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Morning Briefing for pub, restaurant and food wervice operators

Tue 6th May 2014 - Propel Tuesday News Briefing

Story of the Day:

‘Star’ backbench Conservative MP calls for VAT cut for sector: Bristol North West MP Charlotte Leslie has called for a cut in VAT for the sector, arguing it would “unleash enterprise”. In 2013, she was named Backbencher of the Year by The Spectator magazine, in recognition of her work on accountability and patient safety in the NHS. Writing in the VAT Club Jacques Borel magazine, which has been distributed to pubs, Leslie, who is a Conservative MP, stated: “Pubs have always been lynch-pins in our communities – places where news is shared, friendships formed and where great ideas are hatched. But pubs are fighting to survive. Great steps have been made with this government’s decision to finally scrap the hated beer duty escalator, but a great unfairness still exists. Why is it that one-fifth of the price of food and drink in a pub or restaurant goes back to the Treasury in VAT? But if you pop into the supermarket, the Treasury gets nothing at all? Why on earth would you want to penalise small businesses in this way? On “Planet Commonsense”, you would be positively encouraging people to eat and drink in pubs. Young people “pre-loading” with below-cost supermarket booze exerts a toll, most importantly, on their health, but also on our A&E departments, our city centres and, ultimately, the public purse. What is the drink option of choice for unsupervised, underage drinkers? Yes, the below-price supermarket booze deal. This is disastrous. But you don’t have to be a moral crusader to see the sense in putting pubs and supermarkets on a more even playing field on VAT. By some estimates, such a cut would increase jobs and enterprise and, over the medium term, bring hundreds of thousands of pounds back into the Treasury! We must tackle this madness and reduce pubs’ VAT to 5% to put pubs and supermarkets on a more VAT-even footing. Tax Equality Day gives us a glimpse of the enterprise this could unleash. Yes, Treasury officials will be squeamish. Yes, it is a brave step – but if ‘even’ the French have done this (sorry Jacques), surely Britain can seize common sense to save our great British pub?” The Jacques Borel VAT Club has produced a template letter to encourage operators to lobby their local MP over a reduction in VAT in the sector. The letter, which is available on the Jacques Borel website, has been produced as a result of a number of requests from operators for guidance of how to frame their own local lobbying. Borel said: “It is clear that operators want to undertake their own local lobbying so the letter is aimed at guiding them on the issues that should be drawn to the attention of their local MP.”

Industry News:

Kevin Charity to present on “building the day-parts” at Propel 3 July Multi Club Conference: Kevin Charity, whose company, Bulldog Hotel Group, is focused on bringing the traditional coaching inn into the 21st century, will present at the Propel Multi Club conference on Thursday 3 July. Charity talks about re-inventing the coaching inn as a focal point of the community, integrating a coffee and patisserie offer to build morning and afternoon day-parts, which can add five-figure sums to weekly takings, training, and investing to modernise and maximise the coaching inn space in the 21st century. The Propel Multi Club Conference will be followed by the Propel summer party in the evening and is now open for bookings – operators can claim two free places each. A full-day conference will be followed by the summer party, to include go-karting, a BBQ, the top live covers band the All Stars (which includes Simply Red’s guitarist and Rod Stewart’s bass player) and karaoke. To secure places or to get more information, email Jo Charity on
Pubs are Great website to be launched: A new website, Pubs are Great, is to be launched by the BBPA, Visit Britain and Inapub. A spokesman said: “Visiting a pub is the third most popular activity for overseas visitors, with four out of ten heading to a pub at some point during their stay. With this in mind, we have designed our website to help visitors find a pub close to the area or attraction that they are visiting. This new service covers a whole range of visitor attractions under the headlines: Heritage, Culture, Countryside, Sport and Music and will help visitors pin point the greatest pub nearby.”
Labour Party revives minimum pricing for alcohol: The Labour Party has revived the idea of minimum alcohol pricing, including the proposal in a document drawn up by shadow health secretary Andy Burnham. The Labour Party is also considering a ban on alcohol sponsorship at sporting events and banning adverts for crisps and other “unhealthy” foods during prime-time television slots. The document states: “The positioning of alcohol retail space in supermarket should be regulated, for example, being limited to a single defined area physically distant from the doors.”
Business Insider readers name Chick-fil-A the top US chain restaurant: Readers of influential US magazine Business Insider have voted Chick-fil-A the best chain restaurant in the US. The brand earned particularly high marks for service and cleanliness. The Top Ten are: 1: Chick-fil-A (20%); 2: Chipotle Mexican Grill (19%); 3: McDonald’s (14%); 4: Wendy’s (9%); 5: Panera Bread (8%); 6: Starbucks (4%); 7: Burger King (4%); 8: Taco Bell (4%); 9: Subway (3%); 10: Whataburger (3%).
James Horler – Late Night Levy move in Nottingham is a retrograde step: Sector entrepreneur James Horler has voiced his opposition to proposals for a Late Night Levy in Nottingham. Writing in a local newspaper, Horler, who operates a Red Hot World Buffet and Rocket site in the city, stated: “Proposals such as the Late Night Levy not only have almost universal opposition from local businesses but also paint a very dour and outdated picture of Nottingham to the outside business world. The levy will create unnecessary barriers for anyone operating in the Nottingham leisure industry. When we should be positioning the city as a place that welcomes new businesses and exciting brands with open arms, you have to ask how this makes us look to leisure operators around the UK looking to expand?”
New app provides unlimited coffee for a flat fee: A new app has been launched that allows New Yorkers to drink an unlimited amount of coffee at independent coffee shops each month for a flat $45 fee. Cups, the creation of four Israeli developers, allows members to have unlimited drip, pour-over, and filtered coffees at a growing list of independent coffee shops across Manhattan and Brooklyn. For those who prefer a morning latte or an espresso, membership costs $85 per month. The price of membership equals 22 cups per month, or one coffee drink per workday. App subscribers order their drink through Cup’s interface, where they choose a location and drink. Users are sent a code, which coffee shops keep a record of in order to recover the drink’s cash equivalent at the end of the month, which Cups pays at a discounted rate. Participating coffee shops do not have to pay any fee to be listed on the app. There are 40 coffee houses currently participating Cup’s, including mini-chains The Bean and Pushcart Coffee.

Company News:

Vanessa Hall to take over as chief executive at YO! Sushi: Vanessa Hall is to take over from Robin Rowland as chief executive of YO! Sushi as it prepares for a £120m sale. Hall joined in May last year as chief operating officer after leaving Mitchells & Butlers where she had most recently been brand operations director overseeing the company’s Premium Country Dining Group, Browns and Village Pub and Kitchen brands. Rowland, who has led YO! Sushi for 14 years, is becoming executive chairman and will work alongside Hall – he is tipped to leave the company within a year of the company being sold. Rowland told The Times: “YO! Sushi is firing on all cylinders with expansion opportunities on many fronts. Now is the perfect time for Vanessa to step up to leading the business on a day-to-day basis.” Private equity firm Quilvest owns YO! Sushi having bought it for £51m in 2008. At the moment, the company operates 67 UK restaurants and ten overseas. It plans five new London openings this summer – in Baker Street, High Street Kensington, Richmond, Kingston and Heathrow T2. The company saw flat Ebitda of £8 million, down £800,000, on turnover up 9% to £62,628,343 in the most recently reported year, 2012.
Greene King provides detail on Metropolitan estate: Greene King has updated City analysts on the progress of its Metropolitan estate of pubs, which includes its Realpubs and Capital Pub Company acquisitions. The group is now comprised of 68 London area pubs with a ‘premium and independent feel’, with average weekly turnover per site of £22,100 and a 71:29 wet and dry split. The segment has produced an average Return of Investment (RIO) of 41% since 2011 with an EBITDA margin of 32.2% and an average trading profit per site per year of £320,000. Metropolitan Pub Company sits within Greene King’s Local Pubs estate of 482 drinks-led pubs and is led by Richard Lewis. Other segments are: Meet and Eat (158 pubs), Flame Grill (93 pubs), High Street (86 pubs), Premium (54 pubs) and Champion Locals (33 pubs). Analysts were told Flame Grill sites produce average weekly turnover of £14,500, with a 66:34 wet to dry split. EBITDA margin is 31.8% and trading profit per site is £193,000. A total of 20 Flame Grill developments in the past year are delivering a 48% ROI.
Patisserie Holdings shares to float in the 170p to 200p range: Patisserie Holdings will be valued at around £200m when it floats on AIM, with share dealing due to start on Monday 19 May. Shares will be offered at 170p and 200p. The company will raise £33m from its AIM launch, which will be used to pay off outstanding debts of £21.9m and loans from shareholders of £10.8m.
Starbucks franchisee opens first site on Isle of Wight, company plans franchising in France: A Starbucks franchisee has opened its eighth franchised site and the first Starbucks on the Isle of Wight. The new site has been opened in a former Jessops in Newport by Southampton-based franchisee 23.5 Degrees. Anil Patil, managing director at 23.5 Degrees, said: “We are thrilled to open the doors of the first Starbucks on the Isle of Wight. This is the eighth store we have opened as part of our franchise deal with Starbucks and by the end of the year we plan to have opened 12 new stores across the south of the UK, creating between 120 and 150 jobs.” Meanwhile, Starbucks is to start franchising in France after the success of the strategy in UK, which began last year. According to Starbucks’ French website, ideal franchisees are restaurant or hospitality professionals with proven leadership skills and 300,000 euros to invest. “You must be ready to become an ambassador of the brand in your region,” the site states.
Greene King obtains licence for first Scottish new-build Hungry Horse: Greene King has secured a provisional premises licence for its first new-build Hungry Horse in Scotland from the Inverclyde Licensing Board. The site, which forms part of the redevelopment of the Victoria Dock area in Greenock, is scheduled to open in a year’s time. This grant follows on from the recent opening on the Titan Hungry Horse in Clydebank, a redevelopment of what was previously The Boulevard Hotel, following an extensive facelift in order to become the first Scottish site in Greene King’s Hungry Horse chain.
Jamie Rollo – the Enterprise Inns share value could double: Morgan Stanley leisure analyst Jamie Rollo has argued Enterprise Inns’ shares could double in value if they move in line with property stocks. He said: “Listed UK property stocks traded at an average 15% discount to book until 2007 when they got REIT status; the discount closed to 5% and has been at around parity for a year. Enterprise Inns has traded at an average 25% premium to book value since listing, with UK pubs at an average 9% premium. While UK pubs currently trade circa 30% ahead of book value, Enterprise Inns is trading at circa 50% discount. Enterprise revalues its assets annually, like property companies, and if improving pub trends continue, we think the gap to Net Asset Value could close, suggesting the share price could double.”
MeatLiquor founders – we’ve hand-picked our investors: Scott Collins and Yianni Papoustis, the founders of MeatLiquor, the better burger plus operator with a turnover of £12m and four openings planned, has told Management Today that its investors have been chosen for their particular areas of expertise. “We pretty much hand-picked the small number of investors we have – there’s a lawyer, a property guy, our cocktail guru, and a couple of friends who’ve helped out,” said Scott Collins. “Nobody got to put in money and then just sit back,” added Papoutsis. ‘There’s a reason everyone is involved.’ Of crowd-funding, Collins said:  “You have to deal with 500 random shareholders who all think they can own a part of your business. I’m a bit sceptical about that.” MeatLiquor has openings in Leeds Trinity Centre and Bristol planned. 
McDonald’s closes town centre Ilkeston site as it plans out-of-town site next to Tesco: McDonald’s will close its site in Ilkeston town centre this Saturday (10 May) after 28 years of trading. A new, purpose-built McDonald’s will open opposite Tesco later this month. The closure of the town centre McDonald’s also coincides with the opening of 30 minute parking bays.
Jamie Rollo – we consider JD Wetherspoon a long-term winner: Morgan Stanley leisure analyst Jamie Rollo has described JD Wetherspoon as long-term winner head of trading update. He said: “For the full year we forecast £116m of EBIT (+4%), profit before tax of £79m (+3%) and Earnings Per Share of 48p (+2%), in line with consensus on £116m, £79m and 47p respectively. We recently hosted an interesting roundtable with executive chairman Tim Martin. He sounded upbeat about the business, and was confident in its strategy of driving further like-for-like sales and profit growth. We consider Wetherspoon to be a long-term winner in the industry, and think this is fairly reflected in its 16.4x cal 2014 P/E, at the top end of the peer group.”
Belfast nightclub goes on the market for £3m: The Kremlin nightclub in Belfast – Northern Ireland’s best-known gay venue – has gone on the market for £3m. Commercial property agent CBRE has been appointed to market the bar and restaurant complex close to the city’s Cathedral Quarter. The site also includes Union Street Bar, where the restaurant is located, and The Shoe Factory Club, where Union Street’s club nights are held. The sale is expected to generate major interest as it is located close to what will be the main University of Ulster campus, and the future home of over 10,000 undergraduates. The three licensed venues – which are also close to new gay venue Maverick, in the bar formerly known as The Front Page – are self-contained. The complex is let on a single lease for ten years, due to expire in April 2019, at a current rate of £355,000 per year.
Thai brand to launch street food spin-off: Thai restaurant Chaophraya has revealed it is to launch a spin off venture on The Avenue in Spinningfields in Manchester. Thaikhun will open on 27 May at a former retail unit on The Avenue, offering a menu inspired by the street food stalls of Bangkok. The new site will have a ‘rustic’ feel and will create 50 new jobs. Co-owner Kim Kaewkraikhot said: “My passion is to bring authentic Thai dishes from the streets of Bangkok to the streets of the UK. Pronounced ‘tycoon’ the name celebrates the street food sellers who are real foodie entrepreneurs. I am really looking forward to sharing more signature dishes transported all the way from my cooking roots in Thailand.”
Jamie Oliver plans Trattoria site in Chelmsford: Chef Jamie Oliver is hoping to open a branch of his Jamie’s Trattoria restaurants in Chelmsford. Chelmsford City Council received a change of use application yesterday for the former Barclays branch in High Street. No pizza is served at the restaurant chain, with the offerings “all authentically Italian, but unmistakably ‘Jamie’ too”, with a focus on pasta and sharing dishes. If permitted, the restaurant will create up to 40 jobs.
Jamie Rollo – we expect Mitchells & Butlers to report accelerated like-for-likes: Morgan Stanley leisure analyst Jamie Rollo has stated he expects Mitchells & Butler like-for-like sales growth to have increased from 4.4% when it unveils First Half results on 23 May. The sales growth will have been boosted “by easy comps from poor weather last year.” He added: “The company opened 16 new sites in 2013, and had opened ten new sites at the Q1 update. At the H1 2013 results, it announced plans to only invest in its new categories of Upmarket Social (All Bar One, Castle, Nicholson’s and Alex), Special (Miller & Carter, Vintage Inns, Village Pub & Kitchen, Premium Country Dining and Browns), and Family (Harvester and Toby Carvery) segments, and it said at the time that it was more focused on returns rather than targeting specific numbers of openings. We expect this to ramp back up and forecast 30 additions for the full year, in-line with company guidance of 30-35, rising to circa 50 sites per annum from 2015. The company’s triennial pension review has been ongoing since 31 March 2013. The deadline is in June 2014, and we are hopeful of a resolution in time for these results, or at least an update on discussions. We expect the deficit to increase significantly (circa £600m from £400m), and think it is unlikely the company will resume a dividend until 2015 as a result.”
YO! Sushi founder close to securing first YO! Home deal: YO! Sushi founder Simon Woodroffe is close to securing the first site for his YO! Home concept. His YO! Home venture aims to use counterweights to transform small flats into more flexible living space – a false floor can be raised to reveal a sitting room and false wall hides storage space. Woodroffe is close to signing a deal with Manchester-based property developer Urban Splash to build the first YO! Home apartment block.
Second novel emerges from the Peach Pub Company stable: Jo Eames, co-owner of The Peach Pub Company is to publish her second novel, Not Only The Good Boys, a story set in the year leading up to D-Day, which will be available to purchase from book shops and Peach’s award-winning pubs from the middle of May onwards. After selling thousands of copies of her first novel, the Oxfordshire-based author is once again taking some imaginative routes to put her novel into readers’ hands, generating interest on social media and getting people talking about the book at a time when all eyes will be on the 70th anniversary of D-Day and the Battle of Normandy. First off, Jo will be offering book clubs from across Oxfordshire a sneak preview of the book before inviting them to The Fishes in North Hinksey on the evening of Thursday 15 May for a literary evening with the author over wine and nibbles. She’ll be asking these readers to post comments on Facebook and Tweet about the book there and then, to help spread the word. She is also planning a 1940s style garden party launch at The Fishes in North Hinksey, Oxford. On Sunday 8 June, the pub’s riverside gardens will be the scene for live swing music, street party food and readings from the book by actors in 1940s dress, with rewards for guests who come in the best 1940s outfits. 
Steve Hill steps down as Las Iguanas chief executive: Steve Hill has stepped down as chief executive of Latin American restaurant group Las Iguanas with immediate effect. The company has begun the process of finding a successor and, during the intervening period, founder director Eren Ali will resume CEO responsibilities. Las Iguanas, which has achieved its target EBITDA in the year to March, plans to open eight further sites by March 2015. Research has shown that there is potential over the longer term to grow the brand to at least 120 sites from the current 34 in the UK, and that further significant opportunities exist internationally. In order to maximise shareholder value and allow time to bed in the new restaurants, any change in the company’s ownership is now unlikely to take place until next year. As a consequence, Hill has decided to leave the business to develop a portfolio investment career. Eren Ali said: “Steve has done a great job and we wish him well with his future projects. Having delivered 7% like-for-like growth in the year to March, Las Iguanas is in the best shape it has ever been and I and the rest of the management team are excited by the opportunities that lie ahead for the brand.”
Harviestoun Brewery hires director of sales and operations: Harviestoun Brewery has hired Chris Seabrook as its new director of sales and operations, starting on 19 May. The announcement follows earlier news that Toby Knowles has been promoted to managing director following the departure of Chris Miller. Chris Seabrook brings a raft of experience to his new role with a CV that includes periods at Southcorp Wines, Lanson Champagnes and Carlsberg.
Benito’s Hat hires new chief executive: Benito’s Hat restaurant group has appointed a new chief executive. Richard Baker joins Benito’s Hat from Garfunkel’s as the brand looks to further strengthen its estate this year following an additional investment of £1.3 million from Calculus Capital, the UK-based private equity investor. Prior to working as senior operations manager for Garfunkel’s, Richard held the same position at TRG Concessions where he was for four years. The appointment follows the exit of Graham Ford who is moving on in May. Founder Ben Fordham said: “Richard comes with a wealth of experience gleaned from a portfolio of restaurants that includes airport concessions. Over the past 12 months, we have successfully opened two new sites and improved like-for-like EBITDA by 24% year-to-date. Following another cash injection from our investors, the new appointment coincides with what promises to be an exciting year for Benito’s Hat, starting with a new opening at London Bridge this autumn.”
Private equity fund backs leisure deals: Private equity and real estate debt group EquityBridge Asset Management (EBAM) has backed a brace of transactions for hospitality investor and developer Union Hanover. In the first transaction EBAM arranged a £15.5m consolidated funding package to Union Hanover for its Black Lion site in Aldgate. This has enabled the developer to repay senior lender Topland, who provided it with acquisition finance to acquire Black Lion House, a 75,000 sq ft office block at the edge of the City which Union Hanover is set to convert into a 220-bedroom extended stay hotel. The financing also enabled Union Hanover to buy out the remaining 47.5% of fellow investors in the project, developer Southern Grove and project and construction management consultancy Rise. Rise will remain project manager on the scheme. Warren Malschinger managing director and founder of EquityBridge Asset Management said: “The Topland facility’s maturity date was the end of July, this combined with liquidity needed for professional fees for the next few months made this an ideal time to restructure the capital stack. This new consolidated loan has lowered the cost of funding and provided more certainty by acquiring 100% of the ownership and capitalising the venture.”
Family brewer survey finds an increase in professional classes thinking about running their own pub: A survey by Dorset-based family brewery Hall & Woodhouse has revealed a surge in interest from professionals and academics looking for a career change and looking to run their own pub. The research revealed that teachers, electrical and mechanical engineers, economists and an academic from the social studies sector left their educational backgrounds and changed direction to become one of Hall & Woodhouse’s tenants. Other interesting occupations of licensees prior to their Hall & Woodhouse careers began included a psychiatric nurse, a military mechanic and a Zoology graduate. Matt Kearsey, business partnerships director at Hall & Woodhouse, said: “The results of the Business Partnerships Survey showed the high calibre of our business partners. The skills gained from higher education are transferable to running their own ‘pub business’ and we hope that more and more people with academic backgrounds will turn to Hall & Woodhouse to embark on new careers in the future.”
Plans submitted to create 200-seat Wetherspoon mega-beer garden on site of former nightclub: Part of a former nightclub in Mansfield could soon be bulldozed to make way for a 200-seat beer garden serving two JD Wetherspoon pubs. Plans have been submitted to Mansfield District Council’s planning committee to flatten the rear part of the old QI building on Leeming Street, formerly The Palais, and transform it into a garden serving The Widow Frost next door and The Stag and Pheasant pub, on Clumber Street. Both are owned by JD Wetherspoon and are adjoined by the old nightclub building. If given the green light, the proposed scheme could see space for more than 200 seats, with a covered, heated dining area. The front facade of the building would remain.
YO! Sushi launches pro-Japan World Cup marketing campaign with a potential £1m prize: Restaurant chain YO! Sushi has launched its #TEAMTWO marketing campaign, asking the nation to support Japan as its second team this summer with a chance to win £1 million if the Samurai Blue go all the way. The campaign will be supported by PR as well as a dedicated hub page on the YO! Sushi website. Social media will be used to further amplify the campaign. Everyone signing up to #TEAMTWO will join the company’s ‘Love Club’ and will automatically get entered in to a draw to win hundreds of prizes throughout the tournament including a holiday to Japan whether the Japanese team win or not. Robin Rowland, YO! Sushi chief executive, said: “This summer we are asking people to support Japan as their TEAMTWO and giving them the chance to win £1 million – the biggest prize in the history of YO! Sushi. Everyone can take part and even if the Samurai Blue don’t go all the way there are still loads of fantastic prizes along the way.”
Enterprise Inns unveils winner of South Yorkshire pop idol: Sheffield support worker Jessica Armstrong has won Enterprise Inns’ South Yorkshire Pub Idol competition. Launched by Enterprise Inns in February, the Pub Idol contest featured more than 1,200 people competing in heats in 20 pubs across the region before converging on The Viper Rooms, Carver Street, in Sheffield city centre, for the final. Armstrong won £1,000 prize money and the chance to visit a recording studio for a day to create her own CD. Duncan Marsden, Enterprise divisional director, said: “Pubs have always been the cornerstone of community life in Yorkshire, but with so many communities across the UK facing pub closures, we launched Pub Idol to remind local people just how much fun your local can be.”
Greene King sets out strategy for 2020: Greene King has set out its strategy for 2020 in an analyst’s day held at The Square Pig pub in High Holborn, with a strong emphasis on the need to develop or acquire all-day trading concepts. The company’s Project 2020 five-year plan, set out by chief executive Rooney Anand and strategy director Mark Blythman, has identified the key consumer trends likely to have an impact on the sector – and the main growth areas by location, time and demographic. The company reports that the UK population will grow by more than five million between now and 2015, an increase of 9%. Growth will be concentrated among those aged between 25 and 44 and those aged over 55. The eating out market is estimated to grow from £21.8bn of value this year to £26.4bn while the drinking out market is forecast to grow from £10.7bn to £12.2bn. Analysts were told that growth will differ by sub-sector. At £7.9bn, the coffee, sandwich, cafe segment is smaller than the full service and casual dining market (worth £20.7bn in 2013) but is expected to show best growth, a Compound Annual Growth Rate of 5.6% between 2013 and 2018. Other markets expected to show attractive growth are Fast Food (4.4%) and Retail Grab & Go (4.9%). The company said it will be ready to implement changes in time for the 2016 financial year to ensure that the business is better aligned to long term trends. Its managed division will add a minimum of 30 new sites per annum and broaden usage occasions and day-time trading. There will also be a focus on “raising the hospitality bar” and generally “increasing the exposure to eating out”. The company also plans to acquire assets and brands that help to improve its alignment to trends. This includes an improved exposure to day-time trading and a reduction in exposure to alcohol and evenings/weekends, which will mean buying “all day” concepts or developing them. Areas of acquisitions being looked at include casual dining, fast casual and coffee/pub cafe. The company produced a graph that showed coffee shops claim 73% of total spend between 8am and 10am compares to pubs’ share at 21% and restaurants share at 6%. The 10am to 12noon slot sees coffee shops claim 35% of spend – the same as pubs and bars, with restaurants on 31% of spend. Meanwhile, Greene King will dispose of residual assets and use its analysis of consumer trends to simplify the estate and optimise growth and returns. Its drive brand propositions will be reviewed and improved. Greene King told analysts that it had secured half of its 2015 acquisitions already and it had a pipeline of 120 sites. It is also looking at transport hubs where Propel has previously reported that the company has undertaken an assessment of the suitability of its Realpubs premium format. It has, however, rejected at the idea of opening in Eire and service stations. The company said it foresaw a stable tenanted division of 750 sites. Within the existing estate, Greene King told analysts there is potential for both smaller and larger format Hungry Horse sites. It set out the current rate of return for its key Hungry Horse and Farmhouse Inn sites across leasehold and freehold properties. Leasehold Hungry Horse pubs average £30,000 to £35,000 average weekly turnover, producing EBITDA of £260,000 to £280,000 on a rent of £140,000 to £150,000 per annum after investment of £800,000 to £1m – EBITDA ROI is 25%. The average new-build freehold Hungry Horse produces the same average weekly takings after a £2.6m to £2.8m investment, producing EBITDA of £435,000 to £445,000, an average EBITDA ROI of 16%. A new-build freehold Farmhouse Inn (the new name for the former Cloverleaf estate) produces average weekly turnover of £40,000 to £45,000 after an investment of £2.7m to £2.9m, and EBITDA of £505,000 to £515,000, an EBITDA ROI of 18%.

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