weeks after they are held. This represents around 100 videos of industry insight over the course of the year. Premium Club members will be sent a dedicated monthly newsletter that will highlight key updates in the sector and direct subscribers to all the vital content their membership offers. Premium Club members also receive exclusive opinion columns every Friday at 5pm, which include the thoughts of Propel group editor Mark Wingett and a host of industry leaders from across the sector. A Premium Club subscription costs an annual sum of £495 plus VAT for operators and £595 plus VAT for suppliers. Companies can now have an unlimited number of people receive access to Premium Club for a year for £995 plus VAT – whether they are an operator or a supplier. Email kai.kirkman@propelinfo.com today to sign up.

New £50m sector-focused investment vehicle launched: A consortium of high-net-worth individuals including Justin King, the former chief executive of J Sainsbury, has raised £50m to target acquisitions and consolidation opportunities in the UK hospitality sector, with a focus on “premium and high-end experiences”. Led by Andrew Fishwick, who has a wealth of experience leading businesses including hospitality and arts organisations – Hestia Hospitality said it is on a mission to become the “UK’s leading hospitality group focused on premium and high-end experiences, targeting annual revenues of more than £100m within three years”. Hestia’s highly experienced management and advisor team has opened and operated over 100 sites within the Hospitality and Leisure sector and has built businesses collectively worth more than £5bn. It includes Paul Helmsley, former group finance director of The Innovation Group who serves as chief financial officer; Simon Esner, co-founder of WSH Ltd –one of the UK’s largest hospitality companies with brands including Benugo, Searcy’s, and BaxterStorey – who is non-executive chair; and non-executive director Steve Smith, who spent nearly three decades at Morgan Stanley including advising on scores of transactions. Hestia’s special advisors include King CBE – former Sainsbury’s chief executive, and current non-executive director of M&S and Itsu, and chairman of Dexters; and Richard Wassell, founder of twentyretail and former chair of the Restaurant Property Advisors Society. Hestia is backed by a collection of family offices and high-net-worth individuals and has secured an initial £50m to acquire premium, multi-site restaurant brands which it considers to have significant growth potential. To date, Hestia has completed three initial transactions. This includes the acquisition of Native, a “closed-loop farmhouse restaurant concept” by Ivan Tisdall-Downes and Imogen Davies that is pioneering sustainability and ethical dining. Native, which formerly operated at Brown’s, will open its new site at the Michelin-starred Pensons at Netherwood in May. It also has taken a minority stake in All Things Bloom, a specialist coffee brand set up by Henry Ayers, formerly of The Gentlemen Baristas, which fell into administration in January, and backing Apoy and Sarap, the ventures from chef Budgie Montoya. The company said: “Hestia’s management team will work with each brand to empower the concepts to fulfil their growth potential. Leveraging learnings from across its brands, Hestia will also enable the sharing of best practices as they collectively contribute to the group’s vision of creating world-class consumer experiences.” Fishwick, chief executive and majority shareholder of Hestia, said: “This funding round is a resounding endorsement of our thesis that there has never been a better time to invest in our sector. There are exceptional businesses with outstanding entrepreneurs and management teams behind them that need the support to grow to their full potential. Hestia is designed to be the antithesis of private equity; it is designed to nurture and facilitate sustainable growth and development, whilst maintaining excellence and keeping the customer experience at the front and centre of everything we do.” In summer 2021, Propel revealed that Fishwick had launched Epicurean Endeavours, a newly formed hospitality and leisure acquisitions vehicle, which was also backed and advised by King and was planning to raise an initial £15m through a market listing.

Amber Taverns FY lfls up 11.3%, still exploring options: Amber Taverns, the 170-strong, wet-led, freehold community pub operator, has reported a 11.3% increase in like-for-like sales in the year to 4 February 2024 and reiterated it is likely to refinance or to take on new investment of some kind this year to fulfil its future expansion plans. The Times reports that in the year to 4 February 2024, Amber increased its turnover by 15% to £110.4m, with underlying earnings rising from £22.4m to more than £25m. Like-for-like sales increased by 11.3% for the year and were up 6% in the first six weeks of the new financial year, driven by a mixture of volumes and price. Last year, the business hired investment bank Rothschild to explore strategic options, which could result in a £250m sale of the business. Amber’s strong trading record is rumoured to have attracted bid interest and a spokeswoman told The Times: “Amber has previously stated it is likely to refinance or to take on new investment of some kind this year to fulfil its future expansion plans. A potential sale is one of a number of options.” The business is targeting 14 to 16 openings a year, but last year it was restricted to half a dozen by stringent planning rules. Chief executive James Baer said: “We opened a pub in Chester last year which is doing very well. It wasn’t a new-build, it wasn’t in a particularly residential area, it was in a main shopping street, yet it took ten months to get planning. It’s a nightmare.” The picture is improving, however. Amber has just opened, or has in the pipeline, pubs in Jarrow, Derby, Durham, Cleethorpes and Bridgend, plus four sites in Scotland: in Airdrie, Motherwell, Prestwick and Bellshill, Lanarkshire. At the same time, it is putting up dartboards in all its pubs in response to a surge in demand created by Luke Littler, the 17-year-old darts sensation. It includes a darts area in all its pub refurbishments and Baer said the majority of its pubs now had a board. “Darts doesn’t sound the most glamorous or exciting thing, but, with the interest generated by Luke Littler, there had been a real take-up of darts,” Baer said. “It’s another reason to come to the pub.”

Pub chiefs lead calls for major tax shake-up: Industry chiefs want Labour and the Tories to make manifesto pledges to overhaul the business rates they pay on commercial property such as shops and bars. The Daily Mail reports that industry chiefs said they will be forced to put prices up for customers after rates increased 6.7% at the start of the month – costing firms in England an extra £1.7bn. The Conservatives have pledged to review the business rates system in three manifestos since 2015 but the industry says little has been done. Kate Nicholls, the boss of trade body UKHospitality, said: “A root-and-branch review needs to be delivered.” She is spearheading calls for a lower multiplier – the pence per pound rate firms are charged – to be introduced as a first step to alleviate the burden. And she has been having “active and constructive” chats on the topic with the Shadow Cabinet team. Clive Chesser, chief executive of Punch Pubs, said it was “unquestionable” that the pub sector carried a disproportionate burden of tax and urgent change was needed. “It is time to move away from a system that is out of date in so many ways, and to adopt fairer taxation systems that promote economic growth and protect our high streets,” he said. Simon Dodd, chief executive of Young’s, said: “It is painfully clear that the current business rates system is in dire need of reform. This is something that must be addressed urgently in manifestos ahead of the upcoming election to secure the long-term futures of businesses and livelihoods across the country.” Jonathan Lawson, chief executive of Liberation Group, said: “In my view this is one of the least business-friendly governments I have worked with. Regarding hospitality, they singularly fail to grasp the contribution our industry makes to economic growth and employment, and instead give us an unlevel playing field from a taxation point of view and a continued lack of reform regarding business rates.”

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