Wasabi reports turnover increases 14.3% to £72.7m, opening new central production unit this year: London-based sushi and bento business Wasabi has reported a 14.3% increase in turnover to more than £70m “driven by strong like-for-like sales and continuation of our opening programme”. The company reported turnover increased to £72,659,539 for the year ending 2 January 2016, compared with £63,593,170 the year before, according to accounts filed with Companies House. Pre-tax profit fell to £2,392,755, compared with £5,698,915 the previous year. It opened a further seven sites during the year, including three outside London, to take the estate to 45. The company stated: “In 2015, the business continued its growth momentum, with turnover growing by 14.3% to £72,660,000. This was driven by strong like-for-like sales growth and the continuation of our branch opening programme. Ebitda fell by 43.8% to £4,787,000 (2014 – £8,516,000), excluding one-off income from a lease surrender in the prior year, like-for-like Ebitda fell by 35.2%. This was mainly driven by an increase in pre-opening costs as we opened more branches than the previous year (2014 – four branches), and a significant increase in external cost pressures. Operating profit fell by 59.1% to £2,315,000 (2014: £5,660,000). The director believes the company has a strong platform for future expansion, both in the UK and internationally. The company’s innovative and fresh approach to food has helped to establish a strong brand that continues to grow in popularity. With the introduction of a new central processing unit in 2016, we will benefit from a significant increase in both capacity and efficiency. The company has ambitious growth plans, which could adversely affect the company if not delivered in a controlled manner that does not affect trading in the existing portfolio. The company has significant experience in identifying suitable sites and negotiating cost-effective commitments for leases and capital expenditure together with procedures to assess the viability of new sites. The company generates organic sales growth and hence cash flow without requiring material investment. The company continues to research and evaluate opportunities to expand the company’s portfolio within the UK and overseas to maintain its competitive position in the fast food sector. The company has plans to open branches in the UK and New York during 2016 and remains confident these will be successful and it is able to improve the level of performance of its existing portfolio at the same time. Funding for these developments comprise a mix of internally generated cash and available loan facilities. Further expansion will follow a similar funding model, including the assessment of the company’s ability to afford new loan facilities from third parties. We continue to invest in the design and layout of our branches and the use of new technology to monitor our customers’ buying patterns. The director regards the investment in research and development as important and integral to the continuing success of the business and ensuring we provide our customers with a store and brand they are likely to remain loyal to. We have developed our pay benefit package and training to ensure we attract and retain employees who have the necessary skills and vocation for the sector.”
Deltic Group to open £1m Pryzm nightclub in Birmingham tonight, sixth site: Deltic Group, the UK’s largest operator of premium late-night bars and clubs, will open its Pryzm nightclub in Birmingham tonight following a £1m investment. The new venue is on the site of former nightclub Gatecrasher, which the group acquired in January. The Broad Street club is the group’s sixth Pryzm in the UK and includes a room called Curve – a more intimate space with DJs playing the latest R&B chart tracks – and a disco room, Vinyl, featuring a flashing dance floor. The club also has 45 pre-bookable booths and is the first Pryzm in the UK to offer a private party room. Deltic Group chief financial officer Russell Margerrison said: “The Midlands is an important region for our business and we’re delighted to be opening a club in the heart of Birmingham’s party district in Broad Street.” Deltic Group will open another £1m Pryzm on Friday, 1 July – this time in Nottingham after converting its Oceania venue. In May, Deltic Group reported a 16.8% rise in Ebitda to £13.4m in the year to 27 February 2016. Turnover was up 8% to £101m and profit before tax grew to £4.3m (2015: £3.7m). The other Pryzm nightclubs are in Brighton, Bristol, Cardiff, Kingston-upon-Thames, and Leeds.
Porky’s £650,000 crowdfunding campaign backed by beer-brewing Saracens stars: London-based barbecue restaurant Porky’s BBQ has had its £650,000 fund-raise on crowdfunding platform Crowdcube backed by two beer-brewing players from Aviva Premiership rugby club Saracens. The company has received investment from Alistair Hargreaves and Chris Wyles, who brew Woolpack lager. The beer is available in 15 bars in London and will now add Porky’s five restaurants to the list. Porky’s co-founder Simon Brigg said: “We have recently been given a boost by two Saracens rugby-playing champions. Alistair Hargreaves and Chris Wyles, domestic and European cup winners, have invested for their part of the business, and will also become drinks partners after introducing their Wolfpack Lager to us. Those who have been to a Saracens game will recognise the Wolfpack bus that serves its popular lager to fans. Team players and businessmen, Alistair and Chris, are already selling their beer in 15 bars across London, and will add all five of Porky’s BBQ restaurants to their roster of taps in the coming weeks. We caught up with the boys at Wildman Craft Beer Co recently and managed to taste their brew – it was an instant winner. Naturally we mentioned our exciting Crowdcube raise to them and they were keen to jump on board. Having them as both business and beer partners will be great for future events and collaborations. Porky’s BBQ and Wildman Craft Beer Co will be hosting a partnership event at Boxpark on 4 August.” So far, 58 investors have pledged £114,940 to the campaign with 14 days remaining. Porky’s is offering a 7.51% equity stake in the business for its next stage of growth as it looks to build a 15-strong estate in the next three years.
JD Wetherspoon boss tells of ‘heartache’ at decision to sell iconic Newcastle city centre pub: JD Wetherspoon founder Tim Martin has revealed his heartache at the decision to sell an iconic pub in Newcastle city centre – a venue the company had purchased only six months before for £5.6m. The company has yet to find a buyer for the Union Rooms in Westgate Road, which JD Wetherspoon put on the market in May alongside 32 others. Martin told Chronicle Live: “We have got five pubs in Newcastle and are opening up pubs in the suburbs of Newcastle, investing millions of pounds. We put one pub too many in the centre. We think it is better to put our investment into ones that are a little further away. So we will still have a Wetherspoon to go to in Newcastle but it does cause us heartache to lose the Union Rooms.” In May, the company instructed agents CBRE and Savills to handle the disposal of 45 JD Wetherspoon pubs. The properties were put up for sale individually, in small packages or as a portfolio, and were all in strong town and city centre locations in England, Scotland and Wales. Of the 45 pubs, 33 were brought to the market for the first time, including the Union Rooms. In December last year, JD Wetherspoon bought-in the freehold of the Union Rooms for £5.6m from K/S Westgate.
Morgan Stanley notes divergent share performance of Greene King and Mitchells & Butlers: Morgan Stanley leisure analyst Jamie Rollo has noted the divergent share performance of Greene King and Mitchell & Butlers in the past year, with the former’s shares performing substantially better than the latter. He said: “Like-for-like sales (Coffer Peach industry tracker) fell 1.4% in May, a deterioration from -0.8% in April and +0.6% in March. May’s figure was primarily caused by casual dining chains (-5.6%), with pubs +1%, and impacted by holiday timings. Still, the trend has been deteriorating all year, with now three consecutive months of less than 1% growth on a two-year basis, the worst period of trading for more than three years. The Restaurant Group (first quarter 2016 -1.5%) and Mitchells & Butlers (first half 2016 -1.6%) both reported declines in like-for-like sales, supply growth remains high (3.5-4.0% annual growth), and the industry faces challenges from shifting consumer behaviour, falling beer consumption, and competition from supermarkets and coffee shops. In this context, we note the sharp difference between the share price performance of Greene King and Mitchells & Butlers, the two largest managed pub operators. While we acknowledge Greene King’s obvious positive differences (stronger like-for-like performance, benefits of Spirit acquisition, higher dividend support, stable management), Mitchells & Butlers arguably has a more attractive business mix (all managed pubs), a higher freehold mix, and a much cheaper valuation (calculated 2016e price to earnings ratio of 7.2x versus 11.5x). We expect solid FY16 results from Greene King later this month, but any recent like-for-like sales weakness, or any disruption from the required catch-up spend at Spirit, could have a disproportionate share price impact if it derates towards peer levels.”
BNP Paribas Real Estate launches new team offering full-scale expertise and services across the leisure sector: Property adviser BNP Paribas Real Estate has launched a team offering clients full-service transactional and consulting advice across the leisure sector. The team includes three new appointments who have specialised restaurant and pub expertise. Mark Calder joins as a director from niche company Restaurant Property. He will focus on central London restaurant leasing, acquisitions and disposals on behalf of landlords and tenants. Sally French also joins from Restaurant Property and will focus on tenant representation in the restaurant market. Nick Lyell joins BNP Paribas Real Estate as a director within the leisure team. He previously worked at Savills and specialises in investment and leasing work for pubs and restaurants. Nigel Ball will head up the team. He has worked in the licensed leisure sector for more than 20 years and was previously BNP Paribas Real Estate’s head of lease advisory. Ball said: “As a business we’ve had pockets of niche leisure expertise – such as business rates, lease advisory and agency – for years, but as the leisure sector and its importance to real estate grows, so do our client requirements. We have decided to invest in this area of capability to offer our important clients full-scale expertise and services across the leisure sector, from rent reviews and rates to investment and leasing and everything in between.” In 2015, the leisure sector was responsible for 14% of all commercial real estate investment, with more than £10bn transacted, compared with only 2% in 2009.