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Morning Briefing for pub, restaurant and food wervice operators

Thu 4th Jun 2015 - Beds & Bars £7m investment, Busaba results
Beds & Bars set for £7m investment to add 250 beds to London estate: Beds & Bars, the pan-European hostel provider led by Keith Knowles, has won planning consent to add just over 250 beds to its London estate. The company has also negotiated a new £7m facility with HSBC to fund the work. Planning consents now cover the addition of 200 beds to its Village site in Southwark, 50 beds to its Hammersmith site and eight boutique hotel rooms at its Flying Horse venue in the City of London. Knowles told Propel: “London is absolutely rocking at the moment.” The company is now planning a schedule of investment to minimise the disruption. “It’s a bit of a jigsaw puzzle,” said Knowles. The new facility from HSBC comes after the bank told Beds & Bars it believed the company has one of the “best people-cultures” it had ever come across. “That’s the legacy of Franca in our business,” said Knowles, who added: “The developments will add substantially to our Ebitda performance. However, the planning process has been painful. I would call on the Government to look at how local authorities use section 106. At the Village, we have been levied a charge of £160,000 by Southwark Council to create jobs in the area, which seems a contradiction in terms because when we asked how the money will be spent, we didn’t get a straight answer. Given my role in Perceptions (the industry body promoting job creation in the sector) I find this very frustrating. Let’s face it, this is a tax on growth with no clear guidelines on the charges.” At the start of this year, Beds & Bars reported a ‘truly amazing set of numbers’ as it paid down more than £15m of bank debt. Turnover rose 20% to £33,460,000 (2013: £27,939,000) in the year to 29 March 2014 thanks to a contribution from the company’s second opening in Paris (opened in July 2013), with like-for-likes up 5%. The company’s improved trading performance came as it took steps to slash debt through a small number of freehold sales and a key freehold sale-and-leaseback. The company produced £3,731,000 of Ebitda in the year to the end of March 2014, up from £2,269,000 the year before. Profit before tax was £1,458,000, a turnaround from a loss of £752,000 the year before.

Busaba Eathai reports turnover nears £25m: Thai chain Busaba Eathai, led by Jason Myers and chaired by Stephen Gee, has reported turnover rose 5% to £24,890,000 in the year to 31 May 2014 despite no new openings. Ebitda reduced by £136,000 to £1,849,000 due to the “increased costs incurred to prepare for (a) planned opening programme”. Further costs were incurred as a result of the sale of the site occupied by the Naamyaa restaurant and the end of the lease at Bicester – there was loss of £1,347,472 on the disposal of fixed assets and an impairment charge of £448,987. Restaurant Ebitda was £3,918,0000, a rise of 2% on the year before but the company saw a loss of £2,775,835 compared to a profit of £321,926 the year before. The company has opened sites in Shoreditch and at the 02 Centre and one under franchise since the year-end. The company stated: “Trading has been encouraging at all three. The directors objective is to establish the company as the country’s premier Thai restaurant group. To this end, further finance of £10m has been agreed with the company’s shareholders and bankers. A new site in Manchester has been secured and three additional sites in other major UK cities are at an advanced stage of negotiation.” The £10m facility with Barclays is repaid per quarter starting October 2015 with £188,000 due each quarter a final payment date of January 2020. The company has a contingent liability is respect of a undeveloped commercial property assigned to a third party. Busaba Eathai remains liable in the even of the assignee’s default – the current annual rent obligation is £220,000. Founder Alan Yau resigned from the company in January 2014.

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