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Morning Briefing for pub, restaurant and food wervice operators

Tue 14th May 2013 - Botanic Inns, Jamie Oliver and M&B

Story of the day:

Six flagship Botanic Inns pubs sold by administrator in pre-pack to Horatio Group: The administrator for Botanic Inns has sold six flagship sites to Horatio Group, controlled by former manager director Stephen Magorrian, in a pre-pack administration that saves 300 jobs - Magorrian recently incorporated three companies, Horatio Enterprise, Horatio Taverns and The Fly Bar. Businesses sold are: The Botanic Inn, Madisons Hotel, The Kings Head, The Northern Whig, The Elms and The Fly. A statement from the administrators said they were confident of selling the remaining pubs operated under sister company Kurkova. A statement from KPMG said: “The Joint Administrators continue to trade the seven venues – it is business as normal. These seven businesses are: The Apartment, The Kitchen Bar, McHugh’s, Parador, Molly Browns, Denvirs and Ryans Bar. The Joint Administrators are confident of achieving a successful sale of these venues in due course and also securing the continued employment of the remaining 300 plus staff.” Originally a family-owned company, Botanic Inns had been trading since 1857 through its first outlet and flagship brand, the Botanic Inn. It grew into Northern Ireland’s biggest chain under former owner Jaz Mooney. In recent months, Botanic Inns faced creditor pressure, including a debt of more than £60,000 for its Belfast headquarters.

Industry news:

Good Food Guide unveils ten top regional restaurants: The Good Food Guide has revealed the ten regional winners in its Readers’ Restaurant of the Year 2014 awards. The annual awards invite members of the public to nominate their favourite restaurants, pubs and cafés from around the UK. The awards always gather tens of thousands of entries and are an insightful gauge of where UK foodies love to eat out. This year’s awards saw an impressive 39,000 nominations received, which have all been verified by The Good Food Guide judges in order to select this year’s winners. The ten regional winners are: East – The Leaping Hare, Stanton, Suffolk; London – Boqueria Tapas, Brixton; Midlands – Turners, Birmingham; north east – Eric’s Restaurant, Huddersfield; north west – Delifonseca, Brunswick Dock, Liverpool; Northern Ireland – Balloo House, Killinchy; Scotland – The Gardener’s Cottage, Edinburgh; south east – Purefoy Arms, Preston Candover, Hampshire; south west – The Seahorse, Dartmouth, Devon: Wales – Sosban, Llanelli, Carmarthenshire. Elizabeth Carter, consultant editor of The Good Food Guide, said: “We’ve had a really high standard of entries to The Good Food Guide’s awards this year, which is a great indicator of the many fantastic restaurants, pubs and cafés we have around the country offering outstanding cooking, stellar service and an all-round top-notch dining experience.” 

KFC sales drop 36% in China in April: KFC sales dropped by 36% in April in China as customers remained concerned about the safety of its chicken and the spread of bird flu. Pizza Hut sales went up 5%. Young Brands, which last year received 51% of its revenue from China, is now facing a deadly outbreak of bird flu in the Asian nation. “Publicity surrounding Avian flu in China has had a significant, negative impact on KFC sales,” Yum stated. “Historically, the impact of this publicity has initially been dramatic at KFC but relatively short-lived.”

Free Beer app hits 1,000-user mark: The ‘Free Beer’ app has notched up its 1,000th registered user six weeks after launch. It now has 12 venues signed up across London, including Beds and Bars and Best Place Inns venues. Customers have already claimed hundreds of free beers using the app. App developer Bradley Channer said: “The idea of offering one free beer when a customer makes any drink or main meal purchase has really benefited venues around London and helped encouraged people back into their local bars. We now need more venues in London to start taking advantage of our database of beer drinkers.” The Free Beer App is free for venues to join and the only costs are a bottle of beer and 20p commission. For more enquiries www.ilovefreebeer.com

Westfield reports sales up at two London centres: Westfield has reported that sales at Westfield London and Stratford City rose 2.6% and 7.7% respectively in the first quarter of 2013. The combined annual sales from the group’s two London shopping centres is now in excess of £1.9bn.

Technomic - top ten US restaurant chain grow sales by more than 50% in ten years: The top ten US restaurant chains grew sales by more than 50% in the decade until 2012, with total sales rising from $64.8bn in 2002 to £104.3bn last year. McDonald’s stayed in number one spot, growing sales from $20.3bn to $35.5bn. Burger King slipped from second place in 2002 ($8.3bn of sales) to fifth last year ($8.5bn of sales). The largest gain was seen by Starbucks, which moved from the ninth position in 2002 ($2.9bn), up to third in 2012 ($10.6bn). Brands new to the top ten in 2012 were Dunkin’ Donuts ($6.2bn) and Chick-fil-A (£4.6bn), pushing out Applebee’s and Domino’s Pizza.

Fortescue to step down from Portman Group: Portman Group chairman Seymour Fortescue will step down on 18 June after four years in the role. Fortescue is to become the first chairman on the Short-term Lending Compliance Board, a new independent body that has been set up by the payday lending trade body, the Consumer Finance Association (CFA). The new board is tasked with raising the standards within the payday lending industry. A successor at Portman will be announced in due course.

Company news:

Pub operator beats developers to buy Forest Gate pub: An unnamed pub operator has bought The Railway Tavern, Forest Gate, beating off competition from developers. The building, which was originally built to serve Victorian commuters, has been sold by agent AG&G after six offers were received, including a number in excess of the £725,000 guide price. They included developers, investors and retailers but the eventual buyer is a pub operator. “It’s good-sized pub that was rebuilt in period style in 1925,” said AG&G’s Michael Penfold. “Even now, it is in an extremely convenient position for commuters and is just a four minute train ride to Stratford. When Crossrail comes in, it will be an even more attractive opportunity.”

Crowdcube raises £1.5m in three days – for itself: Crowd-funding website Crowdcube has raised £1.5m in three days to fund its own expansion. Crowdcube founder Luke Lang said: “We successfully hit our £1.5 million target in just three days from 259 fantastic investors. Our existing investors met the initial funding target of £250,000 within the first five hours of the pitch going live with the final million pounds was invested within 24 hours. The investment sets a new world record for funds raised via an equity crowd-funding platform.”

Analyst Douglas Jack raises M&B price target on “improving prospects”: Numis Securities analyst Douglas Jack has raised his price target for Mitchells & Butler shares from 400p to 450p on “improving prospects”. Ahead of first half results on Thursday 23 May, he said: “We expect H1 profit-before-tax to be up 9% to £74m, driven by expansion and falling interest costs. We expect to hold our forecasts on which basis we believe M&B’s shares offer good value, at a 10% EV/EBITDAR discount to the licensed retail sector, despite it possessing one of the best pub estates (45% located in south-east England; 85% freehold). Six new sites opened in Q1 with circa 40 new openings/conversions expected over the full year. M&B can comfortably afford this planned expansion programme (half freehold) with net debt/EBITDA forecast to fall to 4.2x this year.”

Drake & Morgan to launch gin and tonic hamper: Bar operator Drake & Morgan is to launch a gin and tonic hamper, available to pre-order from 1 June at all five of the group’s bars - The refinery on Bankside, The parlour in Canary Wharf and The Anthologist, The Folly and the Drift in the City. It stated: “There’s nothing more refreshing on a hot day than a zesty G&T and this summer it’s all about taking it out of the bar and into the park. The beautifully presented hamper is yours to keep to see you through picnic season.”

Marston’s opens its first new-build pub in Scotland offering carvery: Midland-based Marston’s opened its second £3m new-build pub in Scotland, The Steam Wheeler, yesterday, close to the Braehead shopping centre and King George V Dock in Glasgow. The company stated: “The Steam Wheeler is the first of our Scotland sites to offer a daily carvery, offering freshly prepared meats and seasonal vegetables.” The venue also has a ‘cake-away’ offers that allows customers to take a dessert home with them. Marston’s Inns and Taverns managing director Pete Dalzell said: “Customers worldwide want great service in a great environment, served by great staff and great value for money. Scotland is no different against those measures.”

Jamie Oliver launches pop-up diner in Piccadilly Circus: Jamie Oliver has launched a “long-term pop-up” hot dog diner in Piccadilly Circus - it is expected to be open for two years. The venue will be “making and smoking its own hot dogs, dry-aging steaks and serving amazing ketchups, BBQ sauce, mustards and house pickles”. The executive chef is Arthur Potts Dawson, who had set up Acorn House and Water House (and who previously worked at River Cafe, Petersham and Fifteen). There’s also a “Piccadilly” piccalilli, made exclusively by Rubies in the Rubble, a small charity-run project that only uses ingredients thrown out by Covent Garden market. The Diner will serve “classic dishes, grilled chicken and steaks, main salads, burgers, sides, savoury waffles and desserts”.

Stonegate Pub Company to assign lease of Eltham pub to McDonald’s: Stonegate Pub Company is set to assign the lease of a community pub to McDonald’s for a drive-thru. Plans for The Dutch House pub, in Sidcup Road, to be turned into a drive-thru McDonald’s were submitted to Greenwich Council last month. A spokesperson for Stonegate Pub Company, which leases the Dutch House, said: “The company is currently under contract to assign this lease to McDonald’s, subject to planning approval. There is no confirmed timetable for the conclusion of this process.” A spokesman for McDonald’s said: “A new McDonald’s would bring investment to the area and provide 65 full and part-time jobs for the community.”

Cains in discussions to sub-contract brewing to third party: Robert Cain Brewery in Liverpool is in discussions to sub-contract brewing to a third party after suspending production last week. The Cains plant will be mothballed - production stopped at the plant off Parliament Street last week and will not re-start unless Cains win permission to redevelop into a £50m ‘Brewery Village’ to include a craft brewery. A spokesman told The Liverpool Echo: “Brewing at the site has been suspended while we progress our Brewery Village scheme and we are in negotiations to sub-contract the brewing of Cains products to a third party brewery during this interim period. The nature of our brewery is such that its operation cannot be scaled down in a simple fashion and it would be financial madness to continue with such huge overheads for a relatively small brewing operation. We have said all along that the brewery is at the heart of our plans for the Brewery Village scheme and this remains the case. The existing brewery will be redesigned during the anticipated redevelopment so that it is more efficient and better suited for future use. We are continuing to discuss matters with our advisors about how we best manage winding up the current canning and brewery side of the business. Cains is alive and kicking and we are extremely positive about our future plans, which will secure a brewing in the city for decades to come.”

Budget hotel sector hots up with launch of Cityroomz: Budget hotel specialist Sleeperz Hotels has launched Cityroomz – a sister brand offering convenience and comfort at budget prices – with an opening in Edinburgh. Sleeperz Hotels specialises in building design-led premium budget hotels in city centres close to mainline rail stations. It currently operates successful hotels in Cardiff and Newcastle. It has launched sister brand Cityroomz in the Scottish Capital as the latest phase in aggressive expansion plans. Sleeperz is closing in on further sites for Sleeperz hotels in central Glasgow and London, with a 121 room agreement to lease secured for a hotel in Glasgow city centre and a London property at planning stage. The Cityroomz hotel opens on the site of a former Travelodge in Edinburgh’s Shandwick Place, equal distance between Waverley and Haymarket rail stations.

Costa Coffee opens fifth Lincoln site – plans two more: Costa Coffee has opened a fifth site in Lincoln High Street, making a fifth shop for the chain in the city, with a further two openings planned for later this year. The chain is planning two more Costa Coffee shops opening within two months of each other in the Carlton Centre on Outer Circle Road, and Valentine Retail Estate off Tritton Road. There are now five Costas and Costa Expresses in the city, plus four Starbucks and two Caffe Nero.

Living Ventures to open Artisan at the end of June: Living Ventures is to open its latest site, Artisan, Allied London’s Spinningfields site in Manchester, towards the end of June. The 12,000 square foot venue on the first floor of Tower 12 in Avenue North, formerly called Manchester House, is described in Living Ventures’ marketing material as “loft studio meets concrete warehouse - stripped back and raw”. The interior design features sculpture and art installations. There will be two wood ovens used to create a menu offering “flamed meat, fish and unusual pizzas straight from the fire”. Living Ventures will open a fine dining restaurant, called Manchester House, also at Tower 12, in August 2013.

Mere Golf Resort & Spa looks to expand: The owners of Mere Golf Resort and Spa are looking to expand after a multi-million pound refurbishment has upped sales to £10m. The Mere Golf Resort & Spa was given a £15m facelift 12 months ago, which led to the creation of 100 jobs. It is now celebrating a record-breaking year and is on track to turnover £10m for the first time, up from £6.5m last year. Owner Mark Boler and business partner Gary Corbett reported they are on the look-out for similar properties across the region, which they would look to give the “Mere treatment”. Corbett said: “This year is the best year ever.”

Contract caterer reports 35% turnover growth: Organic growth and two acquisitions boosted turnover at contract caterer Host Management by 35% to £20.7m for the year ending 31 December 2012. Operating profit remained flat at £536,000 as Host continues to reinvest its income in support resources to improve and enhance service to clients. Underlying earnings (EBITDA) improved from £589,000 to £729,000. Said finance director Madeleine Musselwhite: “This is an excellent set of results for the team. Our organic growth and retention are both significantly ahead of the industry average. In 2013, I am pleased to say we are continuing to outperform the market – our organic growth is expected to be 15% against an industry average of 3% driving our current annualised turnover towards £30m.” Host now operates over 100 sites across the UK and employs 1,000 staff.

Spirit leased launches new website: Spirit Leased launched a brand new recruitment experience and website this week, www.spiritleasedpubs.com. The new website and applicant management system aims to be one of the simplest sites to use when looking for a pub business to run. Aimed at experienced, high calibre single and multiple operators, the new website profiles the available pub business opportunities in a succinct format and ensures the application process for them is quick and efficient. Managing director for Spirit Leased, Chris Welham said: “We want to target really proficient retailers to run our pub businesses whether leased, tenancy or franchise. Our new website speaks their language. It provides all the essential information they need to know about us, our pubs and our ways of working but it cuts out all the other noise so that ultimately, spiritleasedpubs.com is a website that’s there to help find the right pub business.”

Corney & Barrow’s Broadgate site to close in June: Corney & Barrow’s historic site overlooking Broadgate Circle closes its doors for the last time on 21 June. As part of the wider redevelopment of the Broadgate area, British Land is rebuilding the Circle to create space for multiple retail and restaurant/bar outlets. Ed Gardner, managing director of Corney & Barrow, said: “The Corney & Barrow site at Broadgate Circle is an iconic bar and it will be sorely missed. Many, many people have passed through its doors over 25 years and I’d like to thank them all - staff and customers alike - for their support. We look forward to beginning discussions with British Land later in the year regarding a new C&B venue in the development, which re-opens in early 2015.”

One unit left in new Bath dining quarter: There is only one unit left in Bath’s new dining quarter, the Vaults development underneath Brunel’s iconic railway arches in the city. Graze, Nandos, Gourmet Burger Kitchen, Jika Jika, and The Bertinet Bakery have all opened at the site whilst Prezzo are currently fitting out. With another Vault site currently under offer, this leaves just the one unit remaining, which developer Queensberry is optimistic will be open and trading by this summer.

Former Chicago Rock in Manchester to become nightclub and restaurant: The former Chicago Rock Café on Manchester’s Peter Street is to re-open as a nightclub and restaurant venue called Liv Manchester. Owner Mo Mahamud said: “There are lots of great restaurants and venues opening in Manchester, and it’s great that things are happening on Peter Street too. But Manchester needs something new at the really top end of the market, which Liv is going to deliver.” Meanwhile the first floor will be a restaurant, serving pan-Asian cuisine, and there are hopes to create an outdoor terrace fronting onto the venue which will give the option of al fresco dining too.

Council accused of ignoring law in granting Wetherspoon licence in Sterling: Stirling’s decision in favour of a licence for a JD Wetherspoon pub in the city’s Spittal Street has sparked local claims that the authority is failing to follow Scotland’s liquor laws. Community representatives have claimed the board has failed to act on the requirements to have an “over-provisions policy” and that if one had been in place the application would not have been granted. The Wetherspoon venue will see capacity for drinking increased by 700. Wetherspoons had already been given the go-head for a superpub in Stirling despite its first application being refused by the council and only succeeding after an appeal. The go-ahead was then halted when rival Greene King sought a judicial review of the previous decision by the city’s licensing chiefs. Resident Michael Adam, who objected to the plans, said: “The centre of Stirling already has one of the highest concentrations of drinking venues in Scotland. The board granted the application, thereby increasing the drinking capacity in the locality by over 10%, by not only discounting the opposing arguments of the health board, the two adjacent community councils and local residents, but also bypassing the detailed requirements for conducting a formal assessment of overprovision in the Licensing (Scotland) Act 2005.”

Darrell Wade appointed TGI Friday’s chief operating officer: Darrel Wade has been appointed TGI Friday’s chief operating officer “in recognition of the enormous success of the TGI Friday’s UK commercial department over the past five years”. The appointment will support the next wave of business growth by aligning the operations team with the brand and concept team in order to deliver the ambitious growth plan set out for Friday’s over the coming years. Cain Savizzi takes on the role of senior director of operations. Cain will be supported by Lee Zurybida, who is promoted to operations service manager for the iconic brand. In addition, Terry McDowell, who has recently overseen many successful product launches for Friday’s, has taken on the role of head chef and concept development manager. UK managing director Karen Forrester said: “Friday’s is leading the industry with several new restaurants in the pipeline, brilliant business performance and several awards, including our recent third place finish in Sunday Times Best Places to Work. These feats don’t happen by accident – they come about through dedication, hard work and passion from individuals over a number of years. These individuals come together to form an unstoppable team. Darrell, Cain, Terry and Lee have all been key parts of the journey we have been on and it is wonderful to be able to recognise this with their new appointments.” Wade said: “I’m relishing taking on this new role and look forward to continuing to work with the rest of the board, and our thousands of team members across the country, in driving the growth and development of Friday’s and ensuring operational excellence for all of our guests. It’s a phenomenally exciting time to be the chief operating officer of Friday’s and I’m looking forward to the challenge.” TGI Friday’s has 56 restaurants across the UK in a range of locations. 

New casual dining concept from former Restaurant Group director to launch on Carnaby Street: A new free-range chicken and egg casual dining concept, Whyte & Brown, will open on 8 July in Kingly Court, off London’s Carnaby Street. Overseen by chairman Kevin Bacon (former main board director of The Restaurant Group and non-executive director of Ignite Group), and the brainchild of creative director Fiona Gale, Whyte & Brown celebrates the ‘diversity of cooking with chicken and eggs’. The 3,446 square foot, casual dining restaurant and bar has 132-covers split over two floors and an alfresco courtyard seating 24. Open all day, from breakfast through to dinner, with an average spend of £20, the core offer champions best quality, British, free-range chicken. Dishes include roasted and grilled chicken and a choice of burgers, soups, pies, salads, casseroles, wings and croquettes. Bacon added: “I am thrilled to be part of this fantastic venture and to be working with a team of such talented individuals. Whyte & Brown goes beyond the usual offer of serving exclusively roasted, grilled or fried chicken. It’s a concept that celebrates the extraordinary versatility of the chicken and the egg. We aim to deliver on a range of wonderful dishes, served in a relaxed environment at value for money prices.”

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