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Sun 16th Jul 2017 - Update: Just Eat, Friska, Wahaca, Cobra, Vue
Just Eat puts loans on takeaway menu: Just Eat, the global market place for online food delivery has joined forces with Britain’s biggest peer-to-peer lender to offer loans to the 30,000 UK restaurants servicing its takeaway app. It has partnered with Funding Circle, a website that helps investors lend direct to small and medium-sized companies. Restaurants that are part of the Just Eat network will receive a discounted administration fee to help them borrow up to £60,000. The move is an attempt by the company to use its increasing scale to support the thousands of family-run takeaways that underpin its business. It aims to become a one-stop shop for fast-food companies that need finance and support. Just Eat director of restaurant services Robin Clark told The Sunday Times it wanted to provide a range of services, “whether for tax, or business rates or finance or legal”. Smaller food outlets are “facing a cocktail of increased price rises and the banks have shut up shop, it’s very difficult for them,” he added. Just Eat, which recently hired Peter Plumb as chief executive, has a market cap of more than £4bn. Petra, a Turkish restaurant in Islington, north London, is one of the first to take advantage of the cut-price lending service, borrowing £16,000 for a refurbishment. Owner Yilmaz Guney said: “Our business is booming. Recently, we were looking to take advantage of an opportunity to expand the business, but the banks were slow and couldn’t provide us with the help we needed.” Funding Circle co-founder James Meekings added: “Small businesses are the backbone of our economy. Nowhere is this more evident than in the great tradition of the British takeaway restaurant.”

Friska sells minority stake for £3m to support expansion plans: Independent healthy eating brand Friska has sold a £3m stake to private equity firm YFM Equity Partners to allow it to embark on ambitious plans to expand. The company, founded in 2009 by Bath University economics graduates Griff Holland and Ed Brown, has eight outlets across Bristol and Birmingham and expects to turn over £4.6m this year. It has sold an undisclosed minority stake to Leeds-based YFM Equity Partners, which has also backed the leisure brand Go Outdoors. Former Wagamama chief Steve Hill, who chairs the Vietnamese street food restaurant group Pho, becomes chairman. Friska, which means healthy in Swedish, plans to open at Manchester Science Park in the autumn, followed by outlets in the city’s central business district. Friska provides “feel-good food” using ethically sourced products, while supporting Third World entrepreneurs from the profits and relying where possible on renewable energy. Holland told the Sunday Times: “We have a pride around what we do and how we do it. We’ve spent the past eight years understanding what makes a quick-service restaurant tick – the sort of things you need to focus on to compete with the best, namely Pret A Manger.”

Wahaca co-founder – ‘Norovirus was a nightmare and so are business rates’: The co-founder of Mexican restaurant brand Wahaca, which was brought back from the brink last year after norovirus struck, has said mounting cost pressures are the company’s new “nightmare”. Mark Selby, who founded the company with MasterChef winner Thomasina Miers in 2005, admitted he feared during November’s outbreak the business he had given birth to could go bust as sales fell 45%. After staff fell ill at restaurants including Manchester and Covent Garden, customers started emailing in, which was when “all hell broke loose”. Selby had to call in Public Health England and it seems likely that the outbreak originated with a supplier, though the agency’s report will be released only later this summer. Selby told the Mail on Sunday: “Our world was falling apart. At one stage we thought we were going to have to close every restaurant for four weeks. During that time sales plummeted 45%, but if I’d had to close all sites, I don’t see how we would have survived.” A total of 18 of the company’s 25 restaurants were hit with 11 having to be closed. The experience changed the way Wahaca does business, including “absolute visibility with suppliers”. Though many openings followed the launch, Selby said he has never experienced inflationary pressures like now. He added: “Business rates on our Covent Garden site have gone from £85,000 a year to about £260,000, and it’s not just London. We are in Cardiff, Manchester, Chichester, Edinburgh, Liverpool, Dartford, Southampton and Brighton, and not one of them has seen rates decrease. Across all our sites, we reckon business rates will have gone up 40% by 2020, and some are jumping 25% to 30% straight away. In Central London it’s crazy.” In total, Wahaca will pay an extra £700,000 in rates this year alone. Selby added: “The government doesn’t realise how many businesses it’s killing around the UK. It’s hideous. We will get through it, but it’s made us look at our expansion plans and it makes some sites less viable.” Selby said the new National Living Wage will see the wage bill rise about 5% while the company also faces big rent rises. He added: “We’ve had two rent reviews recently, one raising the rent in Covent Garden from £140,000 to £400,000 a year, the other in Soho, raising it from £400,000 to £1m a year, which we are still disputing. ‘There is huge cost pressure. It’s unprecedented. We are looking at a cost increase this year of £1m to £1.5m on turnover of £45m. That is a big hit.” Selby said the increased costs would see menu prices go up “a couple of percent” but prices would have to increase 10% to offset the cost increases so Wahaca will “take a hit on profit”. But Selby said he believed the market for Mexican food was just getting going. He added: “In ten years, we want tacos to be as popular as pizza or burgers.”

Lord Bilimoria pockets nearly £6m as Cobra Beer profits rise: Lord Bilimoria has pocketed nearly £6m in dividends over the past year due to Cobra Beer – the lager brand he co-founded in 1989. Accounts for Cobra Beer Partnership showed sales fell 8% last year, but the firm boosted its pre-tax profits by 11% by cutting back on costs, including its spending on marketing. The company – a joint venture between Lord Bilimoria and Carling brewer Molson Coors – showed turnover dipped to £57m for the year ending December 31 2016, but profits rose from £7.7m to £8.5m. The company paid out an £8m dividend during the year and £3.8m after the year end, netting Lord Bilimoria £5.8m for his 49% stake.

Vue bosses eye sale: Vue Cinema bosses are in line for a blockbuster windfall worth hundreds of millions of pounds as it heads towards a sale or float. Senior management, led by Tim Richards, founder and chief executive, stand to share a jackpot of more than £400m from any deal. It is understood Vue’s owners have appointed investment banks Rothschild and JP Morgan to identify possible buyers, at the same time as making preparations for a stock market listing, reports the Sunday Telegraph. The company has had a price tag of about £1.6bn. A handful of top executives are sitting on 27% of the company, making it one of the biggest deal bonanzas seen. The rest is in the hands of two Canadian pension funds, Aimco and Omers, which bought Vue in 2013 for £935m. It will be the third time management have cashed in. They made millions in 2010 when Vue was sold to Doughty Hanson, and again when the Canadians swooped. Richards, who started Vue with just a handful of cinemas in 2000, made £50m through the second buy-out. Vue now has more than 200 sites, making it the sixth largest cinema operator in the world. Sales grew 9% to £773m last year.

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