Fulham Shore reports turnover and Ebitda boost, Franco Manca makes minority investment in Made of Dough: Real Greek and Franco Manca operator Fulham Shore has reported turnover for the six months ended 24 September 2017 rose to £27.5m, compared with £19.9m the year before. The company reported headline profit for the period of £2.8m (2015: £2.6m). It achieved headline Ebitda of £4.5m, compared with £3.8m the previous year. Operating profit increased to £600,000 compared with £500,000 the previous year. The company also revealed Franca Manca had made a £200,000 minority investment in London-based pizza concept Made of Dough. Chairman David Page said: “The group’s growth has been driven primarily by new restaurant openings. During the six months ended 24 September 2017, the group opened three The Real Greek restaurants, seven Franco Manca pizzerias in the UK and one Franco Manca franchise pizzeria in Salina, Italy. In line with the group’s expansion strategy, these openings included a number of locations outside London, including Bournemouth and Reading. In September 2017, the group announced in its annual general meeting statement and trading update that it had taken the decision to simplify operations and focus on the group’s core brands by selling its business and property at D’Arblay Street, Soho. Discussions have commenced with suitable parties and as such we have, in the results, impaired the asset by some £0.3m and reflected the property as held for sale and a discontinued operation in the interim results. We have continued to invest in our teams and infrastructure to support our long-term growth plans. During the six months ended 24 September 2017, and as previously indicated, we commenced investing in the central team of The Real Greek as this business begins its national expansion. We also continued to invest in the team we have in place to support the continued expansion of Franco Manca. During the period ended 24 September 2017, the group had lower net cash inflow from operating activities of £3.3m (2016: £6.4m) due primarily to the group benefiting last year from an increase in trade and other payables. During the same period the group invested £7.0m (2016: £6.0m), the majority of which was in new restaurant openings. Included in investing activities is a minority equity investment of £200,000 by Franco Manca in Made of Dough, a new pizza concept, as part of Franco Manca’s pursuit of best in class pizza operations. Overall there was a net cash inflow for the period of £0.8m (2016: £1.1m). At the beginning of the current financial year, the group increased its facilities with HSBC Bank from £6.5m to £15m. Net debt as at 24 September 2017 was £9.7m (2016: £3.0m). No dividend is being proposed by the board. It remains the board’s policy that, subject to the availability of distributable reserves, dividends will be paid to shareholders when the directors believe it is appropriate and prudent to do so. Since 24 September 2017, the group has opened one The Real Greek restaurant in Bristol and two Franco Manca pizzerias in Kings Cross (London) and Bristol. This takes the number of restaurants operated today by the Group to a total of 58 in the UK, made up of 16 The Real Greek, 41 Franco Manca and one Bukowski Grill. We expect to open a further one or two new restaurants by the end of the current financial year to 25 March 2018. Some of our planned openings this year have been delayed by as much as six months as we seek better deals from landlords thus protracting lease negotiations. These delays have had the beneficial side-effect of improving our cash position and lessening our peak borrowings. We will keep under review our opening programme for the rest of the current and following financial years. We intend that our new restaurants will be selected to give us an average return on capital at the higher end of the scale previously recorded. We will achieve this with more rigorous site selection and increased contributions from landlords thereby lowering our costs, in cash terms, for new sites while at the same time negotiating rents off the lower levels that are increasingly evident. We also intend to commit to sites which follow our returns requirement rather than to sign up purely to fill a formulaic pipeline. As indicated in September 2017, the summer should have been one of the busiest periods of our financial year and the weak trading across the dining out market that we also experienced has impacted this year’s overall performance. Some of our pre-2017 restaurants, particularly in the London suburbs, are still experiencing revenue below the equivalent period a year earlier with increased volatility and some expected cannibalisation from our new restaurants in nearby locations. However, revenue from these restaurants have seen slight improvements from the poor summer period of July to September. Although we believe our half-year figures to 24 September 2017 were satisfactory, our full-year headline Ebitda to 25 March 2018 will depend on how our suburban estate performs in the second half of the year and also on the timing and performance of new openings. The slowdown in the UK retail and restaurant sector has been noted by many commentators, and is, we believe, the result principally of rising inflation, poor consumer confidence and a weakening economy. These factors, together with a number of rising costs, means that our pre-2017 estate, while profitable, is contributing less, on an average site by site basis, than last year. We will respond to the economic climate in the next 24 months as we find it, as we believe these factors will continue to affect the restaurant sector in the coming years, limiting our visibility for the second-half and beyond. Despite this challenging backdrop I am confident Fulham Shore is well placed; we have an experienced management team, who have navigated through several industry cycles, two strong brands that are renowned for their great quality, ambience and value, and a good site portfolio. We believe that our brands have significant customer appeal, which is underpinned by the food quality and value of their offerings. As a result, and despite the challenging backdrop, we are confident that the group will continue to grow over the coming years.”

Daisy Green Collection secures £3.4m to double in size: Australian-inspired restaurant group Daisy Green Collection has secured a £3.4m debt investment to almost double its size. The company, which operates eight sites including two barges, aims to use the funds from challenger bank OakNorth to expand to 14 sites by 2020. Founded in 2012 by two former City bankers, Prue Freeman and her husband Tom Onions, Daisy Green began life as a Ford transit van below the Gherkin selling coffee and smoothies. The business now spans London from Liverpool Street to Southwark, and its next project will be opening a 4,000 square foot space in Soho. Earlier this month, it launched its floating bar and restaurant in Paddington, west London. Two 50-metre barges – Darcie Green and May Green – are based on the Grand Union Canal outside Paddington Station and have been designed by British artist Peter Blake. OakNorth co-founder Ben Barbanel told City AM: “The Daisy Green Collection is an extremely strong, invested business – despite being incredibly young it is already Ebitda positive across all its mature sites, no doubt down to the commitment and passion of its founders.” Freeman, a former UBS investment banker, and Onions, who has held positions at UBS, Santander and Citi, aimed to create a chain that brought the flavours of Australasia to London. The business has been recognised by Vogue magazine as a “leading” vegetarian and vegan restaurant, serving dishes from bacon rolls with paratha roti to roasted aubergine with crispy rice and miso tahini sauce. OakNorth now has a loan book of more than £900m, and plans to lend a further £1.5bn next year.

Conviviality makes £25m offer for Central Convenience: Conviviality, the UK alcohol wholesaler serving consumers through the on-trade and through its franchise retail estate, has revealed its wholly-owned subsidiary Bargain Booze has made an offer to acquire the business and assets of 109 convenience stores and the rights as franchisor of a further 18 franchisee-operated stores trading under Central Convenience from WS Retail for a cash consideration of £25.0m. WSR is a wholly-owned subsidiary of Palmer & Harvey McLane, which entered administration on 28 November 2017. The company stated: “If the offer is accepted, the company will fund the acquisition through the completed placing of 8,000,000 new ordinary shares of £0.0002 each in the capital of the company at a price of 375p per placing share to raise gross proceeds of £30.0m. The placing is conditional inter alia on the acquisition being completed by 4.30pm today (Friday, 15 December) and has been fully underwritten by Investec, the company’s sole bookrunner, broker and nominated adviser. The company will issue a further announcement today to update on the satisfaction (or otherwise) of this condition. Central Convenience provides enhanced scale and reach for the Conviviality retail division, strengthening the group’s retail presence, particularly in the south and south west of England. It will add, in aggregate, 127 convenience stores, including 20 petrol forecourts, stores incorporating 47 post offices and 18 franchisee operated stores; securing wholesale supply to owned and franchised stores, allowing the group to realise further economies of scale. The acquisition is expected to facilitate acceleration of the group’s strategy to satisfy customers who wish to consume alcoholic beverages at home or out of home, whatever the occasion, serving customers directly via retail outlets and indirectly through hospitality and foodservice channels. Together, the acquisition and the placing are expected to be earnings enhancing in the group’s first full financial year of ownership of Central Convenience. For the 53 weeks ended 8 April 2017, WSR generated unaudited turnover of circa £75.7m and unaudited Ebitda of circa £3.5m. The directors of the company believe that potential exists for operational, buying and distribution synergies to be realised from the proposed combination of Central Convenience and Conviviality Retail.” Diana Hunter, chief executive of Conviviality, said: “We are pleased to have finalised terms for a potential acquisition of Central Convenience as it provides a clear opportunity to accelerate the growth and reach of the existing Conviviality Retail business, notably broadening our geographic footprint in the south and south west of England. The acquisition, if effected, will support our strategic goal to be the drinks and impulse sector’s leading independent distributor and we believe that potential exists for a range of synergies and increased returns for Conviviality’s shareholders. We look forward to welcoming colleagues from Central Convenience to the Conviviality Group.”

Domino’s announces £20m share repurchase programme: Domino’s Pizza Group has announced it will commence an irrevocable, discretionary programme to purchase up to £20m of the company’s ordinary shares of 25/48 pence each. The programme will run until 8 March 2018. The company stated: “The purpose of the programme is to reduce the company’s share capital and accordingly the company intends to cancel the ordinary shares purchased under the programme. Any purchases will be conducted in compliance with the relevant conditions for trading, restrictions regarding time and volume, disclosure and reporting obligations, and price conditions. The company confirms that it currently has no unpublished inside information. The programme will be conducted by the company in accordance with and under the terms of the general authority granted by the company’s shareholders at the company’s annual general meeting on 20 April 2017, which authority will expire at the end of the next annual general meeting of the company in 2018 or, if earlier, at the close of business on 20 July 2018. The aggregate maximum consideration payable by the company in respect of the purchase of shares under the programme up to 8 March 2018 is £20m. The maximum number of shares that may be purchased under the programme is 44,526,635 (being the number of shares able to be purchased under the 2017 authority, less shares purchased to date under the 2017 authority).”