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Morning Briefing for pub, restaurant and food wervice operators

Fri 28th Feb 2014 - Propel Friday News Briefing

Story of the Day:

Better burger branded boom bottoms out in the US: Influential US magazine Restaurant Finance Monitor has questioned whether the branded better burger boom in the US is fizzling out after lacklustre performances from a number of major players. The magazine reports that Five Guys has had a “decline in sales for two years now”. Elsewhere, Mooyah, the Dallas-based better burger concept, has changed its chief executive and the way it produces is burgers after disappointing sales. A six–unit Smashburger franchisee, SoCal Eats, filed for bankruptcy in January after failing to find a buyer for its sites. The magazine also reported Smashburger, which parted company with its chief executive Dave Prokupek last year, had been unable to find a private equity buyer because of declining sales. The magazine stated: “Five Guys and Smashburger, the two chains expected to thrive, are seeing sales declines. Five Guys’ unit volumes have taken hits for two straight years. Smashburger put itself up for sale last year and lured a number of private equity buyers. They backed off after discovering the chain’s traffic decline.” The magazine argued that the biggest problem at many fast casual better burger brands is, ironically, the waiting times – many busy customers don’t want to wait lunchtimes. Many better burger concepts also lack a drive-thru element because they were built at “in-line” developments. Restaurant consultant John Gordon has argued that a number of US better burger sites have seen steep 30% declines in business in their second year at marginal locations when the honeymoon period ends. Branded operators may be losing out to independent better burger sites – the number of independent burger joints increased by 7.2% to 6,187 for the 12 months ending September 30. This year’s increase is more than twice the 2.9% growth indie burgers achieved the previous year. However, the first UK Five Guys site opened in Covent Garden last year and is rumoured to be taking £150,000 a week.

Industry News:

Coffee is ‘absolutely key’ to capturing breakfast market, Martin tells casual dining operators: For any operator trying to extend into the breakfast market, the coffee offer is absolutely key, Peter Martin, vice-president of the research company CGA Peach, told casual dining operators this week. Speaking at the Casual Dining Show in Islington, North London, Martin said: “Getting coffee right is almost your starting point if you want to get breakfast right.” While the biggest drivers for the lunchtime day-part for consumers were speed and convenience, for the mid-afternoon day-part “recharging”, both of themselves and their devices, such as smartphones, and for the early evening meeting up with friends, for breakfast and mid-mornings, coffee was king, he said. Of the total UK population, 6% have used MacDonald’s for breakfast in the past six months – around 3.5 million people. It was followed in popularity at breakfast time by Costa, Greggs, Starbucks and JD Wetherspoon, with 2% having used Wetherspoon for breakfast in the past six months. McDonald’s, Martin said, “has invested massively in the quality of its coffee – even selling it in retail now – and it’s been paying off in terms of the breakfast offer. When Wetherspoon introduced coffee, it studied Starbucks, researched it massively, knowing it had to have quality coffee to get it right. A third of Wetherspoon’s customers now, who go to eat, will have a coffee. It’s perhaps not surprising that the one casual dining brand that does well in those early day-parts is Carluccio’s – in our research it has the highest ratings for coffee.” However, Martin warned, research showed there was massive overlap in customers’ use of brands – “people will not necessarily walk by a Caffé Nero to get to a Starbucks. Location is also key”. Martin added that it was “probably most important of all” to “get your early morning head on. Where it often falls down is that if your staff still have a casual dining or bar mentality and are not on it 100% thinking about what a customer needs at that time of day, it ain’t going to work.”

TripAdvisor hits 150 million reviews: TripAdvisor has announced that 150 million reviews are now on the site. The company said this is a 50% increase year-on-year, with around 50 million added during 2013 – this is around 90 reviews submitted every minute. Around 25,000 members have submitted more than 100 reviews and the Luxor Las Vegas has the most reviews – 13,700.

London Heathrow confirms food and beverage line-up for new Terminal 2: Heathrow airport has confirmed the food and beverage line-up for Terminal 2, due to open in June. The choices resulted from passenger requests for more premium restaurant experiences and a greater number of British brands in The Queen’s Terminal. The two-year tender process resulted in more than five proposals for each position, surpassing the number of bids received for Terminal 5 opening. Those confirmed for openings are: London’s Pride by Fullers, The Gorgeous Kitchen, Costa Coffee, The Flying Chariot by JD Wetherspoon, EAT, a Heston Blumenthal restaurant, YO! Sushi, Caviar House, Leon, and Caffe Nero.

Star Pubs & Bars to trial Orderella app in 40 sites: Star Pubs & Bars, the 1,200-strong tenanted operator owned by Heineken, is to trial the Orderella mobile ordering app in 40 sites from April. The leased pub division will undertake the trial before being potentially rolling out the app to the entire estate. Orderella chief executive Dennis Collet said: “The trial of our ordering app at 40 of Star Pubs & Bars presents an exciting opportunity for Orderella. Further enhancing the social experience at Star Pubs & Bars, the trial of Orderella will mean that customers can avoid queuing. It offers huge benefits to the operator, allowing them to give their customers a better level of service and increase staff efficiency.”

Yummy Pub Company boss – sales need to grow by 6% to stand still: Yummy Pub Company co-founder Anthony Pender has argued that current input cost increases mean that his company needs to grow sales by 6% in like-for-like terms to mitigate them. Speaking at the Casual Dining show Future Directions of the Pub Sector panel, hosted by Propel managing director Paul Charity, he said: “We are getting to the point where we need £750,000 (turnover per annum per business) to pay head office costs. It requires 6% like-for-likes just to stand still.” David McHattie, chief executive of the ALMR, said: “We have seen an erosion of margins on everything that we do, and it’s government policy that’s mainly responsible for stripping away our margins. We talk about business rates and all the other costs, but labour is our biggest cost and with every change to the National Minimum Wage, or the Living Wage, it hits our margins.” Pender also argued it is becoming harder and harder to find pubs in central London. “Pubs are available, but it’s becoming like the late 1990s, where you need to think about refinancing and it makes me cautious, having seen mistakes the previous generations have made.”

Branded casual dining winning at the expense of independents: Casual dining sector is set for further success, but it’s important to understand the nuances of what will lead to that success and what will lead to failure, said Simon Stenning, strategy director at foodservice market intelligence provider Allegra. Speaking at the Casual Dining show in London yesterday, Stenning talked of the dynamic branded market. “We’re seeing considerable growth, £5.5bn over five years,” said Stenning, going on to identify the key areas of success as all-day dining and informality. “The consumer legacy from the recession is that spend on eating out is reducing, however spend per individual is increasing. Growth last year was 0.9% because it’s a tale of two halves: we’re seeing brands growing exponentially but at the expense of the independents, which make up the bulk of the market.” Stenning warned operators to be mindful of future trends that will impact by 2020. “There will be a market reduction in the 15-24 year old age group as the population gets older and we have more over 65s. 15-24 year olds eat out more regularly, which means the number of meals sold, even if you increase the frequency, will show a real term decrease in ten years. The challenge for the industry is to meet market needs of the over 65s, remembering it’s not a simple as giving them soup.” Stenning added: “It’s a changing universe. Who’d have thought that stations would have full service restaurants side-by-side with Patisserie Valerie? Kings Cross hasn’t got a McDonald’s, Burger King or KFC any more.”

Company News:

NZ’s BurgerFuel gourmet burger chain eyes UK after Subway deal: The New Zealand gourmet burger chain BurgerFuel is targeting the UK, the US and other world markets after a deal that saw the founders of Subway take a 10% stake. Franchise Brands, an investment firm established by Subway founders Fred DeLuca and Peter Buck, paid NZ$8m (£4m) for the stake, in BurgerFuel, which currently operates 55 stores in New Zealand, the Middle East and Australia. The deal allows the New Zealand company to target existing Subway franchisees in the US and other markets who may want to branch out into a new brand and open a BurgerFuel store. BurgerFuel’s chief executive, Josef Roberts, said: “The whole point of this deal is, we can access applicable Subway franchisees who are in a position to grow their business beyond a Subway. So effectively that’s a catchment market worldwide, everywhere.” Roberts said BurgerFuel could also utilise Subway’s existing infrastructure in new markets, such as administration and procurement of food supplies, as well as equipment and building materials for new store fit-outs. He said BurgerFuel hopes to open 1,000 new stores over the next eight years. “South America is a key market and obviously the emerging markets like China and India are of interest,” Roberts said. “The UK is also a potential market.”

Food and Fuel sees margin slip as profits rise: Food and Fuel, the London gastro-operator headed by former Spirit chief executive Karen Jones, saw its operating margin slip slightly to 16.1% in the year to 2 June 2013 from 16.5% in the year to 27 May 2012. The company, which ran 11 outlets during the period, saw gross profits rise 8% for the 53-week period, to £4.08m, from £3.86m in the 52 weeks of the previous financial year. Turnover rose by 8% to £10,881,485 compared to £10,074,467 the year before, linked in part to an extra week in the most recent financial year. Ebitda was up 2.8% to £655,000 as the cost of sales rose 9.5% to £6.8m. Operating profit was up just 0.5% at £285,600, but a sharp drop in interest payable saw profit before tax rise 7% to £235,000. Net cash inflow was up 27% to £516,000. The company spent £3.7m on wages and salaries, up from £3.5m the year before as employee numbers rose from 236 to 254. Net assets stood at £3.95m.

Amber Taverns lines up York opening in former lap-dancing club: Amber Taverns, the LGV Capital-backed operator of community pubs led by James Baer and Bryan Wardman, is to open a new pub in York city centre, in the site of a lap-dancing club that shut last year. The company has acquired 127 Micklegate, which housed Bohemia, and plans to open The Micklegate Tap in April. The building was home to Harry’s Bar until 2002, then The Bedroom, then The Room, before opening as Bohemia. It has been empty since last March, when Bohemia closed amid financial troubles. Gary Roberts, Amber Taverns operations director, said the pub would stock a wide range of cask and craft ales, with real ales from York Brewery featuring heavily. Other beers will include Affligem and Revisionist Craft Lager, and there will be a range of draught ciders, bottled beers, spirits and wines. The pub will not serve food.

McDonald’s UK finance director report franchises set for 90% Return on Investment in iced drinks range equipment: McDonald’s UK’s finance director Paul Pomroy has reported that franchisees’ investment in ice drinks equipment has been a big success with a 90% Return on Investment. He said the company’s finance department drove the process from initial development and testing to the rollout itself and creating a business case for its franchisees to invest in the new equipment, which had to be imported from the US. “The finance team worked on currency hedging, bulk ordering, procurement and the most cost-effective way to move the equipment around,” said Pomroy.

TLC Inns is advanced talks for third Grand Central site: TLC Inns, the pub and restaurant operator led by Steve and Jo Haslam, is in advanced talks for its third Grand Central bar and grill site. The site, believed to be in East Anglia, is a freehold. The company, which also runs three Enterprise Inns site and owns two freeholds, opened its first Grand Central in Basildon, Essex, in 2012 and is due to open a second Grand Central in Ely, Cambridgeshire at Easter.

JD Wetherspoon to have pubs named after both Eric Morecombe and Ernie Wise: JD Wetherspoon is to honour comic Ernie Wise by naming its forthcoming pub in Morley after him – it will be called The Ernest Wiseman. Wetherspoon founder and chairman Tim Martin said his company is now in the process of contacting Ernie’s widow, Doreen, to get the official green light for the naming. He said; “Ernie had local links and it’s a fitting name. For Mrs Wiseman to be happy with it would be the icing on the cake.” The pub is opening within the former Blockbuster store and Arthritis UK shops on Queen Street. The company already has a pub in Morecambe called The Eric Bartholomew after Ernie’s comedy partner.

Red Letter Days adds Starbucks to voucher scheme: Red Letter Days has added Starbucks as a Lifestyle brand partner in its voucher scheme. Claimed to be the most inclusive incentive and reward solution in the market, Lifestyle gives customers access to more than 16,000 dining and pub venues. The voucher is flexible in its price point, starting as low as £5 and ranging to £1,000, and can be utilised as a tangible gift-card, paper voucher, sent as an e-voucher or provided as a digital e-code. Lifestyle’s success and growth in 2013 was been driven by a general uplift in UK voucher market. According to the UK Gift Card and Voucher Association, the B2B sector saw sales increase to £922m, which is a 3% increase from 2012.

Loungers secures Amersham site after five years: Cafe bar brand Loungers has won planning permission to convert a former toy shop in Amersham, Buckinghamshire into a cafe-bar, after first fixing on the town as a target in 2009. Alex Reilley, Loungers managing director, told the Bucks Free Press: “We’ve been actively looking for something in Amersham for near enough five years now. We’re delighted to finally secure premises and planning permission. While there are a lot of good restaurants, there isn’t anything in the town that offers informality and placement that our concept offers.” However, before building work can begin details on how the new bar would be soundproofed to protect neighbours needs to be submitted to the council. A total of 12 letters of objections to the plans were received by the council, with neighbouring residents raising concerns at a loss of privacy for homes in adjacent Woodside Close and an increase in noise levels.

Chinese Buffet plans eighth site in Blackpool after Santander deal: The Bolton-based chain The Chinese Buffet is to open a site in Blackpool after securing £900,000 in funding from Santander Corporate & Commercial. The chain, led by managing director Peter Wu, opened its first restaurant in Bolton in 2006 and has since opened others in Wigan, Wakefield, Preston, Wrexham, Halifax and St Helens. Last month, it agreed to take a site in the Centenary Square development in Bradford, one of three new outlets planned for 2014. It wants to open more than 18 new restaurants in the north west region in the next five years. Nancy Butler, relationship director for Santander Corporate & Commercial, said: “The team behind The Chinese Buffet brand have been rightfully praised for developing a well-known, popular brand in a very competitive marketplace. We look forward to working with them further and helping the group meet its business aspirations.”

Ex-YO! Sushi marketer extols virtues of guerrilla marketing: Guerrilla marketing, getting back to basics, and understanding how to ‘get your claws’ into the next sale, are key tactics in improving sales, Mark McCulloch, founder of Spectacular Marketing, told the Casual Dining show. McCulloch, who has 14 years’ brand, marketing and digital experience, including working for Barclaycard, YO! Sushi and Pret A Manger, said: “When it comes to your marketing budget, start with zero and see how everyone triples their efforts. Better to start there and work your way up to £3m rather than working your way down to zero.” Effective and non-expensive marketing ideas he suggested included: A-boards and stand-out signage outside the venue; Wagamama’s bike seat covers, which displayed a new venue opening, and could be popped over any nearby bicycle; bags – remember how well-known Selfridges and Pret’s bags are; team up with other local businesses – offer the local newsagent to ‘take care of his receipt printing’ in exchange for advertising your venue; offer free coffee to the local hairdressers; offering free lunch to staff at the busiest retail outlet if they talk about you to their customers. Yo! Sushi did this with a Cath Kidson store in Bath and it increased sales, said McCulloch.

Tim Bacon – there’s a place for targeted discounts: Voucher and discount offers have devalued the market and brands, but a more targeted strategic approach to discounting can work, said Tim Bacon, chief executive and co-founder of Living Ventures. “We have trialed a process in Glasgow where a site was struggling and losing money. We introduced a 50% discount scheme and that resulted in our cutting our £400,000+ losses to £90,000. We targeted 4,000 people on our databases, offering them the discount. It resulted in the venue being 80% full of people using the discount, but what it did do was show other people walking past, who were unaware of the discount, a full restaurant,” said Bacon, speaking at the Casual Dining show in London. “We went on to make £50,000 that year, and now turnover has grown to three quarters of a million. When you’ve got a site that struggles with its location, you have to find its audience. Now, this site has 30% of its trade from those 4,000 customers with the vouchers.”

Casual Dining Show names design winners: The Casual Dining show launched its first Casual Dining Design Awards this week. The three judges, under the chairmanship of designer David Worthington, described the entries as producing great and exciting work, and talked of the role design played in creating ambience as well as bringing the customers through the door. Best Designed Independent Restaurant: Highly commended: Rosa’s Thai Café, London, designed by Gundry And Duckers/Buro Creative. Winner: Graze Bar, Brewery & Chophouse in Bath, designed by Simple Simon Designs; Best Designed Multiple Restaurant: Highly commended: Chilango, London designed by I-AM Associates. Winner: Vapiano with sites in Austria and Germany, designed by Matthew Thun, Milan: Best Designed Casual Dining Pub: Highly commended: Hall & Woodhouse, Portishead, Somerset, designed by Mackenzie Wheeler. Winner: No 11 Pimlico Road, London, designed by Buro Creative/Fusion DNA. The judges were: Theo Williams, formerly head of design at Habitat and John Lewis, now creative director of Designed & Sourced; Afroditi Krassa, founding director of Afroditi Krassa, formerly of St Martin’s and the Royal College of Art, who has worked with Julian Metcalfe on Pret and Itsu; Simon Kincaid, associate director of Conran & Partners.

Angel Hotel sold to group operator: The Angel Hotel, Coleford has been sold by agent Christie + Co. Set in the Forest of Dean between the River Wye and River Severn, the hotel has seen many changes over the centuries. The venue was purchased by an unnamed group operator who will be renovating the building and re-opening the letting rooms by bringing them back to its former glory. Nicholas Calfe, of Christie + Co in Bristol, said: “The Angel occupies a prime location in the historical town of Coleford and will relish in the new buyer to invest and make it a vocal point for the town, which would be hugely beneficial to the community.”

Wyn Ellis increases Whitbread price target after yesterday’s results: Numis Securities leisure analyst has increased his Price Target for Whitbread shares after yesterday’s full year results. He said: “The Whitbread Fourth Quarter 2014 trading update is encouraging with strong like-for-like sales growth in 4Q (11 weeks to 13 February) at both Premier Inn (+8.3%) and Costa (+7.3%) and a much-improved performance from Restaurants (+4.4%). Total group sales in 4Q were up 14% (+15% at Premier Inn and +18% at Costa). This is a little ahead of our current forecasts but Premier Inn continues to underperform the competitor set in terms of RevPAR growth. Whitbread says that it is “on track to deliver full year results towards the top end of the range of current expectations”. We are increasing our target price to 4,000p, from 3,600p.” Of Costa Coffee performance he said: “Costa, goes from strength to strength and we estimate that now has had 47 consecutive quarters of like-for-like revenue growth in the UK.”

Nick Batram – we’re downgrading from ‘Hold’ to ‘Buy’ on Domino’s: Peel Hunt leisure analyst Nick Batram has downgraded his recommendation on Dominos shares from ‘Buy’ to ‘Hold’ after yesterday’s results. He said: “The problems in Germany are well known and losses came in at £7.0m (£2.6m). Post the year-end the business has been restructured but new guidance is for a loss of £5-7m in 2014 versus £4m previously. Exceptional costs were also higher than previously guided – with operating exceptional of £27.5m – £19.6m of which relates to impairments mainly in Germany. Interestingly, the 25% German minority has been bought out for an option over 3m shares at 577.7p per share. Switzerland also returned a loss, £600,000, which was twice what we expected. For 2014, the business was expected to break even but guidance is now for a small loss. Current UK trading is strong, +14.6% even against a relatively weak comparative (+1.6%). However, we expect to reduce our 2014 forecast by around £2.5m to reflect updated guidance on Germany and Switzerland. It is possible that the new chief financial officer wants to reset guidance to a more conservative level but with poor visibility in Germany and the shares within touching distance of our fair value we feel a downgrade to Hold is merited.”

Brighton hotel sold to Vietnamese investors off £1.8m asking price: A Vietnamese couple, Ms Linh Pham and Mr Luong Nguyen, has bought the freehold of the 28-bedroom Urban House Hotel, which is situated in New Steine seafront square in Brighton through agent Fleurets. Will Thomas, from Fleurets’ Brighton office, said: “It is great to see the Urban House Hotel being sold to such enthusiastic buyers who are looking to enhance the quality of the accommodation within the city, especially at a time when we have seen a number of high profile closures. The hotel is bigger than most, but in this instance it was the size of the hotel that appealed to the buyers. I look forward to seeing the restyled hotel once the works are completed.”

Buccaneer Holdings reports “marked improvement”: Buccaneer Holdings, the eight-strong South West of England pub operator, has seen what its directors called “a marked improvement on the previous year, in spite of a continued difficult trading climate”. The company saw its gross profit margin drop fractionally to 67.2% for the year to 1 November 2013 from 67.9% for the same period in 2012 as gross profit itself stayed steady at £4.33m while sales rose just 0.77% to £6.44m and the cost of sales jumped 2% to £2.11m. However, a fall in administrative expenses of more than £50,000 to £4.4m saw operating profit more than double, to £161,000 from £72,000. Net cash inflow fell from £341,000 the previous year to £272,000, while capital expenditure was down 35% to £120,000. In a report deposited with its accounts at Companies House, Buccaneer’s directors said a small dividend of £6,334 is to be paid, to reflect profits for the year of just £86,000, the company said.

Hotel developers take on North Wales pub shut for four years: The company behind the development of Gwrych Castle near Abergele, in North Wales, into a luxury country house hotel and spa are working on re-opening a former Punch Taverns pub, the Tal y Cafn in Eglwysbach, Conwy, which has been closed for four years. Planning permission was granted by Conwy County Council for alterations at the pub at the end of January, and tradesmen have been on site since the beginning of the week. Craig Edwards, one of the owners of Castell Developments, the pub’s new owner, said: “Works are progressing nicely and I foresee six months work to complete the renovation and extension. Castell Developments are aiming for the Tal y Cafn to be open for the operators to host an event over one of the August Bank Holidays. Our young classically trained chefs will be working with the finest produce sourced from the region. Our aim is to gain a reputation as one of the most welcoming places to enjoy all the best this spectacular region has to offer.”

Peach founder hails ‘amazing people’ after Kenya charity trip: Lee Cash, co-founder of Peach Pub Company, has hailed the ‘amazing people’ he met on a trip to Kenya with nine members of staff from company pubs in Oxfordshire and Bedfordshire as part of the work of the company’s new charity project, the Peach Foundation. Cash and the Peach team went on a week-long conservation trip to the Enonkishu Conservancy on the northern boundary of the Serengeti-Mara ecosystem, where they planted 20,000 two-inch trees and built a fence around the conservancy, helping to protect an area of land under growing threat. They also presented a cheque for a million Kenyan shillings (£10,000), collected from donations made by customers at Peach’s 16 pubs, to the conservancy to go towards African wildlife and conservation projects. Cash said: “I’ve visited Kenya a couple of times and found it to be an extraordinary place. Kenya is a place that’s close to our hearts, both as a business and as individuals. It’s also been a life-long passion of my business partner, Hamish Stoddart, who has a personal connection with the country as he has family there. Both of us have a real sense of well-being from having been involved with this special part of the world, which does need to start doing things differently if it’s to save its beautiful natural habitats from vanishing. We planted three fields of trees, which in time will grow into a forest, met some amazing people and had some amazing experiences on the way.” The Peach Foundation aims to raise funds for two causes, the communities in which the company’s pubs are based and projects working towards the future sustainability of the world. 

SSP to recruit 800 apprentices in 2014: Transport hub foodservice specialist SSP is to recruit 800 apprentices in 2014, of which it hopes 20% will be occupied by candidates aged 16-18. As part of its recruitment initiative, the UK division of the business has launched its first Traineeship programme in selected M&S Simply Food stores at Birmingham New Street Station and locations in London. SSP has been a partner of M&S Simply Food for 13 years, operating stores at a number of UK airports, train stations and hospitals under an exclusive franchise arrangement. The trainees will have the opportunity to learn and practice skills on the job, whilst also having a support network designed to develop their work related skills and attitudes. Christine Holland, national apprenticeship manager SSP UK & Ireland, said: “The launch of our new Traineeship programme outlines our commitment to bringing more young people into the hospitality industry. We need talented people who share our passion and enthusiasm for delivering great customer service. Our bespoke training and development programmes encourage young people to learn while they earn and we ensure we nurture, support and develop them towards genuine career prospects.”

KFC, Burger King and Hey Potato sign for Bradford food court: KFC, Burger King and Hey Potato have taken the first three of seven places in the food court at the Broadway shopping centre in Bradford. Hey Potato, based in Rotherham and founded by Bharat Patel in 2010, runs outlets in shopping centre food courts such as Meadowhall, Merry Hill and Derby. Developers Westfield and Meyer Bergman said they were in discussions with a number of national and Bradford-based food and restaurant operators to complete the food court lettings.

Cafe Rouge owner sees operating profits fall 13% as losses climb: Tragus Group, owner of the Cafe Rouge, Bella and Strada chains, saw operating profits for the 53 weeks to 2 June 2013 fall 12.9% to £34.59m from £39.71m in the 52 weeks to 27 May 2012. The group, which is owned by the private equity firm Blackstone Group, recorded a loss of £33.72m for the year, up from £19.32m in 2012. The loss was more than double that recorded in 2011, £14.55m, after net exceptional costs of £7.03m. Net debt rose to £324.58m from £314.97m the previous year. Turnover was up 3% to £294.82m from £286.27m in the 12 months to 27 May 2012. However, like-for-like sales fell 1.6%, because of a reduced level of promotions, the temporary closure of a number of sites for redevelopment and the “challenging” economic environment. Like-for-like sales fell 0.9% in 2012. Tragus is one of the largest mid-market restaurant operators in the UK, with 300 outlets at the end of the last financial year, up one on 2012. In its directors’ report, Tragus said the group had continues its new opening programme, with seven new sites. The average cash return on investment on new sites opened over the past three years that had been trading for more than six months was in line with expectations, the report said. At the same time a rebranding programme was commenced during the year at Cafe Rouge and “selected” Bella sites. It said the group “will continue to operate restaurants for the foreseeable future”, and “while challenging economic conditions are expected to continue, the directors consider that the group will be resilient to these pressures due to the strength of [its] brands, strong geographical locations and commitment to its products, services and people.”

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