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Morning Briefing for pub, restaurant and food wervice operators

Tue 28th Mar 2017 - SA Brain reports turnover and profit growth, Star Pubs & Bars joins SIBA’s Beerflex scheme
SA Brain reports turnover and profit growth: Cardiff-based brewer and retailer SA Brain & Co has reported operating profit increased by 23% to £5.5m as turnover grew by 7% to £135m for the year ending 1 October 2016. Sales increases were largely driven by continued growth of the group’s Coffee#1 business, which grew by 28% following the opening of 14 new stores and underlying growth in existing stores during the year. The company’s managed pub estate grew by 3% in total compared with the previous year, and by 1.5% on a like-for-like sales basis, outperforming the overall national pub market by about 0.8%. More than £6m was invested in the company’s managed pubs, including £1.2m in The Dock in Cardiff Bay. Sales were boosted by a 5% growth in food. Pub operating costs were 0.5% lower than prior year, despite continued investment in staff development, marketing and the additional costs resulting from the introduction of the National Living Wage. Coffee#1 was named coffee chain of the year at the Café Life Awards for the seventh time in eight years. Underlying sales across the leased and tenanted pub estate were down by little more than 1%, while rationalisation continued with the sale of 13 commercially unviable pubs. The year saw the introduction of the company’s progressive new letting agreement, tenant support packages and pricing initiatives. 13 new agreements were signed during the year and six major pub redevelopment schemes were undertaken, helping to build momentum in the division. Sales of Brains’ portfolio of ales followed a wider consumer trend for more moderate alcohol consumption, with sales of Brains beers down on the prior year. However, The Rev James range, comprising Original, Gold and Rye, continued to grow, with sales increasing 20% in the year. Total volume through the brewery increased by 8%, mainly driven by contract brewing for Heineken. This contract came to an end in March 2017. Chairman John Rhys said: “The year saw good progress being made across many of the fundamental areas of the business and it is encouraging to see the significant improvement in operating profit. We invested significantly in the fabric of our managed pub estate at a level ahead of our business plan to continue to improve our guests’ experiences. Through our new agreements and an enhanced level of investment in our leased and tenanted pub estate, we are now seeing real growth potential, while Coffee#1 expanded further in terms of store numbers, sales and profit contribution.” Chief executive Scott Waddington added: “A wide number of initiatives were undertaken across the business during the year as we implement our five-year plan. I have been pleased with the progress in the last 12 months and delighted by the customer reaction to our pub developments, coffee shops, new food offers and beers.” 

Star Pubs & Bars joins SIBA’s Beerflex scheme: Heineken-owned Star Pubs & Bars has joined the Society of Independent Brewers’ (SIBA’s) Beerflex scheme to offer its licensees a wider choice of local cask ale. Star licensees who operate Cask Marque-accredited pubs will be able to order cask ale brewed by Beerflex participants within a 30-mile radius of their venue. With 550 brewers producing more than 3,000 beers, Beerflex will complement Star’s Discover Cask programme and enable its cask ale-focused pubs to increase their specialisation. To encourage participation in Beerflex, Star will help fund and support licensees wanting to gain Cask Marque accreditation. The deal comes after Heineken confirmed it would work with SIBA to ensure Punch tenants continued to have access to a range of beers from small independent breweries should its bid to buy 1,900 pubs succeed. Star Pubs & Bars operational commercial strategy director Mick Howard said: “The SIBA scheme will sit alongside our strong portfolio of leading brands and extensive third-party cask beer offering. It will ensure licensees have access to a wider range of quality beers from small, local, independent breweries. Heineken is a passionate supporter of the great British pub and is constantly looking for ways to deliver business benefit for our licensees and a great pub experience for consumers. This partnership with SIBA is another way we are ensuring our pubs remain relevant, innovative and successful and play their part in the heart of communities.” SIBA managing director Mike Benner added: “It’s a win-win partnership providing more choice for pub customers, improved access for local brewers and a great beer offer for Star licensees.” Meanwhile, SIBA announced its BeerX 2017 event, which took place in Sheffield earlier this month, recorded its biggest attendance since launching in 2013. Delegate attendance rose 59% compared with last year, with member visits up 69%, trade stand sales up 19%, and an 11% increase in footfall at the BeerAlive! festival. 

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