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Wed 22nd Jul 2015 - Propel Wednesday News Briefing

Story of the Day:

UK’s biggest brewpub operator Brewhouse & Kitchen aiming to double estate by 2019: Brewhouse & Kitchen, the EIS-backed micro-brewer and pub operator, is aiming to double its number of sites to 18 by 2019. The company, led by Simon Bunn and Kris Gumbrell, currently has nine sites – six of which are trading with three more in Gloucester Quays, Southbourne and Bournemouth due to open this year. Gumbrell told Propel it is aiming to double that figure in the next four years with the £15m raised through EIS leaving headroom for “two or three further sites” and beyond that, further expansion can be funded through cash flow. He added: “It’ll be a blend of leaseholds and freeholds, predominantly freehold is the plan, which gives us real strength with the bank. They [the sites] don’t have to be huge, but big enough to take the brewery without compromising on cover space – we need about 120 covers.” The Gloucester Quays site is set to open next month with the Southbourne and Bournemouth venues following later this year. “I believe I’m right in saying that we’re the biggest brewpub operator by number of sites in the UK,” said Gumbrell. “When we open Gloucester we’ll have just over 100 individual and live beer brands in our business, every one an individual recipe, so we are probably Britain’s most prolific brewer in terms of number of brands.” Gumbrell added the company might consider diversifying into related areas such as craft distilling, as some craft beer operators have done, in the future “but not yet”. He added: “With distilling, you’ve got be careful in terms of health and safety, and the licensing is a nightmare. To be honest, we’re good at what we do, we love doing it and we get a lot of really good feedback from customers as well as our peers. We also have a responsibility to our shareholders. We’ve raised £15m, and I’ve got a sizeable stake in this business myself. We made a promise in a business plan and we’ve got to deliver on that.”

Industry News:

Technomic and Propel partner for UK and US foodservice trends and direction conference: Insights and research firm Technomic is partnering Propel for a full-day conference looking at UK and US foodservice trends and perspectives. The event is on Friday, 18 September at One Moorgate Place in London and attendees will also get a free copy of Technomic’s Top 500 US Chain Restaurant Report and the UK’s leading 100 foodservice brands worth a combined £800. Technomic vice-president Dave Henkes will give an industry update on UK foodservice and compare it with the US as well as providing forecasts and beverage trends in both markets. Fellow vice-president Darren Tristano will examine best practice in menu, concept and service among growth concepts as well as looking at consumer demands. Technomic’s Patrick Noone will provide insights on current UK trending menu flavours and preparations and consumer priorities and attitudes. Paul Damico, group president of Focus Brands – which operates several fast-food concepts in the US including Schlotzsky’s Bakery & Café and Moe’s Southwest Grill – will share best practices around creating a unique positioning, culture and growth strategy. Propel managing director Paul Charity will also lead a discussion of senior executives about current consumer trends, menu and beverage trends. Those taking part are: Mark Lilley, founder of Abokado, Chris Gerard, founder of Innventure, James Nye, managing director of Anglian Country Inns and Ben Levick, director of operations, TCG Group. Tickets are priced at the two-week early-bird rate of £295 plus VAT for operators and £495 plus VAT for suppliers and are available by emailing

25 craft brewery transactions forecast for the US in the coming year: The Seattle Post-Intelligencer newspaper has reported the craft brewery market is set for a frenzy of mergers and acquisitions activity with private equity sources predicting there will be 25 craft brewery transactions in the next 12-15 months. A report stated: “There is tremendous money with private equity groups, family offices and strategic buyers that is eager to get in the craft beer space. One example is a $130m fund that has been raised strictly for craft brewery investments. Selling multiples are now very high for craft breweries and this is getting the attention of brewery owners who are seeking an exit or capital infusion. It is estimated by private equity groups that this window will not happen again for another eight to ten years. Recent craft brewery transactions (partial or whole) include: Boulevard, 10 Barrel, Blue Point, Elysian, Southern Tier, Bronx Brewery, Squatters, Oskar Blues, Full Sail, Perrin, Wasatch, Founders, Uinta, Sweetwater, and Alpine.”

New All-Party Parliamentary Group on visitor economy set up: The British Hospitality Association (BHA) has announced the establishment of a new All-Party Parliamentary Group (APPG) on the visitor economy. The APPG’s purpose is to enhance local economies through promoting measures and incentives, including a reduction of VAT on tourism, which would increase visitor numbers and investment in all parts of Britain and Northern Ireland. The BHA was appointed as secretariat to the APPG and will work with MPs to devise the group’s programme during the summer. The BHA will be working closely with the APPG to host a Hospitality and Tourism Lobby Day on 16 September 2015 where BHA members and other business leaders will visit Parliament to make their voices heard on key issues affecting the industry. Margaret Ritchie MP, co-chairman, said: “The tourism industry is central to many sectors of the economy in Britain and Northern Ireland – in fact in some it can be the catalyst for economic growth and job creation. It provides enormous potential for growth and productivity. The APPG will focus on how we can enhance the UK’s local economy by discussing measures and incentives such as a reduction in tourism VAT. We have a real opportunity to boost tourism, and with the APPG’s cross party support, I have renewed confidence that our voice can be heard across Parliament, in the Treasury and in wider government circles.”

Dubai operator forecasts rapid food and beverage growth: Dubai’s food and beverage sector is set to grow 36% by the end of 2015, according to a regional hospitality expert. Quoting a report by the British firm KPMG, Youssef Jammal, head of hospitality and retail at The H Holding Enterprise, said another 1,600 food and beverage outlets would be added in the emirate by 2019. “Food sales could grow to Dh38.5bn in 2015 from Dh28.3bn in 2011, an increase of 36%,” he added. “Our hospitality outlets across the UAE have recorded unprecedented sales, exceeding our expectations for the first half of 2015.” The company, which has operations in various investment sectors, currently runs several food and beverage and entertainment outlets, including Monte Carlo Stars, Cash, L Club, LUA. “Expansions in this vital and vibrant sector have been very rewarding,” said Jammal. “We have allocated higher budgets for expanding into new projects in Dubai’s food and beverage sector.”

Dunkin’ Donuts to trial broadened tea offer: Dunkin’ Donuts is to trial a broadened tea offer in Chicago. Chris Fuqua, the vice-president of marketing, said the tea market is “evolving relatively quickly” and it made sense to attract “higher-end” customers. He added: “Pending test results in Chicago, we think this is something that we’ll want to go broader with.” The five new infusions getting added to the Dunkin’ Donuts menu are: black tea, chamomile, mint, hibiscus and its own concoction, a blend with the name “harmony leaf”.

Nando’s romps home in Wellingborough popularity contest: Nando’s is the overwhelming first choice of the inhabitants of Wellingborough, Northamptonshire, who were asked to vote for the offer they would like to see replace a McDonald’s in Market Street that is closing when a bigger branch opens in London Road in October. In an online poll by Wellingborough Chamber of Commerce, a total of 56% voted for Nando’s to open in the prime town centre position. A further 27% want another burger restaurant to replace McDonald’s with the remaining 17% saying there were in a favour of an Italian restaurant. Chamber president David Cross said: “The people of Wellingborough have spoken – they want a Nando’s in the town centre. The position in Market Street is such a visible location in the town centre, so as a chamber of commerce we are keen to ensure the premises does not remain empty for long, if at all.”

Prince Charles visits Pub is the Hub site in Cornwall: Prince Charles has visited the Falmouth Arms pub in Ladock, Cornwall, to see the success of the pub’s library service, which was helped by his Pub is the Hub initiative – an organisation that supports country pubs to provide community services and of which he is patron. Last year David and Emmeline Smith converted the pub’s under used pool room into a library after the mobile library service that served the village was axed. Since then they have seen new customers as well as other community organisations including the local WI and motor clubs using the room. The Duke of Cornwall also met with other landlords and licensees who had set up shops, post offices and libraries in pubs within their communities up and down Cornwall through the Pub is the Hub initiative. Pub is the Hub launched in 2001 and has been most successful in Cornwall with 20 pubs in the last two years taking up the support to offer community facilities. Thirteen of the pubs offer a library service.

Shake Shack shares fall after news of share sale: Shares of Shake Shack fell 4% in after-hours trading on Monday after news that a few of the burger chain’s shareholders are offering four million shares of Class A common stock for sale. The company said it was not selling shares nor it will receive any proceeds from the sale by the selling shareholders. Sellers include company executives such as chief executive Randy Garutti and chief financial officer Jeff Uttz as well as board of directors chairman Danny Meyer. Shake Shack fell as low as $51.10 in extended trading after the disclosure. Still, the stock remains more than twice its initial public offering price of $21. Shake Shack peaked in May, well above $90, but shares have been sliding backwards since.

Company News:

Palmers Brewery to invest record £5m on single project: Palmers Brewery, the West Dorset-based brewer, has been granted planning permission for the £5m regeneration of the Three Cups Site in Lyme Regis. After 25 years of issues concerning land stability and planning negotiations, councillors have voted unanimously in favour of Palmers’ plans to preserve the historic building fronting on to Broad Street and create a new restaurant and 12 letting rooms on the land at the back of the building. John Palmer, chairman of Palmers Brewery, said: “This decision is good news for The Three Cups, Lyme Regis and the local economy as a whole. This is a momentous occasion for Palmers – at £5m the development will be the largest project Palmers has undertaken. The Three Cups regeneration follows on from a series of successful high profile site refurbishments completed over the last two years. These projects are in line with our ongoing strategy to invest in great licensees and well-positioned pubs along the Jurassic Coast.”

Wagamama opens flagship Gatwick site: Wagamama opened its flagship 150-seat site at Gatwick’s North Terminal at the weekend, creating 108 jobs. It has a morning menu unique to Gatwick boasting British twists on Asian classics such as yaki soba noodles served with bacon and egg. The company plans to open another Wagamama in the South Terminal later in 2015. Wagamama global brand director Simon Cope said: “We are thrilled to be opening this flagship restaurant at Gatwick Airport. Airports are a natural location for us, as they address our core target customer who wants delicious, freshly cooked food, served quickly for convenience.” Charlotte Christiansen, business development manager for catering at London Gatwick, said: “A third of our passengers told us they would like to see a Wagamama at Gatwick so we have acted on this.”

Starbucks unveils “first-of-its kind” digital news experience with New York Times: Starbucks has unveiled a “first-of-its-kind” digital news experience for the Starbucks mobile app, the result of an expanded relationship with The New York Times. As part of the agreement, The New York Times top news of the day as well as a selection of other articles addressing key social, political and economic issues will be available for free via the Starbucks mobile app for the ten million My Starbucks Rewards loyalty members. These customers will also have the opportunity to earn “Stars” through paid digital and print subscriptions to The New York Times. Beginning in the first half of 2016, as part of this Starbucks digital news experience, the daily and weekend briefings from The New York Times will be delivered to My Starbucks Rewards loyalty members through the Starbucks mobile app as well as other relevant articles from The Times recommended by Starbucks. Additional articles recommended by Starbucks will come from other media sources over time. Howard Schultz, chief executive of Starbucks, said: “Our relationship with The New York Times is the perfect example of bringing this vision to life. We have proudly sold millions of copies of the paper in Starbucks stores for more than a decade, and are excited to bring this experience to the next level by enabling Starbucks loyal customers to take the best of The New York Times with them wherever they go, whenever they want it.” The company added: “Providing its most loyal customers with the most relevant news of the day from one of the most trusted news authorities, The New York Times, is one more way that Starbucks enriches its customer relationships with benefits that are meaningful and unique.”

Administrators brought in at Atrium Bars: Administrators have been appointed to Atrium Bars’ two pubs in Nottinghamshire and Lincolnshire after a downturn in trading. A site in Newark has been sold, saving 15 jobs, while a pub in Grantham is being marketed for sale. Chris Stirland and Nathan Jones from FRP Advisory, a restructuring and advisory firm, were appointed joint administrators to Fairway Investments PPC, which traded as Atrium Bars. They have sold the business and assets of The Atrium at 69 Castle Gate in Newark, with the leasehold pub now operated by new tenants. The joint administrators continue to market for sale the Atrium, a freehold pub at 7 High Street in Grantham, which continues to trade as normal operated by a hospitality management business, appointed by the joint administrators. The Atrium in Grantham currently provides jobs for 25 members of staff.

JD Wetherspoon gets Liverpool new pub go-ahead: An historic building in Liverpool’s Formby area is set to become a JD Wetherspoon pub after planners gave the green light for its development. Planning consent has now been granted for a new JD Wetherspoon pub to be built on the site of The Formby Conservative Club with £150,000 being spent on creating a new home for the club on the first floor. The permission was granted last week following long delays after Sport England had objected to the scheme because of the loss of a bowling green on the site. But with the green having been out of use for more than a year and no funds available for its restoration and upkeep, the planning officer recommended full approval and the scheme was given the go-ahead. Work is expected to start soon on transforming the building in Three Tuns Lane into a JD Wetherspoon pub with a two-storey rear extension and covered canopy. The former bowling green is to be transformed into a family beer garden. The club will be renamed “The Formby Club”.

Fuller’s artisan pizza and cider brand The Stable opens first Hampshire site: The Stable, the artisan pizza and cider brand in which Fuller’s holds a 51% stake, has opened its first Hampshire site, located in Winchester’s city centre on The Square – it is the ninth location for the group. It has created 20 jobs and offers a range of over 60 ciders to the Hampshire city. The Stable was created by Richard and Nikki Cooper and Richard’s brother Andy Briggs. Nikki Cooper said: “The opening night was a great success. We easily achieved our covers target and it was great to welcome hundreds of locals and tourists through the door.”

Brasserie Blanc partners Matthew Clark to create its own sparkling rosé: Brasserie Blanc has teamed up with wine supplier Matthew Clark to create a bespoke sparkling rosé following the success of Blanc de Blancs, which was launched last year. Mousseux Rosé combines a range of French grapes to make a light and fruity wine. The rosé is made using a selection of French grapes including, Gamay Noir, Grenache and Cinsult. Naturally fermented and aged for three months, the end result is a pale pink rosé with fresh, fruity aromas and red berry notes. Mark Derry, chief executive of Brasserie Blanc, said: “Our bespoke blended Blanc de Blancs has been an enormous success, easily rivalling sales of Prosecco which is quite an achievement. We have a healthy demand for rosé wine in our brasseries so the logical step was to blend our own sparkling rosé. The expertise from Matthew Clark has resulted in a great tasting, light and fresh Mousseux Rosé –santé!” Available at Brasserie Blanc restaurants across the UK, Mousseux Rosé is priced at £27.50 per bottle or £5 per 125ml glass when served in the restaurant.

Freehold of Great Yarmouth hotel comes on the market for £860,000: The freehold of the historic Star Hotel, one of Great Yarmouth’s most striking buildings with a distinct black and white façade dating back to the 17th century, is on the market through agent Fleurets, on the instructions of the Mortgagee In Possession, for £860,000. Bob Whittle, of Fleurets, said: “The hotel is still fully operational and is a long-established traditional town centre business catering for corporate meetings, seminars and conferences as well as benefitting from local community trade. The hotel overlooks the harbour and River Yare and is within easy strolling distance of the town’s main retail centre. The property operated for many years under direct management as part of an East Anglia-based hotel chain but it was sold in 2010 to private operators.” Accommodation includes 40 en-suite bedrooms plus two restaurants, function and bar facilities.

Four family restaurants to feature in new Doncaster cinema scheme:
A new six-screen cinema to be built at Doncaster’s Civic and Cultural Quarter with four family restaurants. The council’s development partner, Muse Developments, has now agreed terms with Savoy Cinemas for the delivery of a 18,000 sq ft, 984-seat cinema, in addition to four family restaurants totalling 17,000 sq ft. Development is expected to start early next year and to be completed by the end of 2016. This comes as part of the £300m Civic and Cultural Quarter regeneration scheme. Doncaster Council and Muse Developments have worked closely to deliver the award-winning first phase of the scheme, which was completed in 2013.

Lincolnshire operator buys two Torquay sites: Lincolnshire businessman Chris Ball has bought two co-located. Torquay restaurants – Cotton Eyed Joe’s and Beast Burger in Torwood Street. The sale brings to a close the career of local restaurateur, Betch Muffazer, who has been active in the Bay’s restaurant trade for 35 years. Muffazer has decided to retire after operating five different restaurants over his career. Cotton Eyed Joe’s and Beast specialise in burgers, ribs and steaks. The premises are located in a prime trading area among Torquay’s best-known restaurants, bars and nightclubs and close to the harbourside and marina.

Starbucks to offer first single-origin coffee from Vietnam: Starbucks is offering its first single-origin coffee from Vietnam with Starbucks Reserve Vietnam Da Lat. “When we received a sample of this coffee, we were delighted at the quality,” said Leslie Wolford, senior coffee specialist for Starbucks. “Vietnam Da Lat has a bright refreshing acidity highlighting kola nut, toffee, and vanilla. It is excellent as espresso, brewed coffee, or even cold brew.” Patricia Marques, a 13-year Starbucks partner based in Ho Chi Minh City, has served as general manager for Starbucks Vietnam since the company opened its first store in 2013. “Vietnam has a very long and proud coffee history,” Marques said. “People here prefer a strong, thick coffee with full body. They enjoy coffee at a very slow pace, sitting outside and having conversation with others.”

Douglas Jack moves M&B recommendation to ‘Add’ from ‘Hold’ after 18% decline in share price: Numis Securities leisure analyst Douglas Jack has moved his Mitchells & Butlers (M&B) share recommendation to ‘Add’ from ‘Hold’ after a 18% decline in its share price – he has a target price of 450p. He said: “Following circa 13% downgrades to our 2017E PBT forecasts to reflect the National Living Wage, there should be limited downside to forecasts, but medium-term upside if the company’s operational efforts gain traction. The company’s Q3 statement is due on Wednesday, 29 July. Share price weakness reflects forecasts readjusting down for National Living Wage. Guidance was for over £30m off PBT in 2017E, yet consensus has so far only fallen by £7m (3%) to £231m. We believe the company’s guidance reflects a 5% increase in ALL outlet-level labour costs, with no offsetting benefit from labour scheduling and increasing consumer cash flow. M&B has a high quality managed estate, which is currently valued on a P/E of 11x and an EV/Ebitda of 9.2x. The EV/Ebitda would be 7.8x if the pension deficit (equivalent to £1.20/share) did not exist, a scenario that could emerge if interest rates rise. We believe there should now be limited downside risk to forecasts and valuation, but it is likely that investors will have to continue to be patient if they are waiting for a positive catalyst (such as a resumption in dividends).”
Vietnamese street food concept My-Pho to open in Liverpool: A new restaurant serving Vietnamese street food is to open in Liverpool city centre over the summer. Entrepreneur Daniel Sung is converting a unit on Ranelagh Street, near Central Station, with the ambition of opening My-Pho in September. Sung said: “I’m really excited, it’s going to be a bit different. I’ve been planning this for more than a year and I have just trying to get this place, it took me about six months. We are going to be offering authentic Vietnamese food with no fusions with other Asian food.” He added the Vietnamese street food concept had taken off in London and in the US, Australia and Canada and he hoped it would prove popular on Merseyside. Once opened his restaurant will offer 80-100 covers across two floors.

Travelodge reports 18% sales growth: Travelodge, which operates more than 500 hotels in the UK, Spain and Ireland, has reported half-year revenue growth of almost 18% to £261m. The hotel operator has posted a 15.2% increase in RevPar (revenue per available room) to £35.87 for the six months to 1 July 2015. The average room rate for the period was up 11.4%. Chief executive Peter Gowers said: “Customers are responding well to the upgraded quality levels driven by our £100m modernisation programme. Businesses are choosing Travelodge in ever larger numbers and families have welcomed the introduction of separate beds for children. Our development momentum is beginning to accelerate. We opened five hotels in the first half of the year and we expect to open a further 45 over the next 24 months. We have already exchanged contracts for more new rooms in the first half of 2015 than we did in the whole of 2014. Boosted by our strong trading performance and the attractions of the value segment, major developers and financial institutions are showing their confidence in the future of new Travelodge.”

Papa John’s reports record first week sales at new site in the Wirral: Papa John’s has reported its newest store in Bebington, Wirral, Merseyside has opened to record (but unspecified) first week sales – the store now employs 25 local people. “Papa John’s concept of ‘Better Ingredients, Better Pizza’ has certainly given people food for thought, plus we topped that by putting some great ‘opening week’ promotional deals on the table,” said franchisee Jitesh Patel, who also runs a several other Papa John’s in the Midlands. “This combined with our local advertising meant we were very busy from day one!” Anthony Round, business development manager, Papa John’s added: “We now have more than 300 stores in the UK and our nationwide TV advertising is really tempting customers to try our fresh dough pizzas created for a better natural flavour. The success of the Bebington opening reflects the growing popularity of the Papa John’s brand and we are currently welcoming applications from potential new franchisees who are looking for a slice of the action.”

Welsh cider maker that supplies JD Wetherspoon undergoes management buy-out: Cider maker Gwynt y Ddraig, based in Pontypridd, Wales, has undergone a management buy-out supported by a £500,000 loan from Finance Wales. The company produces about 20 premium cider and perry products, including Orchard Gold and Black Dragon ciders, fruit-based ciders as well as traditional scrumpy and perry. The company’s products are available in Brains and JD Wetherspoon pubs in the UK and can also be found on the shelves of Morrisons, Tesco and Waitrose. Gwynt managing director Andrew Gronow said: “We’ve come a long way at Gwynt y Ddraig since making our first few barrels of cider using an old cider press back in 2001. I have ambitious plans to continue expanding the brand both at home and abroad and expect to take on more staff over the next few years.” Gronow set up the cider mill with partner William George in 2001 and, after securing funding from the Welsh government, launched it as a full-time business in 2004.

Loungers and Prezzo to enjoy better views in Mumbles: A land deal means restaurants forming part of the planned Oyster Wharf scheme in Mumbles will enjoy better views than originally thought. Swansea Council has agreed to sell a strip of land that borders the Tivoli Amusements building in Mumbles Road to the scheme developers. The Oyster Wharf development will stretch from Tivoli Amusements to Oystermouth Square. Café bar Loungers and Prezzo are set to occupy two units adjacent to the Tivoli building that overlooks Swansea Bay. According to the council, the sale of the land will allow the developers to construct the units to a better standard, improve the appearance of the Tivoli rooftop and give customers better views.

Viva Brazil to open fourth site in Newcastle tomorrow: Brazilian restaurant chain Viva Brazil is set to open its fourth site in Newcastle tomorrow (Thursday, 23 July). The company is opening the £750,000 140-seat venue in Grey Street, creating 30 jobs. The restaurant features a salad bar offering a range of freshly prepared salads and vegetables and a large bar serving a wide range of drinks, cocktails and wines from across Latin America. Viva Brazil owner and managing director Andy Aldrich told ChronicleLive: “Following the success of Viva Brazil in other UK cities, we are thrilled to announce the arrival of our award-winning concept to Newcastle, where we are confident that people will also fall in love with the brand, our offer, and the personal service which we give.” Viva Brazil is an authentic-style Brazilian steakhouse where professional passadors move from table to table, hand-carving a selection of slow-cooked meats from large skewers in front of customers. The company first opened in Liverpool in 2010 and has sites in Glasgow and Cardiff. Its fifth and largest venue yet is due to open in Birmingham in September.
Starbucks ‘preferred roadside partner’ Euro Garages adds 172 new sites: Euro Garages has agreed to take over 172 new sites bringing the business’ total number of service stations up to 352. The deal will see the company, set up by BMES in 2001, purchase 104 Esso sites in the south east and 68 Shell sites. Last year the firm also signed a deal to take over a further 48 other Esso sites to add to its growing empire. During the financial year 2013-2014 the business reported revenues of £646m and holds a “preferred roadside partner” agreement with Starbucks in the UK to operate its drive-through sites. It also has partnerships with Subway, Greggs and Burger King to offer forecourt retail space.

Brew launches the Skippy Burger: Brew, the antipodean-influenced venue in Putney, has launched the Skippy Burger (£12.50) – a combination of kangaroo patty, sweet cherry jam and golden beet slaw, served with fries and salad. The buns are made in store and the venue has its own on-site butchery room for making the patties to ensure the product is tasty and fresh, a “welcome change from the more traditional burgers on offer at other restaurants”. Brew Putney is now listed on Deliveroo.

Douglas Jack – SSP set for growth as new contracts come in: Numis Securities leisure analyst Douglas Jack has issued an ‘Add’ recommendation on SSP shares, with a target price of 350p, as it wins new contracts. He said: “In quarter three, like-for-like sales picked up slightly, resulting in year-to-date like-for-like sales being up 3.1%. Overall, advancing like-for-like sales are being offset by adverse currency movements (Sterling strength) taking 4% off reported sales. With net contract gains starting to grow, as expected, we are leaving our forecasts unchanged. We believe margins remain the greatest source of upgrade risk. Like-for-like sales rose 3.2% in quarter three, up on half one’s 3%. This was driven by the UK (especially the air sector), North America (with Terminal 4 at New York JFK outperforming), the Middle East and Asia Pacific, whereas parts of continental Europe (particularly France and Germany) were challenging. We forecast 3% like-for-like sales growth over the full year, which should be supported by the improving trend in airports, which generate the majority of group revenues in half two. Net contract gains boosted quarter three revenues by 0.9% (the year-to-date impact is now flat). Over the full year, we forecast 0.4% net contract growth, aided by new openings that include Stansted, Waterloo, Nice and Toronto. The company is starting to accelerate expansion, and has recently announced new contract wins/extensions in Orlando, Tampa, Hobart, Luxembourg and Hong Kong. These should open over the next two years. Ebit margins rose by 60bps in half one, driven by the gross margins (rationalising recipes/ranges; new purchasing deals; better IT systems; and reduced wastage) and operating efficiency improvements (including labour scheduling). We believe guidance and our forecast of no margin growth in half two is cautious despite tougher margin comparables and higher pre-opening costs. Margins offer the greatest potential source of upgrades, in our view. We believe SSP should be capable of 45bps annual Ebit margin growth over the long run, based on 3% like-for-like sales. We forecast 47% earnings growth over the next three years, during which net debt/Ebitda is forecast to fall to 1.0x from 2.2x, based on what we view as conservative assumptions.”

Allegra – Nordic coffee market set for growth: The Nordic branded coffee shop market is poised to enter a strong growth phase, according to a report from Allegra Strategies World Coffee Portal Project Café2015 Nordics. The total Nordic coffee shop market (Denmark, Finland, Norway, Sweden) is forecast to reach 1,023 outlets in 2015 and is worth €436m. Recent mergers and acquisitions activity is a positive sign for the future growth of the Nordics coffee shop market, said the report. The purchase of the leading Nordics chain Espresso House and Danish chain Baresso by JAB Holdings this year follows independent Swedish private equity group, Valedo, acquiring a share of Danish chain Joe & the Juice in 2013. Allegra predicts the total Nordic coffee shop market will exceed 1,500 outlets and €814 turnover by 2020, driven by branded coffee chain expansion, with outlets predicted to grow at 8.5% and revenue at 13.3% compound annual growth rates over the next five years.

Host of companies sign up for Professor Chris Muller’s Multi-site Management Masterclass: A host of sector companies have signed up to attend the next Multi-Site Management Masterclass led by Professor Chris Muller, on Friday, 2 October. Those attending include: Solent Pizza, Amber Taverns, Good Life Diner, Beagle & Co, Banwell House, Hickory’s Smokehouse, Brewhouse & Kitchen, Leeds Brewery, Benito’s Hat, PubLove, Paul UK, Maxwells, Gala Bingo, My Lahore, Taylor St Baristas, Roadchef, Corbin & King, K10, Forum Cafe Bars, McMullen, Small Batch Coffee, Fuller’s, Spirit Pub Company, Bulldog Hotel Company, and Baabar. Leading UK businesses such as Mitchells & Butlers and TGI Friday’s have sent staff to be taught by Professor Muller at Boston University’s School of Hospitality – now Professor Muller is returning to the UK to lead this bespoke day. His interactive seminar will include contributions from Welcome Break chief executive Rod McKie and Sticks ‘n’ Sushi UK managing director Andreas Karlsson. The event will provide valuable insights for founders and area managers of small and medium-sized multi-site companies and area managers of large companies. Tickets are £345 plus VAT and £295 plus VAT for ALMR members. To download or view the leaflet as a PDF file please CLICK HERE. To book tickets please contact: Tony Hughes, non-executive director at The Restaurant Group, said: “Chris is THE world authority on the restaurant industry, the go-to man if you want expertise and knowledge and this is a rare opportunity to see a true master giving a masterclass presentation.”

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