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Fri 18th Aug 2017 - Update: Barburrito, Mahiki, Oakman Inns, analysts' margin fears, tourism boost
Barburrito reports turnover growth as losses narrow: Mexican brand Barburrito, which is backed by the Business Growth Fund, has reported turnover increased 25% to £12,764,000 for the year ending 26 March 2017, compared with £10,225,000 the previous year. Pre-tax losses narrowed to £2,529,000 compared with a loss of £3,115,000 the year before, according to accounts filed at Companies House. Barburrito said it had now rebranded the five Pinto sites in Glasgow and Edinburgh it bought in November 2015. It also refurbished four of its established sites with one venue left to be upgraded to the new branding and design launched in FY2016. In addition, the company opened three new restaurants during the financial year – in the Union Square shopping centre in Aberdeen, a third site in Edinburgh in Forrest Road, and a relocated unit in Paddington Station in London. The company stated: “The reported turnover of £12.8m does not reflect the full impact of the new sites added during the year, as the company’s ‘run rate’ turnover is now in the region of £15m. The company’s reported Ebitda is at a similar level to the prior year. The growth in turnover noted above is offset in the year by the additional costs of integrating the acquired Pinto business and establishing the new restaurants. However, as these sites mature they are expected to drive significant Ebitda growth in future years. The company’s balance sheet position is strong, with cash reserves of about £0.8m at the year end. The company secured a loan facility with Barclays during the year and this funding has supported the latest openings. Since the financial year-end the company has opened its 21st site, in the Meadowhall Centre in Sheffield. The company has committed agreements in place for two further openings over the next 12 months, and will continue to explore other potential site acquisition opportunities.”

Leisure analysts – operators face further squeezes on margins: Leisure analysts have warned pub and restaurant operators face further squeezes on margins. Simon French, of Cenkos Securities, said: “The Coffer Peach Business Tracker for July shows like-for-like sales growth of 0.6% (prior year 0.3%) indicating a continuing difficult trading environment. Separately, Office for National Statistics data reports 3.0% menu price inflation suggesting volumes are down about 2.5% year-on-year. Total sales growth for the period was 3.7% as new supply remained at about 3%. Pub like-for-like sales increased 0.4% and restaurant like-for-like sales rose 0.9%. Like-for-like sales in London increased 0.5% and the rest of the country saw a 0.7% like-for-like rise. We expect demand to continue to remain under pressure given declining real household disposable incomes. Furthermore, margins remain under considerable pressure with food input price inflation reaching 5.8% in July. Jamie Rollo, of Morgan Stanley, added: The sector may have benefited from an increase in summer staycations due to the weak pound (and good June weather), or it may be further evidence of consumers prioritising experiences and services over goods and ‘stuff’. However, we question how long this is sustainable and note heavy cost pressures mean a growing number of restaurant companies seem to be getting into financial difficulties.”

Mahiki and Neville to open Manchester club next month, brand’s first UK regional site: Nightclub brand Mahiki will open its first UK site outside London next month after teaming up with former Manchester United and England footballer Gary Neville and his company GG Hospitality. The club will open at One Central Street featuring two rooms – Mahiki Manchester, which will open at 11pm on Thursdays, Fridays and Saturdays with exotic dancers, music and cocktails, and a cocktail lounge that will open daily at 5pm. Neville said: “We are excited to bring Mahiki to Manchester. It has long been known in London and overseas for offering a unique, fun experience and now Manchester will be able to offer that too. Mahiki is a celebrated nightspot and we know the people of Manchester will not be disappointed. It will add a new exciting vibe to the ever-growing nightlife scene in the city centre.” Mahiki co-founder Piers Adam added: “This is a city with community at its core and we are thrilled to partner with one of Manchester’s own, Gary Neville.” Zerum Consult acted as planning consultants on behalf of GG Hospitality and Mahiki. Meanwhile, Adam has axed plans to open a venue within Glasgow Rangers Football Club’s Ibrox stadium. Adam, David Phelps and Nick House launched Mahiki in London in 2005, followed by a Dubai venue in 2011 and recent openings in Marbella and Sardinia. Mahiki will also launch a site in Kensington next month in partnership with Jake Parkinson Smith, Fraser Carruthers and Carlo Carello, the men behind private members’ club Albert’s.

Inbound tourism numbers return to growth: Inbound tourism numbers returned to growth in June as they increased 7.4% year-on-year, according to the latest data from the British Hospitality Association’s (BHA) Travel Monitor. The figure represented a significant improvement on the 2% year-on-year decrease seen in May. However the growth is still below the 13% increase seen in the first four months of 2017. The monitor showed continued growth from North America with visitor numbers up 34%, while short-haul travel growth remained subdued with traveller numbers from Europe up only 2%. The number of UK residents travelling abroad for their holidays increased 7%, rebounding from the 5% decline in May, which the BHA said could indicate a potentially weaker domestic staycation market in the UK. Holiday visitors grew 21% but business travellers continue to decline, down 7% year-on-year for June. Overall UK spend by overseas residents was up 2%. BHA chief executive Ufi Ibrahim said: “It’s positive to see visitors returning to the UK after a difficult May. The latest BHA Travel Monitor shows inbound travel from Europe in June was only up 2% in spite of the weak pound, showing the UK cannot build its tourism strategy on currency fluctuations. With business travel down 7%, the government must ensure the UK remains open for business by immediately reducing the rate of tourism VAT, which is double that of our European competitors. We welcome the suggestion the government has taken BHA policy onboard and aims to retain visa-free access for EU visitors, who make up two-thirds of all visitors to Britain, after Brexit. The UK must also take advantage of growing global tourism and further tap into new markets, reforming non-EU tourist visa systems too.”

Oakman Inns becomes first pub group to receive prestigious training award: Oakman Inns and Restaurants has been named a winner of The Princess Royal Training Award, the first pub group to receive the honour. Organised by the City & Guilds Group, the awards recognise UK employers that create “outstanding training and skills development programmes that result in exceptional commercial benefits”. Oakman will be one of 40 companies honoured by The Princess Royal at a ceremony in the autumn. Oakman Inns and Restaurants HR director Jill Scatchard said: “This is a recognition of the time and effort Oakman Inns has invested in creating its in-house online training academy, Oakmanology. Its skill development modules are taken by everyone from the main board down and, since we introduced it four years ago, it has helped reduce staff turnover by 43%.” Oakman chief executive Peter Borg-Neal added: “We are a people business. We want them to be passionate and proud of what they do and, having just completed on our 20th pub, we are committed to continuing the development of our range of training schemes.”

Night tube has given hospitality sector ‘positive chance for growth’, says ALMR: The Association of Licensed Multiple Retailers (ALMR) has praised the positive effect London’s night tube has had on eating and drinking out businesses in the capital a year on from its launch. The ALMR said the service had given the sector confidence in an otherwise burdensome operating environment, providing a “positive chance for growth”. ALMR chief executive Kate Nicholls said: “The launch of the night tube not only gave confidence to the sector that London was serious about helping the night-time economy, it also provided a welcome boon for customers, employers and employees working in late-night venues. When business rates, employment costs and foodservice inflation are increasing pressures on eating and drinking out venues, the night tube has provided a positive chance for growth. Even in the early months of the night tube, late-night restaurant bookings were up by one-fifth with no evidence of harm or disorder. That has likely risen further over the summer and tourist season. London has one of the most attractive late-night hospitality offerings in the world and the night tube has given more people access to first-class pubs, bars and restaurants. The night tube also makes it easier for late-night customers and staff to get home. For workers in particular, this can make the difference between being able to work a shift or not. The importance of strong trading around the clock cannot be understated – daytime and night-time licensed venues support each other and the surrounding retail outlets as well. These all add up to being massive drivers in the capital’s economy.”

Timing is key when it comes to Christmas party bookings: Companies like to plan ahead when organising a works Christmas party with more than half (53%) preferring to book at least three months in advance and 42% leaving it no later than a month, according to new research by guest experience management experts HGEM. A survey of more than 1,300 people found timing is key when booking office parties, with almost half of guests (49%) saying the ideal date would be two weeks before Christmas Day. When choosing a venue, half of guests (50%) rate the choice of dishes on the menu as the deciding factor, with restaurants emerging ahead of pubs, hotels and bars as a preferred venue. A spend of between £15 to £30 per head is expected by the majority of guests. During a telephone enquiry, guests expect an efficient booking process, with 68% expecting the call to take fewer than five minutes. The majority (86%) of guests expect to be asked about a deposit as standard so operators should avoid focusing on this and use the call to provide detailed and engaging information about their offer, HGEM said. HGEM can record calls to provide insight into a team’s performance when taking bookings. The company said hotel brands Malmaison and Hotel du Vin improved their average call score by almost 20% last year. HGEM founding director Sally Whelan said: “You need to be confident every telephone enquiry is being handled professionally and your team has the skills to convert these enquiries into bookings.”

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