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Morning Briefing Strap Line
Thu 26th Apr 2012 - Admiral Taverns, Adnams and Bill’s

Story of the day:

Around 70 per cent of Admiral Taverns bottom-end pubs going to alternative use: Around 70 percent of the Admiral Taverns bottom-end pubs on the market are being sold for alternative use, according to property director Andy Clifford. The company has sold around 300 pubs in the past year, with average sale prices close to the £281,000 per pub that Punch has achieved for its non-core disposals. Clifford told Morning Briefing: “A number of people buy pubs and trade them before moving them to the long-term use they have planned. Around 70 per cent of the pubs we sell go to the alternative use market.” Clifford said that uses include doctor’s and veterinary surgeries as well conversion to homes. A number of pubs had been sold for in excess of £750,000, often where a re-development is planned. A site near New Street Station in Birmingham, for example, has seen a high value crystallised because a developer wanted to add a storey to the pub and create a hotel. Clifford also reported that discussions where taking place over three more of its pioneering “freehold option leases” in the wake of three already completed – a tenant occupies a pub and is able to buy it at a fixed price above the book value at the end of the third year. Clifford added: “We’re not expecting this to be our main disposal route – my gut feeling is that we will do around ten of these a year.” At the moment, Admiral Taverns has just below 200 pubs on the market for disposal.

Propel Opinion: Gone are the days when people thought each and every pub should be saved. There is a widespread recognition that there is over-capacity in the sector. Admiral chairman Jonathan Paveley has admitted that some of the pubs in the estate have been so starved of capex over a decade or more – as they have been passed around the industry - that they are, essentially, unable to be saved. Meanwhile, Admiral’s focus has been on investing in its core estate where, in many cases, beer volumes have remained remarkably steady. 

Industry news:

Visitor numbers soar in Scotland: New and upgraded attractions helped draw four million more visitors to Scotland's main tourist sites last year, according to new research. Visitor numbers rocketed to 47 million with the opening of Riverside Museum in Glasgow and the relaunch of the National Museum of Scotland in Edinburgh - it was the busiest attraction with nearly 1.5 million visitors.

Double-dip recession confirmed: The UK economy has returned to recession, after shrinking by 0.2 per cent in the first three months of 2012. A sharp drop in construction output was behind the surprise contraction, the Office for National Statistics said. A recession is defined as two consecutive quarters of contraction. The economy shrank by 0.3 per cent in the fourth quarter of 2011. Wednesday's figure is an early estimate and is subject to at least two further revisions in the coming months.

Research to begin on the village pub: An academic from the University of York has received a British Academy award to explore the role of village pubs in creating community cohesion in rural England. Dr Ignazio Cabras, of the York Management School, will examine the importance of the village pub as a place to meet and talk. He will also analyse the impact of pubs on the level of socio-economic activity generated in rural parishes, studying, for example, how pubs function as incubators for charitable and business activities. The £7,700 study, which will take 14 months, will also investigate and test the existence of a cause and effect relationship between rural pubs and factors such as individuals’ health, wellbeing and crime rates in local communities.

Baked beetroot, watercress and strawberries named as super-foods: Separate studies have found strawberries, watercress and beetroot to have beneficial health effects. Research has found strawberries may stave off dementia, watercress has beneficial effects for those who work out and beetroot can boost stamina and make muscles more efficient.

Company news:

Whitbread reports strong results: Whitbread has reported its Costa Coffee arm saw like-for-like sales up by 5.5 per cent in the year to 1 March. Its pub restaurants had a better second half with like-for-likes up 1.2 per cent and covers up 4.8 per cent. Revenue was up 11.2 per cent to £1.77bn and underlying profit before tax rose 11.2 per cent to £320m. Chairman Anthony Habgood said: "Whitbread has delivered another good set of results with both the full year earnings and dividends growing by 15 per cent. Our focus on building strong brands and meeting the needs of our customers has enabled us to perform well in tough market conditions giving us the confidence to continue to expand in line with our ambitious growth plans."

Private equity form Graphite Capital invests in Rex Restaurants: Private equity firm Graphite Capital has made a £21m investment in Rex Restaurants, the company behind The Wolseley in London. The money, which has bought Graphite a significant minority stake in the business, will be used to fund “ambitious” expansion plans – pipeline projects include Brasserie Zedel, an all-day Parisian brasserie off Piccadilly Circus, and a five-star boutique hotel in Mayfair. Rex was founded by Chris Corbin and Jeremy King in 2003.

Scott And Quaff Holdings founder Brian Hulme to open a restaurant: Boss of highly rated multi-site pub operator Scott and Quaff Holdings Brian Hulme is to re-open the former Breeez nightclub in Worcester as a restaurant and entertainment venue. Hulme, who is being partnered by Terry Thompson on the project, will open the venue as The Pavilion in the Park in the middle of May.

Bill’s secures ninth site: Bill’s Produce, the grocery and café concept owned by Richard Caring, has secured a ninth site. The group, which has targeted eight openings this year, has found a site in Guildford. This latest site comes hot on the heels of news that it was taking over the site in Soho formerly occupied by Zilli Fish and Zilli Café. Bill’s, which was founded by Bill Collison, has openings in the pipeline for Exeter and Cardiff.

Michelin-starred pub chef launches “spectacular” pop-up: Josh Eggleton, Michelin-starred chef at The Pony & Trap in Chew Magna, has launched a “spectacular” pop-up restaurant in Bristol. Eat Drink Bristol Fashion is housed in a ‘tipi’ complex that spans the length of Queen Square, and includes a 100-seat formal dining area on one side, a Champagne and wine bar at the other. Running until Monday, May 7, the pop-up is a collaboration between Eggleton and Luke Hasell of Tipi Events. Eggleton said the event was aimed at celebrating Bristol’s thriving food scene and giving “Bristolians the chance to experience great food of places they may have never ventured to before”.

San Carlo opens second Leicester site: A restaurant chain has opened a second site in Leicester. San Carlo Group, has opened French style brasserie Le Petit Rouge above its Italian restaurant San Carlo, in Granby Street, in the city centre. The chain opened its first restaurant 16 years ago and came to Leicester in 2000. The company also has restaurants in Birmingham, Manchester, Leeds and Liverpool.

Adnams wins a Sustainable Development Award: Suffolk-based brewer and retailer Adnams has won a Queen’s Award for its “values-based approach to management”. The company has been commended for its carbon-neutral beer and lighter beer bottles and the establishment of an innovative eco-distribution centre. The company has also harnessed anaerobic digestion technology for generating gas from organic waste to supply its own requirements and feed surpluses to the national grid. Meanwhile, the company’s Copper House Distillery has received recognition at this year’s World Spirits Competition in San Francisco, winning silver medals for its North Cove Oak-aged Vodka and First Rate Gin.

Country Life Brewery launches ale trail: Devon-based Country Life Brewery has launched a guide that offers incentives for visiting pubs. The North Devon Real Ale Trail features 50 pubs around the area, and comes complete with a "passport" to be stamped whenever the customer orders a Country Life ale in a participating pub. Ten stamps will be rewarded with a bottle of cask-conditioned ale from the brewery, 20 will get a presentation pack of three ales, and 40 will be rewarded with a presentation pack of six. Those able to collect their final stamp will be given a special ale trail T-shirt featuring a list of all the pubs.

Brunning & Price wins Castlefield licence: Gastro-pub operator Brunning & Price, owned by the Restaurant Group, has won an alcohol licence to open a prestigious new site within the historic Jackson’s Wharf building in Castlefield. The Chester-based pub group won planning permission for the conversion last year and has now been granted a licence for their venue, which is due to open mid-June. There will also be an outdoor area by the waterside. Last week, Brunning & Price won the go-ahead to open a venue near Chester racecourse.

Apprentice star opens 18th sandwich shop: Rocky Andrews, who appeared in the fifth series of The Apprentice, has opened his latest Fatso’s sandwich shop in Manchester – the eighteenth site. He has set an expansion target of 50 sites: He said: “We're in it for the long haul, it will be built up in the right way. We may expand as far as Birmingham but we'd probably leave it at that.”

Hillbrooke Hotels picks up eighth site: Hillbrooke Hotels, the company headed by Christoph Brooke that specialises in top-end pubs, has won the contract to operate The Stag and Huntsman in the village of Hambledon, between Hanley and Marlow. The pub is undergoing a major refurbishment and will re-open at the end of next month. Hillbrooke’s other pubs include The William Cecil in Stamford and The Bath Arms in Longleat.

 Jack – no catalyst to Wetherspoon shares: Leisure analyst Douglas Jack, of Numis Securities, has argued that it’s difficult to see any “immediate positive catalyst to Wetherspoon’s share price”. He said: “We expect upside to be limited by above-average exposure to declining high street footfall and customer sensitivity to the passing on of higher taxes/costs. However, improving cash flow and share buy backs should cap the downside. (Next) Wednesday’s outlook statement is likely to remain cautious, consistent with expansion being cut (and shares being bought back). Potential sources of optimism are an improvement in the cost outlook and an introduction of minimum pricing, but it is difficult to envisage an immediate positive catalyst. Share buy backs should limit the downside, although we estimate that only one million shares can be bought in the fourth quarter if the company sticks to its guidance of debt increasing by £40m this year.”

Genting to invest £2m in Liverpool to “broaden” leisure offer: Casino operator Genting is to spend £2m on refurbishing its Queen Square Genting Club in an investment that will create 20 jobs and offer 24-hour opening. The project will introduce a new 360 degree bar on a mezzanine floor above the gaming area which will serve champagne and cocktails. It will also include private booths, a dance floor and screens to watch live sport. A new contemporary restaurant, ‘Fahrenheit Grill’, will be added. Paul Willcock, managing director for Genting UK’s provincial estate, added: “The redevelopment of our Queen Square Club will make far better use of the space and will broaden the offering available to all of our customers, whether their visit is for gaming or they simply want to enjoy dinner and drinks in the new restaurant and bar.”

Lap-dance plan in Swansea faces stiff opposition: More than 1,000 people have signed a petition opposing the licensing of a lap dancing club next to a church in Swansea. Thomas-Bellis Leisure has applied to begin lap-dancing at the Bellissima club in Swansea’s York Street. The minister of York Place Baptist Church called the plan "brazen".

Spirit sells London West End freehold pub: Managed pub company Spirit has sold the freehold of Woodstock in London's Woodstock Street, leased to a tenant, to a private buyer for in excess of £2m — a rare West End freehold sale. The pub, which adjoins Oxford Street, attracted interest from both UK and international investors, with offers coming in from as far away as the Far East. Andrew Robinson, of agent Christie & Co, said: “The strength of demand for London pubs helped secure our clients, the Spirit Pub Company, a surprising premium price. Moreover, the deal was delivered in a month from instruction to completion.”

Morning Briefing Diary:

Getting it absolutely right: The Quince Tree, a funky hybrid pub, restaurant, café and deli in Stonor near Henley, has finally opened its doors. But it’s been a huge effort. The site owner Bobby Yerburgh actually bought the derelict site in 2008. An opening was planned for October last year but, bravely, Yerburgh decided to hold off until he was happy that the site was completely ready. “Whilst it was difficult – financially and emotionally – to say no to Christmas bookings we just weren’t ready,” he said. A colleague tells Diary: “The planning process for a listed building in South Oxfordshire is a long and complex one. This took almost as long as the construction phase (with building starting in August 2010) and still continues.”

Earning more dough in a recession: Panera Bread, the US in-store bakery café chain, reported its eighth quarter of profit growth in excess of 20 per cent in nine quarters yesterday. Like-for-likes were up an enviable 7.5 per cent with average site sales at $51,331 per site per week. The company is broadly the same size at Mitchells & Butlers with 1,561 sites. What the secret? Could it be, in part, the ten million loyalty card holders it’s recruited from scratch since November 2010 – two-fifths of transactions are linked to them.

Fast Forward to St Albans: Talking of Panera Bread, Diary hears that former Warner Leisure Hotels boss Jim Forward might be cooking up his own Panera Bread-style enterprise in St Albans. Word is that Jim, who stepped down from Warner Leisure in June last year, is planning to open a new concept called St Albans Bakehouse, an artisan bakery and restaurant offering top coffee and homemade cakes. Forward’s very full CV includes stints as a brand development manager with Bass in the 1990s and a strategy manager with Sainsbury’s.

Making decisions from lofty heights: Iceland founder Malcolm Walker’s decision to invest in the Individual Restaurant Company, owner of Piccolino and Restaurant Bar & Grill, proves you can make important decisions from anywhere in the world. Walker reports: “I was delighted to help buy the company. Their food is so delicious that I even took a selection of their delicacies with me when I climbed Mount Everest last year – and actually agreed the deal to take the company private from Base Camp.”

How the years fly by: Beds and Bars boss Keith Knowles is celebrating a landmark next Tuesday (1 May) when he will have chalked up 35 years in the business. He’s celebrating by hosting a few drinks in London with a midday start. In the meantime, Knowles is busy driving expansion plans forward – he’s in New York this week scouting out sites for a first State-side opening.

Titanic pub sets sail: Morning Briefing reported earlier this week that a pub in Southampton has re-badged itself The Titanic in honour of the city’s link with the ill-fated liner – it called-in prior to its maiden (and final) voyage. Tim Bird, founder of Cheshire Cat Pubs and Bars, was super-quick with a quip: “I assume the Titanic pub will only be using iceberg lettuce.”

I think I’m turning Japanese, I really think so: Just when you think you’ve heard of every conceivable leisure sector business model, one more pops up. Turns out, Diary discovers, there are 100 cat cafés in Japan. Customers can relax with a cup of coffee, pet the assembled cats, surf the internet, or play Nintendo Wii. Cat cafes specialise in different types of cat – there are black cat cafes, fat cat cafes and rare breed cat cafes. Cat cafes are, apparently, especially popular as dating spots. But you can rely on pen-pushers to try and spoil the fun. Recently a Tokyo city ordinance debated whether the cat cafes should close their doors at 8pm in order for the cats to get a longer rest. Cat café owners pointed out that cats are at their most lively in the evenings and won a later 10pm closing time. 

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