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Wed 8th May 2013 - Drake & Morgan, JD Wetherspoon and Utopian Leisure

Story of the day:

JD Wetherspoon reports like-for-likes up 6.3% in most recent quarter: Pub operator JD Wetherspoon has reported that like-for-like sales rose 6.3% for the 13 weeks to 28 April 2013, with total sales up by 9.3%. In the year to date (39 weeks to 28 April 2013), like-for-like sales increased by 6.7%, and total sales increased by 10.1%. The company stated: “We expect lower like-for-like sales in the final quarter of this financial year than for the year so far, given last year’s final quarter like-for-like sales of 6.1%. The operating margin, in the 13 weeks to 28 April 2013, was 8.5%, compared with 8.3% in the first half of the current financial year. In the year-to-date (39 weeks to 28 April 2013) the operating margin was 8.4%.” The company has opened 16 new pubs and sold two since the start of the financial year. It is still the company’s plan to open 30 pubs in the current financial year, with 20 to 25 pubs in the following financial year. The company added: “As previously indicated, the biggest dangers to the pub industry are the VAT disparity between supermarkets and pubs and the continuing imposition of stealth taxes such as the late-night levy and increased fruit/slot machine taxes. However, the company welcomes the recent abolition of the duty escalator and the reduction in beer duty, and hopes that this indicates a greater appreciation from politicians of the important economic and social role played by pubs. Notwithstanding the recent changes, we anticipate that taxation and input costs will continue to rise.”

Industry news: 

John Torode and Gregg Wallace set Heathrow airport healthier eating challenge: Masterchef presenters John Torode and Gregg Wallace are advising Heathrow Airport on how to improve the dining experience at its 73 restaurants and bars. The pair have suggested Heathrow’s food and beverage team introduce healthier food choices across the terminals - and create a platform to champion British culinary talent. Heathrow serves 26 million meals a year. Ben Crowley, head of food and beverage at Heathrow said: “Heathrow’s food and drink offering is designed specifically with travellers in mind – from people passing through several time zones in a very short space of time to those needing a meal in minutes. We’ve been recognised on a global level but for us this is not enough. We want to continue to innovate to be the best in our league for airport dining. We are hugely excited about responding to the challenge John and Gregg have set and at bringing a new dimension to Heathrow food and beverage offering.” Wallace said: “Food is our first love and at the heart of everything we do. So we were delighted when we were invited to take part in this eating challenge – and to contribute to the guide. We were blown away by the range on offer to hungry passengers at Heathrow; catering for such a huge spectrum of passengers is truly a Herculean task.”

Boutique hotel publisher to introduce sub-brands: Boutique hotel guide publisher Mr & Mrs Smith is expand its portfolio with family, business and group travel sub-brands. The group is launching Smith & Family, Smith & Friends and Smith & Co this year to cater for family breaks, group stays and business travel. The ventures will be funded via retail bonds, which will enable consumers to invest in the business over a fixed term. Investors will receive interest payments in either Mr & Mrs Smith loyalty vouchers or cash. James Lohan, chief executive of Mr & Mrs Smith, said the recession is forcing businesses to be more innovative. He added that funds will also be used to develop apps and digital and social platforms for the brand.

Miles Beale – data on minimum pricing in Canada can’t be relied on: Wine & Spirit Association chief executive Miles Beale has written to The Guardian arguing that Canadian evidence on the efficacy of minimum pricing can’t be relied on. He wrote: “The Institute of Alcohol Studies claims evidence from Canada shows minimum unit pricing for alcohol brings significant health benefits. Using their own estimates of population attributable fractions, researchers in British Columbia say between 2002 and 2009 a 10% increase in average minimum price was associated with a 32% fall in alcohol-related deaths. But actual hospital records show that the number of alcohol-related deaths in British Colombia in that period went up – from 1,073 to 1,169. There is another problem. One state, Alberta, does not have controls on the sale of alcohol, but shows no discernible difference in drinking patterns and health harms compared with the rest of Canada. This shows there is no simple link between alcohol price and harm, and that cultural factors are the most likely indicators of consumption patterns. Dr Perry Kendall, British Columbia’s provincial health officer, acknowledges that provincial governments in Canada have introduced a minimum price “mainly to bring in money rather than to protect public health”.

Company news:

Utopian Leisure eyes roll-out of Fat Buddha: Nightclub, bar and restaurant operator Utopian Leisure, which turns over £9m a year and is headed by former Ultimate Leisure chief executive Bob Senior, is eyeing a roll-out of its Fat Buddha brand after a successful launch of a second site in Newcastle in June last year. Trading figures for Fat Buddha Newcastle “almost exactly spot on with the forecast despite terrible weather” over the past 11 months. Senior now hopes to roll out the brand and believes it will “gather pace over the next six to 12 months”. He said: “I think there’s a formula there. It can be a grand restaurant but also a Fast Buddha version at cinema or retail outlets.” Planning permission has already been granted for a beach-side site in Seaburn with a specially designed roof which can accommodate marquees for functions. The Seaburn site is set to open by March 2014 and Utopian is looking at a former tax office in Washington, which could be converted and open by Christmas.

Drake & Morgan to launch sixth site – with a florist: Drake & Morgan with launch its sixth site, The Happenstance, in the newly developed No.1 St. Paul’s Churchyard on 27 June. The 7,937 square foot, 231-cover venue has been carefully divided into flexible areas, including a bar, dining area, private dining room, and deli with mixology table and florist. Reclaimed timber flooring, pendant lighting and other stylish touches in the dining area create a sophisticated feel, with a mixture of wooden, steel, fibreglass and leather furniture creating distinct areas, from long benches to low-slung chairs. The subterranean floor features a private dining room seating up to 32 or 60 standing. Golden mosaic tiled vaults with hanging plant pots, a 1950s-style kitchen and oversized Anglepoise lights work together to create a glamorous setting for parties and events. It will open from 7.30am until late Monday to Friday and from 10am on Saturday and Sunday. Managing director Jillian MacLean said: “I’m delighted to be launching our sixth site, The Happenstance. We are looking forward to bringing a fresh new concept to the area and believe our lovely customers deserve a great offer. Design inspiration has been taken from recent research trips to Hong Kong, Tokyo and Shanghai, and we’ll continue striving to provide excellent food, drinks and service.”

Great British Menu chef re-opens St Austell pub; warm weather boosts St Austell like-for-likes by 13%: Chef John Hooker, who has appeared in the Great British Menu television series twice, has re-opened St Austell Brewery’s coaching inn The Cornish Arms in Tavistock. The pub was one of the sites that St Austell acquired from Enterprise Inns last year. The lessees of the pub retired at the time of the acquisition and St Austell has invested £250,000 in a refurbishment. Hooker said: “My background is in fine dining, but that’s not going to be what we do here – the Cornish Arms menu is good, honest food with proper pub classics, and it’s designed to be accessible for everyone, whether you’re coming in for a three-course dinner, a light lunch and glass of wine - or just want to enjoy a pint of Tribute at the bar.” Meanwhile, St Austell marketing director Jeremy Mitchell told Propel: “The fine weather last week and over the bank holiday weekend definitely boosted the pub trade with our managed estate sales up 13% like-for-like on the same week last year.” 

Michelin-starred pub chef to open a restaurant: Andrew Pern, who was one of the first pub chefs to earn a Michelin star at the The Star Inn in Harome, Yorkshire, is to a open riverside restaurant in York, The Star in the City. Pern, who has appeared in the Great British Menu, is planning to open a 130-seat restaurant in a converted engine house building close to Museum Gardens and Lendal Bridge. For the York opening he has teamed up with fellow former Scarborough Catering College student Justin Brosenitz. The duo said they plan to focus on locally sourced, Yorkshire produce. The area, on the edge of the River Ouse, is notorious for flooding, but Pern said he was confident the building’s slightly raised site would prevent this. It is scheduled to open in the autumn. In 2011, Mr Pern saw the Star Inn ranked at number 19 when The National Restaurant Awards announced its top 100 establishments in the UK. The ranking was the highest position for a restaurant located in the north of England and The Star Inn was one of only two ranked Yorkshire restaurants.

Specialist beer market stall to open a pub: The owners of a stall focused on selling real ale, which has scores of devoted customers six months after opening, have decided to open their own pub. John Anderson and Dave Walker launched The Crafty Pint in Darlington’s Covered Market last year, selling bottled beers from the north east and beyond. Their success means they have now decided to take over The Half Moon, a Victorian-era pub in Northgate, to create a new real ale pub for Darlington. They will keep the historic Half Moon name, but plan to incorporate The Crafty Pint shop and their own micro-brewery into the freehouse. When unveiled on the Crafty Pint Facebook page last week they were inundated with replies and saw more than 10,000 page views in less than four days. The pub will open 1 June.

Offers invited for freehold of Fawsley Hall: Agents Christie + Co and CBRE are inviting offers for the freehold of Fawsley Hall, which is described as “one of the UK’s finest country house hotels”. Fawsley Hall is set in 2,000 acres of the neighbouring estate’s Capability Brown-landscaped grounds has 58 individually designed bedrooms and suites. Jeremy Jones, director of corporate hotels at Christie + Co, said: “Sitting just north of the Cotswolds, the sheer quality and luxury of Fawsley Hall’s facilities and surroundings, combined with its ease of access to and from London (from where it is just one-and-a-half hours via the M1 or M40), Oxfordshire and the Cotswolds, means that the hotel has strong year-round corporate, wedding and leisure trade.”

Douglas Jack – Enterprise Inns has an improving outlook: Numis Securities analyst Douglas Jack has issued an “Add” recommendation on Enterprise Inns shares with a Target Price of 125p – first half results are due on Tuesday 14 May. He said: “We forecast profit before tax to be down 14% to £54.9m due to disposals and like-for-like net income falling circa 4%. Enterprise should be on track to sell 250 pubs this year, for a targeted £150m of proceeds. This should help debt to fall 7% versus a 6% forecast decline in Ebitda in 2013. The main negative is Vince Cable’s consultation into a proposed Statutory Code. At best, this is going to be an unwelcome distraction. At worst, the Minister “hopes” the proposed Statutory Code of Practice will cost the pubcos £4,000 per tied pub. We would expect Enterprise’s results to include a robust defence of self-regulation. Our 125p target price equates to 9.9x EV/Ebitda (or 13% equity free cash flow yield). Our positive stance reflects potential equity upside should there be a return to positive like-for-like net income growth, which is a key short-term target for the company. This objective should be assisted by improved recent weather and much easier like-for-like comparatives in H2.”

Jamie’s Italian opens latest site in Greenwich – with a deli: Jamie’s Italian opened its latest site in Greenwich on Bank Holiday Monday. It occupies a Grade II property on Nelson Road. More than 100 staff have been recruited to work across the venue’s bar, restaurant, antipasti and coffee sections, as well as in the Deli - the first of its kind in the capital.

Ex-Nobu chef leaves Wabi: Former head chef at Wabi, Scott Hallsworth, has stepped down from Wabi, the Asian food brand. Hallsworth opened the first Wabi site in a former Punch Taverns pub in Horsham before opening a second site on Kingsway, Holborn. Hallsworth is reported to be moving to a new position in the Middle East.

Domino’s offer Facebook fans pre-launch deal on new pizzas: Domino’s UK has offered Facebook fans a pre-launch deal on its new American Legends pizzas. Its New York Deli and The Carolina pizzas are offered for £9.99 each to Facebook fans ‘liking’ them. The deal ends on Sunday 12 May.

SAB Miller marketer join Premier Foods: SAB Miller’s former strategy and innovation chief Pam Powell has joined Premier Foods to help identify opportunities for growth for its eight power brands. Powell joins the grocery business as a non-executive director with immediate effect. She is tasked with driving the growth of brands such as Hovis and Mr Kipling as the business looks to build on 2012’s increase in marketing spend.

Ed’s Easy Diner looks to add ten sites in 2013: Ed’s Easy Diner has targeted the opening of ten new sites in 2013 to add to its estate of 17. Four additional sites have already been agreed including locations such as Gloucester Quays and Meadowhall, Sheffield, as well as a number of sites where heads of terms are agreed. Chairman Stephen Greene said: “2012 has been a landmark year for Ed’s in which the new management team has delivered profitable growth, increased customers 57% to one million, perfected the operational template and begun a phased roll out programme whilst launching innovative concepts based on the core brand as supporting trading units for different types of location. With no material bank debt, an increasingly strong covenant and a brand with impressive broad appeal, the group now has the springboard to significantly accelerate its development.”

Oblix opens at the Shard: The new restaurant from Rainer Becker, Oblix, has opened on the 32nd floor of the Shard. Becker opened Zuma in London in 2002 with his business partner Arjun Waney. The brand now also has outlets in Hong Kong, Istanbul, Dubai, Miami and Bangkok. In 2004, he opened Roka, which has two venues in London and one in Hong Kong. Zuma and Roka both serve Japanese-inspired modern cuisine. Oblix draws inspiration from the grills of New York, the city where Zuma is scheduled to open next year. The cost to fit out Oblix is put at upwards of £6m – it is designed by Claudio Silvestrin, the architect for Armani stores and for L’Anima and Princi restaurants in London.

Award-winning landlord gets permission to expand pub – with a motoring museum: Award-wining licensee Vito Logozzi has won planning consent to expand his pub, The Goodenham Arms, Goodenham, near Market Weighton, with a motoring museum – it will display a collection of vintage motorbikes and car memorabilia. He opened a microbrewery at last summer and the pub was named 2012 Village Pub Of The Year by the Hull and East Yorkshire branch of the Campaign for Real Ale.

Entrepreneur behind The Church nightclub defends name: Entrepreneur Ben Church has defended the use of the name The Church – and religious iconography – at his new Carlisle nightclub. He said: “The church is seen in many parts of the world as a place where people can congregate and have a good time. It doesn’t have to be associated with just religion. If we’d wanted to offend people we could have gone to serious extremes. We could have had all the bar staff in nuns’ outfits or vicar collars or we could have tried to have weddings done in the place but we respect people’s religious beliefs. I understand what these people are saying but there are many bars in the world called The Church. We’re not the first, but you can’t please everyone. We’ve been trading five weeks now and people absolutely love it here.”

Beds and Bars new site named “Opening of the Month” in Edinburgh: Pan-European hostel provider Beds and Bars new opening in Edinburgh, Jake’s Place, has been named as “Opening of the Month” in the local newspaper. It stated: “Jake’s Place ensures Scotland’s capital isn’t missing out on the craft beer scene. It stocks 65 American and Scottish beers. Jake’s Place plays on the bluegrass theme with a wooden floor and bar, animal skulls on the walls and beer taps on kegs behind the bar.”

Marston’s starts work on Haverhill Business Park new-build pub restaurant: Midlands-based Marston’s has begun work on a new-build pub at the Haverhill Business Park in Suffolk. The park will provide up to 450,000 square foot of office, laboratory and technology space and supporting accommodation for companies from start-ups to global players. The pub, which will be called The Flying Shuttle, is expected to open before Christmas.

First closed Fat Cat Café bar site is re-opened: Jamie Kimpton has bought the lease on the closed Fat Cat bar in Chester’s Watergate Street, which was shuttered at the end of April. It re-opened yesterday (Tuesday 7 May), as the Linenhall Vaults. Kimpton also owns gastro-pub Pollards Inn in Willaston. The Fat Cat in Chester was one of three outlets in the chain to close with immediate effect after the company was placed into administration. Kimpton said: “I’m thrilled to have secured a future for the venue. We are hoping to keep all of the previous staff employed and are currently in negotiations to secure our new Linenhall Vaults team.” He said Linenhall Vaults would be an intimate city bar and restaurant appealing to professionals, couples and small groups.

Luminar chief executive reports “creditable” first year at company awards: Luminar chief executive Peter Marks has reported a “creditable” first year at its annual conference. Marks told staff: “This is a professional, well-run business and our team have a real passion for delivering great experiences to over seven million clubbers every year. It’s a bit of a cliché, but (we) are all winners as we’ve had a great 12 months with some strong results, both on a financial level and in terms of up-skilling our teams. We now have a positive platform to build on as we move into the next phase of our journey.” Ged Gorrie was named the company regional director of the year, general manager of the year was Alex O’Reilly from Oceana Watford and deputy manager of the year was Tom Meill from Liquid Uxbridge.

City Pub Company set for 20 pubs by end of 2014: City Pub Company, the EIS company headed by Clive Watson and David Bruce, is on track to operate 20 pubs by the end of 2014. The company has bought The Metropolitan in Bath to add to the three London pubs it has acquired in the last couple of months to bring estate size to 11. It has also recruited Alex Derrick to become chief executive of City Pub Company West and Rupert Clark as chief executive of City Pub Company East. It has raised around £17m and will look to raise a further £10m in early 2014. Watson said: “We have made substantial progress over the last few months and The City Pub Company Group is well on course to meet our target of 20 sites by the end of 2014. Our EIS fundraising has been very successful and gives us the confidence and financial backing to continue acquiring fantastic pubs. The appointment of Alex and Rupert is a huge plus for The City Pub Company and I am delighted that they have come on board to work alongside me. They are very experienced pub retailers and their appointments to their respective companies will give them focus to develop and expand these. They both understand the entrepreneurial culture required of running and developing a small pub chain of independent free houses. Their appointment will allow me to focus more time on finding new premium sites across Southern England and obtaining further investment to finance our future expansion.”

Botanic Inns goes into administration: Administrators have been called in to Northern Ireland’s biggest chain of pubs, award-winning Botanic Inns. The chain had stressed two weeks ago that it was business as usual at its pubs — despite a winding up order over one of its companies. Botanic Inns, which operates five pub businesses and an off-licence out of 14 venues in the group, faces a debt of more than £60,000 for its Belfast office headquarters, which was the subject of the winding up order. Almost all the other venues are under the ownership of sister company Kurkova Limited. Administrators KPMG are seeking a buyer for both Botanic Inns and Kurkova as the businesses have fallen victim to the economic downturn. John and Helen Miskelly, the landlord of the company’s Ormeau Road headquarters, had in April lodged a winding-up petition against Botanic Inns Ltd over a debt of £60,615. The company vacated the office and was using an office above its Horatio Todd’s venue in east Belfast as its headquarters. Botanic Inns grew into Northern Ireland’s biggest chain on the strength of its original pub, The Bot on Belfast’s Malone Road, under former owner Jas Mooney. The company vacated the office after the winding up order and has been using an office above its Horatio Todd’s venue in east Belfast as it headquarters. Of the news of the winding up order a fortnight ago, Colin Neill, chief executive of Pubs of Ulster, said: “We are disappointed to see the media coverage about the position the Botanic Inns group has been placed in by the landlord of one of their administrative buildings. The move by the landlord of the Botanic Inns group headquarter building will not impact on the day-to-day trading at bars and pubs owned by the group. We are working closely with the management at the Botanic Inns group and as one of our most high-profile members are confident that they continue to provide a quality offering. They have our full support.” Outlets that trade under Botanic Inns Ltd, all in Belfast, are The King’s Head, The Botanic Inn, off-licence Drink, Madison’s Hotel, The Elms and The Northern Whig. Two years ago administrators were appointed by the Republic’s bad bank Nama to Lanyon Trading and Lisk, owned by the County Clare-based landlords of those pubs. Botanic Inns is a tenant paying rent to administrators appointed by Nama, Keenan Corporate Finance. Botanic Inns has been named as one of the top 100 UK companies to work for in the past. 

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