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Thu 31st Aug 2017 - Propel Thursday News Briefing

Story of the Day:

Sbe ‘still committed’ to Hakkasan Group merger: International luxury resort company Sbe Entertainment has said it is still committed to merging with UK-based nightclub and restaurant company Hakkasan Group despite months passing without a deal. The statement of continued interest in buying Hakkasan comes as accounts filed at Companies House for Hakkasan Group showed turnover for the year to 30 June 2016 was $338.9m compared with the 18-month turnover of $396.2m previously ($264.1m pro rata for 12 months and an increase of 28%). UK revenue was up 14% to $60,572,000, driven mainly from Yauatcha in the City of London, which opened in June 2015. Turnover from US operations during the year was $262,508,000 and $15,850,000 from the rest of the world. Its Shanghai Hakkasan saw revenue increase 44%; contrasted by an 8% fall in revenue from its Dubai Hakkasan. In the US, the core Hakkasan portfolio, including the nightclub in Las Vegas, saw a fall of 16% in revenues, excluding Hakkasan Los Angeles, which closed in July 2015. It said the reduction in revenue from the Hakkasan nightclub was “more than compensated” by the increase in revenue from the Omnia nightclub, also in Las Vegas. Adjusted Ebitda for the year was $18.7m compared with $6.4m for the 18-month period, which on a pro rata basis would be $4.3m and therefore an increase of more than 300%. Subsequent to the year end, the $20m loan repayable in full in December 2016 was part refinanced with $15m now due for payment in full in 2020. Sbe revealed in March it was in talks to merge with Hakkasan to create a large-scale, globally diversified hospitality company with the deal expected to have completed by the end of May. A Sbe spokesman told the Review Journal: “Sbe remains in negotiations to complete a financial transaction in which Sbe’s and Hakkasan’s formidable hospitality assets are combined into one company. We are looking forward to completing the transaction to accelerate our already robust expansion.” The combined company would have an equity value of about $1bn. Hakkasan Group, which has 60 venues across four continents with another 30 due to open by 2020, is fully owned by Alliance International Investments of Abu Dhabi. Neil Moffitt stepped down as chief executive in April after five years with the company but said the impending merger had nothing to do with his decision.

Industry News:

Propel Multi Club Conference opens for bookings, Lucky Voice founder to present: The final Propel Multi Club Conference of 2017 is now open for bookings. The full-day event takes place on Wednesday, 1 November at the Millennium Gloucester hotel in London. Nick Thistleton, founder and executive chairman of karaoke bar business Lucky Voice, will talk about the brand, its development, his learnings about leadership and people development, and his subsequent transition into executive coaching. Multi-site operators of pubs, restaurants and foodservice outlets can book up to two free places by emailing Anne Steele on

Bar and Nightclub Conference open for bookings: This year’s Bar and Nightclub Conference, organised by the Association of Licensed Multiple Retailers (ALMR) and Propel, is open for bookings. It takes place on Monday, 9 October at Bafta, Piccadilly. It will be followed by the Dusk ’til Dawn Awards for bar and nightclub operators at Cafe de Paris in the evening. Speakers at the conference will include Dan Davies, chairman of the Institute of Licensing and CPL Training chief executive, talking to Peter Stringfellow about his career operating late-night venues. Stephen Thomas, godfather of the UK nightclub and bar scene, will offer reflections on the evolving bar and nightclub scene and predict how things will change in the next decade. Meanwhile, Peter Marks, chief executive of Deltic Group, will talk about evolving the company’s estate, the growing importance of social media and entertainment to drive footfall, and the results of Deltic’s own research into the late-night market. For the full schedule click here. Tickets for the Bar and Nightclub Conference are £89 plus VAT for operators who are ALMR members and £129 plus VAT for non-ALMR members. Supplier tickets are £165 plus VAT for ALMR members and £225 plus VAT for non-ALMR members. For the Dusk ’til Dawn Awards, tickets are £150 plus VAT for ALMR members and £195 plus VAT for non-ALMR members. Tickets for both events can be booked by emailing Jo Charity at

Starbucks UK to sell leftover food at 50% discount to tackle food waste and global hunger: Starbucks UK has introduced a new initiative to address the issue of food waste as well as global hunger. During the last hour of trading in more than 350 company-owned Starbucks stores across Britain, any food nearing expiry that would otherwise be thrown out will be sold at a 50% discount. The entire sale of each item will in turn be donated to Action Against Hunger, a humanitarian organisation, to help fund its projects helping malnourished children worldwide. The expansion of the programme comes after a trial in 16 Starbucks stores in Manchester earlier this year where over an 11-week period, £1,500 was donated to Action Against Hunger from food sales. Starbucks Europe head of communications Simon Redfern said: “Tackling a challenge like food waste is not an easy one, but we’re proud to have developed a programme that will deliver for the long term. Off the back of the success of our Manchester trial, we’re pleased to roll-out this programme to the rest of our company-owned British stores, and will be working with our franchise partners to see where else this programme could work as well.” Matt White, Action Against Hunger director of fund-raising and communications, added: “By working together with Starbucks and its customers we aim to reduce food waste while raising money to save children’s lives where food security is threatened most – from Yemen and Iraq, to the countries currently at risk of famine, including South Sudan, Somalia and Nigeria.”

Company News: 

Camino reports turnover down slightly in current financial year: Camino, the London operator led by Richard Bigg and backed by the Business Growth Fund, has reported turnover has fallen 1% to £4.2m in the first six months of its current financial year. The company said while its newest venue in Bankside has seen “substantial growth”, its other city-based sites were down year-on-year. The details were revealed in accounts filed at Companies House for the year ending 27 November 2016. Turnover for the year increased 5% to £8,812,489 compared with £8,397,271 the previous year. Pre-tax profit fell by more than 50% to £180,602 compared with £387,476 the year before. Camino operates sites in King’s Cross, Monument, Bankside and Blackfriars, while the company also operates Bar Pepito in King’s Cross. The company stated: “Net profit of £181,000 is reported (2015: £422,000). Of the £328,000 tax losses brought forward, tax losses of £131,000 have been applied against current year’s profits after the utilisation of capital allowances claimed this period, with the remaining tax losses being carried forward. Turnover in the first six periods of the financial year started 28 November 2016 of £4.2m is marginally down on the same period in the previous year (2015: £4.3m, 1% decline). The newest venue, Bankside, has seen substantial growth in this period however the city-based sites are down year-on-year, due to fewer event bookings and a large scale refurbishment of a property nearby to one of the sites that has resulted in a material number of corporate clients having to relocate for a period of time. The affected site remains significantly profitable. The company continues to seek appropriate new venues with a view to expand the existing estate, and has recently signed a lease for a new site in Shoreditch, London. This venue is due to open in October. We remain committed to providing excellent value for money and service standards to our customers, while careful cost review and a controlled expansion aims to deliver long-term profit and shareholder value growth.”

London Union reports Ebitda surges 83% as turnover passes £9m mark: Street food market company London Union has reported a surge in Ebitda as turnover passed the £9m mark. The company, founded by Jonathan Downey and Henry Dimbleby, saw turnover increase 85% to £9,085,000 for the year ending 1 January 2017 compared with £4,915,000 the year before. Ebitda jumped 83% to £2.7m compared with £1.5m the previous year, according to accounts filed at Companies House. It said all four markets operating during the period were profitable. The company stated: “The directors are pleased with the progress London Union made during this period. Having launched on 1 May 2015, the group continued to grow and develop its four street food markets in Dalston, Lewisham, Shoreditch and Canada Water during 2016. It also acquired a new, seven days a week, venue in Canary Wharf’s Crossrail Place that opened after the year end. All markets were profitable and in total generated £2.7m Ebitda. The group has deliberately invested in building a strong team to support its future growth plans. The impact of this in the year saw ongoing improvement in the group’s operating capabilities and margins as well as the development of new business.”

Whitbread-owned Costa Coffee commits to hiring at least 250 new apprentices by end of 2017: Whitbread-owned Costa Coffee has launched a major apprentice recruitment drive across the UK, as part of its commitment to offering careers and skill development in hospitality. Costa has committed to hiring at least 250 new apprentices by the end of 2017, all of which will receive the National Living Wage. There are 800 apprentices already in apprenticeships across Whitbread, with many more graduates working throughout the company. The fully-funded apprenticeship scheme, which is run in-house, offers nationally recognised qualifications focusing on wider business management, customer service and communication skills, as well as training in traditional barista skills. Costa said this ensures apprentices are able to progress within the company and the industry more widely, all while learning. Costa apprentice programme manager Russ Hartland-Shaw said: “As a leading UK hospitality business, we want to lead the way in training the next generation of leaders for the hospitality industry. We know our business can only be successful if the communities in which we operate thrive, which is why we are committed to providing a scheme that offers apprentices the right level of support and responsibility, as well as a clear, structured pathway to enable candidates to have a future within the company.” Costa apprenticeships have so far created more than 170 permanent roles for young people throughout the UK interested in pursuing a hospitality career. Vacancies will be available in stores throughout the country, including London, Manchester, Glasgow, Leeds and Birmingham. As part of its commitment to learning in the workplace, Costa is reinvesting the Apprenticeship Levy into existing programmes to increase the scope and potential they offer.

SSP Group to launch Knead in partnership with Paul Hollywood at Euston station next month: SSP Group, the UK-based transport hub foodservice specialist, is to launch Knead, its new upmarket bakery concept in partnership with Paul Hollywood, at Euston station in London next month. The site, which is just outside the station, is currently covered by hoardings. SSP clinched a deal with Hollywood in November to roll-out his bakeries across the UK. Following the Euston opening, SSP plans to expand the brand throughout national rail stations and airports. Knead will sell bite-sized chocolate tarts and sausage rolls designed by Hollywood, a judge on the Great British Bake Off, which customers will be able to buy by the inch. SSP chief executive Kate Swann said at the time of the deal: “We’re very excited about Knead.”

McDonald’s described as ‘dividend aristocrat’ as shareholders see payouts increase annually for four decades: McDonald’s has been described as a “dividend aristocrat” with shareholders seeing an increase in the payout annually for four decades. Writing on the Seeking Alpha website, author Dividend Appreciator said: “McDonald’s is on a roll and is set to continue offering nice total shareholder returns of more than 12% annually over the next five years. Moreover, investors buying into the name now will soon experience a nice 6.4% to 8.5% bump to their dividend. 1976 was the year McDonald’s started paying dividends. Ever since, it has not only paid dividends but increased them every year. This unbroken dividend growth record has earned it a place among the dividend aristocrats. The dividend, as we know, has been steadily increasing year by year. September is the month for the announcement of the new and higher dividend level for the next year. Judging from the payout ratio there is considerable room to grow the dividend. Over the past five years investors have gotten an average annual capital appreciation of 12%. Adding in an annual yield of around 3%, its shareholders have enjoyed a very competitive total return of 15% annually. My prediction is therefore for a hike of between $0.06 and $0.08 for a new quarterly dividend of $1.00 to $1.02. This would constitute a higher growth rate than in previous years.”

Paskin siblings open coffee shop concept: Siblings Layo and Zoë Paskin, founders of The Palomar, The Barbary, The End and AKA, have opened an English coffee house called Jacob the Angel. Located in Neal’s Yard, the 300 square foot site is next to The Barbary in Seven Dials. Jacob the Angel serves breakfast, lunch and tea daily. While the offer is largely takeaway, there is seating for ten covers inside and a small outdoor area. The menu includes freshly baked cakes, pastries and pies, sandwiches and seasonal salads, updated daily. Layo Paskin said: “The opportunity to take this space in Neal’s Yard was too good to pass up. We love the area. It’s full of other thriving independent restaurants and boutique shops and it struck us as the ideal location to launch something very different to the other catering concepts we’ve launched.”

Cottons to open fourth site next month, in Vauxhall: London-based Cottons Caribbean Restaurant and Rhum Shack will open a site in Vauxhall next month – its first south of the Thames. The company is opening the venue – its fourth to date – at St Georges Wharf on Thursday, 14 September. The 600 square foot site comprises an indoor restaurant and rum shack bar, with additional seating on the outside terrace. Drawing inspiration from across the Caribbean, the menu will include 48-marinated jerk chicken wings, spiced salt fish fritters with green mango chutney and chilli jam as well as lobster and crayfish mac ‘n’ cheese. The rum shack bar will showcase 300 different rums sourced from around the world alongside rum-based cocktails. Owner Chris Singam said: “We are excited to venture south of the river to bring the contagious spirit of the Caribbean to Vauxhall.” Singam launched Cottons in 1985 and it currently has sites in Camden, Notting Hill and Shoreditch. He also operates pan-Asian bar and restaurant concept Miusan in Camden.

South Australian official posts no-nonsense video in bid to get BrewDog’s attention over Adelaide plans: A South Australian official has posted a no-nonsense video in an effort to contact Scottish brewer and retailer BrewDog over its plans for a production centre near Adelaide. After learning of the proposal, Bill Muirhead, the London-based agent general to the government of South Australia, claimed he tried to contact the company for two months to no avail. Deputy agent general James Mraz has now released the video in a bid to get the company’s attention. Meanwhile, in a letter to BrewDog founders James Watt and Martin Dickie, Muirhead wrote: “Bit surprised we haven’t heard back. In Adelaide we pour beer on our Weet-Bix and use it as sunscreen – scrappy buggers like you are the state’s lifeblood. We thought you’d be knocking down our door.” He accused the company of having “sold out” by selling a stake to private equity firm TSG Consumer Partners. He added: “If you’re gonna make it in Australia, you need to go back to your roots. South Australia doesn’t do empty stunts. We’re the original punk state. We like people who give two fingers to the establishment – lads, this is the post-Brexit world. You can’t afford to dither between no deals and bad deals. You need good deals. And Adelaide’s prepared to offer you one. Let’s make it happen.” Mraz told the Evening Standard: “We think it is a great company and it makes some great beer and we would like to help it grow. We are trying to get an audience with BrewDog ultimately and we thought we would engage in the sort of tactics it knows.”

Beannchor Group lodges plans for Little Wing Pizzeria site in Newtownards: Northern Ireland hospitality company Beannchor Group has lodged plans to open a Little Wing Pizzeria site in Newtownards. The company has applied to North Down and Ards District Council to convert the Bank of Ireland in Conway Square. Beannchor Group hopes to open the restaurant, which will be the eighth Little Wing Pizzeria in the country, in October. Little Wing Pizzeria managing director Luke Wolsey told the Belfast Telegraph: “We have ambitious expansion plans for Little Wing and have been exploring a number of potential new restaurant locations.” The company previously said options for expansion were also under consideration in the Republic of Ireland and England. Beannchor Group owns pubs, hotels and restaurants across Northern Ireland, including National Grande Cafe/sixty6 and The Dirty Onion.

JKS Restaurants to open second Hoppers site next month, in Marylebone: JKS Restaurants is to open a second London site for its Hoppers concept, which offers snacks from southern India and Sri Lanka, next month, in Marylebone. The company launched the concept in Soho in late 2015. The much larger, 85-cover sister restaurant will be set across two floors of a site in St Christopher’s Place and also feature outside seating for 16. There will also be space for 24 people in the four private dining vaults, reports Hardens. It will open on Tuesday, 12 September and, unlike the Soho site, will take bookings. The menu will include new dishes such as Jaffna beef rib fry, tuna and tapioca cutlets with avocado sambol, claypot baby chicken, and black pork ribs with fennel and turmeric sambol. There will also be a daily changing rice and kari dish alongside new cocktails that feature arrack as the main ingredient. JKS Restaurants was founded by the Sethi family and also operates Michelin-starred Indian restaurants Gymkhana and Trishna, Indian food delivery concept Motu Kitchen, and gourmet hotdog and champagne concept Bubbledogs.

Former Savoy Hotel trained chef relaunches barbecue meat concept in Dorking, plans five-strong estate by 2020: Former Savoy Hotel trained chef Gerry McCorriston has relaunched his barbecue meat concept Caveman Barbecue, this time in Dorking, Surrey, and plans a five-strong estate by 2020. McCorriston opened Caveman Barbecue in Great Bookham in 2014 but closed in June this year in order to pave the way for a move into nearby Dorking. He has opened the restaurant in High Street with the menu featuring a range of mains, sides and desserts, with dishes such as hot honey chicken wings, pulled pork shoulder and jumbo shrimp with mango mayo. McCorriston told the Surrey Mirror: “The main reason we closed was Bookham was always a sort of a trial for the area. Barbecue is at quite a low level in the UK but it is a multimillion-pound business in America. Our plan has always been to get on to high streets.” McCorriston said he planned to open another Caveman Barbecue in the next year and then another three by 2020.

Sunderland-based operator Pub Culture acquires third site: Sunderland-based operator Pub Culture has acquired its third site, in Newcastle. The company is set to reopen The Brandling in Jesmond as The Dun Cow at Jesmond next month. Pub Culture currently operates the Dun Cow and The Peacock pubs in Sunderland. Co-founder Paul Callaghan told BDaily: “Jesmond is a vibrant, exciting part of Newcastle, and we see huge potential for this latest venue, which we are delighted to add to our portfolio. We have named the pub after one of our other venues, which has a traditional feel to it and will deliver a similar proposition to its customers – a fantastic selection of real ale, great food and a programme of live music, comedy nights and other excellent cultural entertainment. The Dun Cow at Jesmond will be built around the same successful model we have put in place in our other venues, while retaining the charm that made it so popular in its heyday.”

Former 100 Restaurant Group employees launch Pickled Fred in Shoreditch: Former 100 Restaurant Group employees Ben Lusty and Can Turker have opened an Asian-inspired restaurant and bar in Shoreditch, east London. The duo have launched Pickled Fred in Hanbury Street with pickles and ferments featuring strongly on both the food and the cocktail menus. Lusty and Turker, who previously worked at 100 Restaurant Group’s 100 Hoxton site, came up with the idea for their own place during a trip to the Philippines, where they encountered Fred, a “quirky, mischievous, pickle-stealing” monkey, reports Hardens. The Asian-inspired food menu is concise, with snacks, small plates and flatbreads. Many of the dishes are vegan, dairy or gluten-free. Meanwhile, Can’s cocktail list features Fred’s Preserver (green and black peppercorn infused vodka, preserved strawberry and rose petal wine, suze and aperol) as well as Smoking Goat (butter-washed tequila, mezcal, pineapple, sweet basil and agave).

Goodbody – expect good first-half results at Dalata but medium-term reservations remain: Goodbody leisure analyst Gavin Kelleher has said good first-half results are expected at Ireland’s largest hotel operator Dalata but medium-term reservations remain. Issuing a ‘Hold’ note on the shares with a target price of €5.15, Kelleher said: “We have updated numbers to reflect the various acquisitions/portfolio changes Dalata has announced, STR data releases and the recent weakness in sterling. The net Ebitda impact of these changes is an increase of 2% to FY17 and 3% to FY18. Adjusted earnings per share increase just 1% in both years. Trading updates and STR data released for the period suggest strong first-half revpar growth is achievable. We forecast first-half revenue growth of 18% and Ebitda growth of 24% to €44m. We expect first-half Dublin revpar growth of 5.3%, regional Ireland of 9.6% and UK of 5%. The key issues we will be focusing on include management’s view on new supply coming on stream in Dublin over the next two years, update on timings of likely closures of Ballsbridge Hotel and Tara Towers in FY18, update on new openings, future investment plans given it is close to fully invested, and commentary on future dividend payments. We continue to believe Dalata is a top quality operator and we expect a strong first-half given the attractive backdrop for the Irish hotel market. However, we continue to believe the potential for upside surprise in FY18 is limited given tough comparables and new supply to come in the Dublin market. Our valuation yields a target price of €5.15, which represents 6% upside to current levels.”

S4Labour strengthens team with restaurant company recruits: S4Labour, the online labour-scheduling management system from Catton Hospitality, has added three new members to its team. Gareth Thomas, who formerly ran one of the sites operated by the company’s pub vehicle Malvern Inns, has joined from Punch where he was an area manager for the Falcon division. He joins Richard Hartley in the sales team. Meanwhile, Chris Wells and Tobias Collinson are joining as account directors. Wells joins from Mexican restaurant group Tortilla where he was an area manager while Collinson arrives from a similar position at PizzaExpress. Catton Hospitality chief executive Alastair Scott said. “Gareth will further develop our relationships with our network partners, where we will continue to build stronger relationships and more integrated product offerings. We aim to be streets ahead of the market when it comes to customer service and Chris and Tobias will help accelerate that position. S4labour will be in more than 1,000 hospitality businesses this year and we will continue to invest in excellent service and product.”

Paramount Hotels goes into administration: The owner of a string of high-profile hotels has gone into administration. Paramount Hotels’ portfolio includes Shrigley Hall, Cheshire; the Palace in Buxton; the Majestic in Harrogate; and the Imperial, Blackpool. Others are the Oxford in Oxford; Cheltenham Park, Gloucester; the Angel, Cardiff; and the Imperial, Torquay. Shrigley Hall Hotel, Golf and Country Club near Macclesfield was acquired by the company in June as part of a ten-strong portfolio of regional hotels known as Project Solstice for more than £130m.The grade II-listed country house hotel features 148 bedrooms and is set within 262 acres (106 hectares) of private grounds. Paul Williams and Benjamin Wiles in Duff & Phelps’ London office, based at The Shard has been appointed as administrators, reports The Business Desk.
Zonal to restructure business to create marketing technologies division: Hospitality management solutions company Zonal is to restructure its business to create a new division, Zonal Marketing Technologies. The division will bring together TXD’s digital agency, mobile and web development business and the LiveRES online booking and table management offer. Olivia FitzGerald will head up the new division and the team will operate out of Zonal’s Staffordshire office. As part of the restructure, Zonal’s key marketing technology products and services, which include online reservations and table management solutions, order and pay apps, voucher management, loyalty, app development and campaign management tools, will sit under the one umbrella. Zonal chief executive Stuart McLean said: “The company was established more than 37 years ago as an EPOS provider, but today we are so much more than that, offering our customers a totally integrated suite of technology solutions that not only support hospitality operations, but also improve the customer journey from the moment they book online to settling their bill and beyond. The launch of our new Zonal Marketing Technologies division is a reflection of this progression and will help us focus on improving our business and delivering our long-term strategy and vision for the future.”

Secret Escapes acquires Czech website for ‘ten times larger than previously biggest deal’: Hotel deals website Secret Escapes has continued its aggressive expansion plans with the acquisition of Czech flash deals website Slevomat Group. The deal, for an undisclosed amount, will make the London-headquartered firm the biggest hotel deals provider in central and eastern Europe once it goes through in what is the company’s biggest acquisition yet. The deal is expected to complete in September and marks continued expansion for Secret Escapes after it launched into the Czech Republic, Slovakia and Hungary last year. While the amount was undisclosed, Secret Escapes chief executive Chris Saint said the acquisition was more than ten times larger than its previous biggest purchase. He added there were a range of “interesting acquisition targets” in the region that had yet to be snapped up by the larger players, and continuing to operate the business under its current brand was the best strategy for success. He told City AM: “The goal is to integrate the Slevomat Group with our existing businesses in central Europe. Central European businesses tend to be quite specific to the region that they’re in. Actually acquiring businesses that are run by strong local teams is a good way in.”

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