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Morning Briefing for pub, restaurant and food wervice operators

Fri 22nd Jan 2016 - Update: Novus, JD Wetherspoon, Coaching Inn Group, JW Lees et al
Novus announces new chairman: Bar and restaurant operator Novus Leisure has appointed Peter Boddy as chairman with immediate effect. Boddy has many years of experience in the leisure sector and brings with him extensive expertise of leisure operations spanning health and fitness, licensed retail and sales. Toby Smith, Novus chief executive officer, said: “I am delighted to welcome Peter to the board. His extensive experience of leisure businesses will be invaluable to the whole Novus team and we look forward to working closely with him as we deliver the next stage of the Novus growth plan.” Boddy joins Novus from his positions as non-executive chairman of The Original Bowling Company, chairman of The Harley Medical Group, and non-executive chairman of Xercise4Less. Following strong trading over the Christmas period, Novus began its 2016 capital investment programme with a £900,000 investment at Sway in Great Queen Street, Covent Garden, which is due to reopen at the end of this month.

12 of the 34 JD Wetherspoon pubs put on the market still for sale: 12 of the 34 pubs put on the market by JD Wetherspoon in November are still to be sold. Agent CBRE, which is marketing the sites on behalf of the pub company, has provided updated details of the remaining sites, which comprise of nine freehold/long leasehold and three leasehold pubs. All are in major town and city centre locations across England and Scotland and the properties are available individually, in small packages or as a portfolio. The average weekly turnover per pub is £23,750 per week with food sales representing 35% of turnover in 2014/15. The properties remaining are as follows: Derby – Thomas Leaper; Doncaster – Old Angel; Dundee – Capitol; Glasgow – Society Room; Hammersmith, London – Plough and Harrow; Kingston Upon Hull – Zachariah Pearson; King’s Lynn – Lattice House; Portsmouth – Trafalgar; Stirling – 43-51 King Street; Swindon – Groves Company Inn; Trowbridge – Albany Palace; and Worthing – Sir Timothy Shelley. Of the 34 pubs originally put on the market, 18 are now under offer and four have been withdrawn from the market.

Coaching Inn Group appoints new revenue and marketing manager ahead of planned expansion: Coaching Inn Group, the operator of nine coaching inns led by Kevin Charity, has appointed Isabel Diggins as its new revenue and marketing manager to drive accommodation sales across the rapidly expanding group. Diggins has a decade of experience as revenue manager with operators including Jupiter Hotels Management, Puma Hotels and New World Hotel Operations. Diggins will lead a new central reservations team, based in Leicestershire. As well as driving accommodation sales, the new central reservations team will be tasked with helping maintain brand standards with regular auditing of the accommodation offering. Edward Walsh, Coaching Inn Group finance director, said: “We’re delighted that Isabel will be joining us and leading our new central reservations team. Last year saw us deliver over £4m in accommodation revenue and, given our plans to acquire six more sites this year alone, including approximately another 200 bedrooms, we knew the time was right to put in place central reservations to free up our reception teams to ensure we continue to deliver a first-class service across the whole group.”

JW Lees to recruit director of HR and give them place on company board: North west brewer and retailer JW Lees is to recruit a director of HR and give them a place on the company board. Managing director William Lees-Jones told Propel: “We’ve always said people are our greatest asset and then someone pointed out to us if that was the case, why didn’t JW Lees have HR represented on the board? So, after some mumbling about people being at the heart of everything we do, we have decided to go for it and to recruit a director of HR. Like all big ideas, we have no idea whether this is going to take us forward, but we believe we need to mentor and develop our people so they can grow their careers with JW Lees, rather than us investing in our physical business and then leaving the all-important job of running our pubs to assorted ‘randomers’ who have shown that they are good at running other people’s pubs, but not necessarily ours.”

Camerons Brewery continues Longhorns partnership roll-out: Camerons Brewery is continuing its partnership with Longhorns BBQ Smokehouse by introducing the brand to its Head of Steam venue in Tynemouth. The menu will officially launch on Thursday, 4 February, offering customers a range of barbecue smokehouse food options that have proved popular in other Camerons outlets. To celebrate the partnership, Longhorns will be giving customers a chance to sample a selection of its food the day before the launch. Chris Soley, director and general manager at Camerons, said: “The partnership with Longhorns has been hugely successful, and the synergies between the two brands are perfect. We have been delighted with what they have done in our venues so far and we will be looking to work with them on additional pubs within our group. Longhorns are experts in food and we are experts in beer, so the relationship ensures our customers have a fantastic experience in our pubs.” Longhorns has already launched its restaurant at three Camerons Brewery venues – the Dun Cow in Sunderland, Tilleys Bar in Newcastle and The Head of Steam pub in Norton.

Five Guys submits plans to open in Watford: Five Guys has lodged plans to open a new restaurant in Watford. The company has submitted an application to Watford Borough Council to open on the site of Que Pasa in the High Street, which is in a grade II-listed building, reports the Watford Observer. In a letter supporting the application, planning agent Pegasus Group said: “There is a need to introduce a new occupier to this listed building, which is viable and helps to secure its future upkeep. Occupation of the site by Five Guys as a restaurant will provide a long term investment in the building and provide an attractive addition to the street scene. The less than substantial harm arising as a result of these proposals would be more than offset by the benefit arising from the introduction of this use.”

Lucky Chip founder launches London Burger & Wine restaurant, plans more venues: Lucky Chip, the company which started as a burger stall in 2011 and expanded to the Old Queen’s Head pub in Islington, has opened its first permanent restaurant. Lucky Chip Burgers & Wine has launched in Ridley Road, Dalston, where the company’s signature burgers have been paired with a list of 120 wines focusing on the New World. Burgers & Wine will also serve steaks and seafood, with starters including a changing selection of tartares as well as croquettes and chicken wings. The restaurant will play a soundtrack of 1980s tunes via an amp once used at Woodstock festival. Founder Ben Denner said: “Nowhere else is doing really good burgers with really good wine at the moment. I would like to open at least another three Burgers & Wine restaurants as well as some more relaxed restaurants just called Lucky Chip.”

Searcys to open restaurant with Anthony Demetre at Barbican Centre: Osteria, a restaurant created by luxury hospitality brand Searcys in collaboration with chef-entrepreneur Anthony Demetre, will open on the second floor of the Barbican Centre on Thursday, 11 February. The restaurant will specialise in the bistronomy style (informal and more accessible fine dining) that Demetre has helped to pioneer. Led by head chef Patrick Leano, formerly of Michelin-starred Arbutus in Soho, menus will focus on Italian produce and seasonality. Starters will include carpaccio of sea bream, clementine, fennel and chilli, and buratta with artichokes, carrots and hazelnuts. Sharing dishes will also be on offer, such as porchetta and Roman-style tripe. Homemade pasta dishes will be central to the menu, while signature mains include suckling pig with sage potatoes and slow-cooked beef polenta. Classic desserts such as polenta cake with orange marmalade will complete the menu. Cocktails will focus on Italian classics such as negronis and bellinis. Demetre said: “I’m fortunate to have the talented Patrick Leano as head chef as he shares my ethos and passion for Italian cooking.” The walls of the restaurant will showcase work by artists from Limoncello Gallery in Haggerston.

Red Squirrel Group launches £500,000 crowdfunding campaign to expand brewery and craft beer shop estate: Red Squirrel Group has launched a £500,000 fund-raising campaign on crowdfunding platform Crowdcube to expand its brewery and craft beer shop estate. The Hertfordshire-based company, founded by Greg Blesson and Jason Duncan-Anderson, is offering a 9.80% equity stake in return for the investment. It plans to use the funds to expand its brewery operations and upscale its craft beer shops from three to ten sites. The pitch states: “We are looking for investors to share in the development of the Red Squirrel Group. We have two key ranges of craft beer, brewed by our team of passionate brewers. The two key ranges include the Red Squirrel Range, where tradition meets modernity, and Mad Squirrel, which we consider to be purely contemporary and innovative. Our beers are currently distributed within our chain of craft beer outlets under the ‘The Brewery Shop’ brand and within both the UK domestic market and export scene. We currently have three stores aimed to combine the welcoming and pleasant aspects of an old fashioned boozer with the aesthetic and service of a high-end drinks retail business. There are plans in place to upscale the ‘The Brewery Shop’ model to ten outlets in provincial and mainstream towns within southern England, together with expanding our modern craft brewery, based in Hertfordshire, from 5000HL (50,000 litre capacity) to 15,000 HL (150,000 litre capacity). This expansion is needed in order to meet the growing demand for our beer brands. After the first years in trade, the business established its core consumer base in London and the Home Counties and identified that quality of distribution was the key to success, as it is in any competitive market. To broaden the accessibility of the company’s increasing range of beers; the company launched its first Brewery Shop in Chesham, Buckinghamshire (at the end of the Metropolitan line). We believe this style of outlet was innovative and different, crossing over between on-site consumption and retail allowing consumers to truly experience the breadth of craft beer. The Red Squirrel Group since its launch now supplies to over 400 licensed premises within the UK, working with groups such as SIBA, Greene King and The Beer Company who supply to Mitchells & Butlers, together with a wide spectrum of independent outlets. Additionally, we are now supplying international markets and strongly see potential to grow our exports substantially once the brewery capacity has been increased. It is well documented, through both social media and the national press, that craft beer in the UK is a high growth market. The total on-trade craft beer market showed sales of £225m in 2013. We believe it is clear that there is considerable scope for craft beer to increase its market share and widen its appeal further outside of its core 25-45 age group following. We aim to position our Brewery Shop brand outlets within the visible edge of high street areas, within close proximity to railway stations. The general theme will be that of a retail and bar crossover. We strive for our outlets to be functional, yet quirky but not overly lavish or gimmicky. In premises, where space permits, there will be larger areas of seating and opportunities for private hires and educational events. The company is looking to broaden its distribution base in the UK in order to cement the company’s long-term position. We hope the export market will play a part in the revenue development – we hope for volumes to account for around 8% of total revenue sales. At present we feel there is a significant gap in the market for our Brewery Shop brand concept, as we have only seen a few fledgling craft beer crossover businesses that are operating in the market successfully. We believe the ownership of an existing craft brewery and building established relationships with other brewers is our USP, and will be key to the expansion of our model. The company has assessed valuations of those they consider to be peer groups. The Red Squirrel Group aims to follow the likes of businesses such as Camden Brewery and BrewDog having recently raised capital on multiples of up to ten times their revenues. Camden Town Brewery recently sold to AB InBev in a reported £85m deal. The company is expected to launch on crowdfunding on a pre-money valuation of around £4.6m. This would value Red Squirrel Group on a circa 2x multiple to (projected year-end June 2016) revenue, ie a 50-60% discount to what we consider to be its peer group. Yet we expect Red Squirrel Group’s revenue growth potential to be greater than its peer group comparisons. We believe the valuation reflects the earlier stage of Red Squirrel Group’s business relative to some of these comparisons.” The company forecasts sales of £973,000 in the first 12 months, £2m the following year, and £4.6m by 2016/17.

Dry January turns wet as UK bar bookings rise 60%: Bars are enjoying a strong start to the year, despite Dry January, with bookings up 60% compared with last year, according to nightlife-planning firm DesignMyNight. The company’s data, based on bookings at venues including Dirty Martini, the London Cocktail Club and Fuller’s pubs, reveals that for many, one week off the booze was enough as 55% of bookings in January so far came in the second week of the month. There was also evidence many people had no intention of enduring 31 days of abstinence, as 30% of January’s reservations were registered in December. DesignMyNight founder Nick Telson told the Evening Standard: “Consumers for the most part have been keeping January wet, looking for deals and happy hours to save money where possible and providing the bar and casual dining market with a steady run of bookings.” Tobias Jackson, director of London chain Adventure Bars, said: “The first week of January caught us off guard as it was really quiet, but our guests have awoken from the second week and are back to enjoying themselves, with no signs of Dry January or the cold weather seeming to affect us at all.”

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