Propel Morning Briefing Mast HeadAccess Banner  
Propel Morning Briefing Mast Head Paul's Twitter Link Paul's Twitter Link

Navitas Banner
Morning Briefing for pub, restaurant and food wervice operators

Thu 22nd Feb 2018 - Update: ALMR/BHA merger, Easyhotel fund-raise, Casual Dining winners, Byron closures
ALMR and BHA vote to merger to form UKHospitality: Overwhelming support from ALMR and BHA members yesterday triggered a merger and the creation of UKHospitality, a strong, united voice for the hospitality sector. UKHospitality will be the voice of a sector that generates £130bn revenue each year, providing an authoritative voice to over 700 member companies, operating 65,000 venues in a sector that employs 2.9 million people. The association will spearhead hospitality’s representation on the strategic, structural and regulatory issues it faces, campaigning for policies to help the sector achieve further growth as a key driver of the UK economy. Hospitality has faced myriad cost pressures in recent years which have severely impacted the sector, with 2017 restaurant insolvencies alone up by a fifth on the previous year. UKHospitality will ensure that the government has a full understanding of the social and economic impacts of policies such as the National Living Wage, business rates and Brexit on the third largest private sector employer in the UK. The new body has three clear objectives: firstly, creating a tax system which is fit for purpose, one which reflects the realities of business in the 21st century and allows a level playing field for traditional high street and community-based businesses which now compete with online companies; secondly, a regulatory regime which allows the hospitality sector to focus on growth rather than red tape; and finally, developing the hospitality workforce of the future. The board of UKHospitality will be led by Kate Nicholls, chief executive; Nick Varney of Merlin Entertainments, chairman; and Steve Richards of Casual Dining Group, deputy chairman. Ufi Ibrahim, chief executive of the British Hospitality Association, has decided to pursue other interests after eight successful years with the organisation. Commenting after the EGM votes, Kate Nicholls said: “The hospitality sector is at a critical point, with fantastic innovation, dynamism and enthusiasm across the industry, however this is being jeopardised by significant cost increases and red-tape. The incredible member support for creating UKHospitality demonstrates our ambition to reshape the future of an industry, which represents 10% of UK employment and generates £38bn of tax for the Exchequer. I look forward to working closely with all members to achieve our vision and to give a sector of huge economic, cultural and social importance the voice it deserves within government, and to deliver the much-needed policies that will support its strong growth trajectory.” Nick Varney said: “Today’s launch is a significant moment for our sector. The hospitality industry needs the right commercial environment in which to prosper. Our vibrant and dynamic sector has been overlooked in policy decisions over recent years, which has had a direct impact on jobs and value creation. I thank Ufi Ibrahim for her significant contribution to the BHA; as chief executive she reshaped and reformed the organisation from the ground up, raised its profile with government and championed many policy-shaping initiatives. The board and members wish her every success in her future ventures. I look forward to working closely with Kate Nicholls and the UKHospitality board, to enhance the development of the diverse and innovative hospitality sector in the UK.” Steve Richards added: “We are today reiterating our call for a dedicated Minister to represent an industry which is the third largest private sector employer in the UK; double the size of financial services and bigger than automotive, pharmaceuticals and aerospace combined. The sector’s tax contribution is as big as the defence budget, and warrants focused attention from government. Kate and the team have an ambitious plan to secure the future of our industry and will be actively engaging on behalf of the sector at home and abroad.”

Easyhotel raises £50m: Easyhotel has placed 45,454,546 new ordinary shares of 1.0 pence each at a price of 110p each to raise approximately £50 million – £48.8 million after expenses. Proceeds of the placing are to be primarily utilised to fund the acceleration of the Group’s owned hotel roll-out strategy. Chief executive Guy Parsons said: “The group has made excellent progress in line with its strategy to speed up owned hotel development and accelerate the roll-out of franchise hotels to drive returns on investment. The strong and ongoing market outperformance of our growing owned hotel portfolio has continued into the current financial year with RevPAR up 10.9% against their competitive set as measured by STR. The proceeds from today’s placing will enable us to continue the acceleration of our owned hotel development pipeline, allowing us to take advantage of the significant opportunities within our markets, delivering enhanced returns for our shareholders and underpinning the long-term growth of the Easyhotel brand.”

Casual Dining awards winners are named: The nation’s best casual dining restaurants and pubs were revealed tonight at the Casual Dining Restaurant & Pub Awards 2018, which took place at the Marriott London Grosvenor Square, following the first day of the Casual Dining show. Living Ventures, Wagamama, Bistrot Pierre, Brewhouse & Kitchen, Loungers, The Alchemist, Flat Iron, GBK, and The New World Trading Co (NWTC) were among the operators who took home awards. It was a memorable night for Living Ventures, which won three trophies including the newly introduced, and hotly-contested, Casual Dining Group of the Year Award. Its opulent Grand Pacific venue, in Manchester, also collected the ‘Best Designed Bar’ and ‘New Casual Dining Concept of the Year’ awards. Wagamama was also celebrating – defending and retaining its title of Large Multi-Site Restaurant Brand of the Year. Another second year in a row winner was The Malt House in London, which was named best Independent Pub of the Year once again. “We’re so honoured to scoop this award for the 2nd year. Last year’s win not only boosted our marketing campaign, it also had a terrific motivational impact on the whole team. A casual dining award in my sector, is the trophy we all want to win and I’m super proud of the guys at The Malt House in Fulham,” says Paul Merrett, chef-director at The Jolly Fine Pub Group. Chris Hill, chief executive of The New World Trading Co, received this year’s Trailblazer of the Year Award – the only category nominated directly by the judges. He said he was ‘humbled and stunned’ to win and dedicated the award to his incredible team. “NWTC is an exceptional company that does things a little differently and we have had amazing success to date. We have an exciting time ahead and I feel lucky to do what I do, with a team of incredible people around me. To be recognised in this way is testament to the ethos of all in NWTC and I can’t wait to share this success with them,” he said.

Byron begins closing sites: Bryon Hamburgers has begun closing restaurant, including three branches in London. This follows a company voluntary arrangement (CVA) which put 20 restaurants on the list for possible closure. Sites in Spitalfieds and Wandsworth closed on Sunday and one in Store Street, Bloomsbury, closed earlier this month. Two other London branches could be closed following crunch talks with landlords. These are in Hoxton Square and Westbourne Grove. Others around the rest of the UK have also been chopped, including Harrogate. A Deansgate branch in Manchester will close next month. “Byron’s core restaurant business and brand remain strong but the market that we operate in has changed profoundly,” said chief executive Simon Cope. “With the support of our new owners, our creditors, landlords and other business partners, I’m confident Byron will able to continue providing our customers with the best burger experience and grow a sustainable and innovative business for the long term.” Byron follows Jamie’s Italian, which closed 13 of its sites earlier this year. Earlier this week a branch of Jamie Oliver’s Barbecoa crashed into administration.

GMB says KFC winging it as council reveals crisis-hit chicken storage hub is not registered: The revelation that the cold storage hub at the centre of KFC’s chicken delivery problems has not yet been granted registration shows the shambles the company’s operations are in, the GMB union said today. Rugby Borough Council confirmed the cold storage facility used by DHL, which took over KFC deliveries last week, had not yet been registered. GMB has said the crisis that has engulfed KFC’s UK operations this week could have been avoided if warnings had been heeded months ago. The union wrote to the company in October warning over its decision to switch its deliveries from the food delivery specialists Bidvest Logistics to DHL. Mick Rix, GMB National Officer said: “It’s taken days to uncover the real truth about the shambles at this DHL hub that has plunged KFC’s supply chain into total chaos. They’ve been winging it. It’s clear that the left hand doesn’t know what the right hand’s doing in this operation. It’s the company’s colonels who need to be held to account for this mess, not the workers who have lost time and money through no fault of their own.”

Douglas Jack – Revolution results should be positive: Peel Hunt leisure analyst Douglas Jack has forecast that Revolution Bar Group should provide a positive start to results season when it reports on 2 March. In a note, he stated: “The positivity relates to like-for-like sales, but we expect PBT to be down slightly due to New Year’s Eve falling in H2 (with an impact equivalent to £0.5m, or 10% of H1 Ebit) and a higher depreciation charge. Like-for-like sales rose by 1.9% over the 27 weeks to 6 January, and by 5.9% over the four weeks to 31 December. Thus, like-for-like sales recovered to 3.1% in Q2, as measured by the 14 weeks to 6 January, a material improvement on Q1’s 0.3%, which we believe was affected by slower trade in Manchester after the terrorist attacks and takeover distractions. Positive influences on Q2 trading were efforts to drive pre-bookings and strong trading in the wet-led/late night market, which more than offset the impact of inclement weather in December. At present, the biggest influence on trading in the sector is supply and competition; the bar market has benefited from 10% supply reduction over the last ten years. This year, New Year’s Eve falls in the second half of the financial year, hence the like-for-like figures above are based on the period to 6 January. Without New Year’s Eve, reported like-for-like sales for the 26-week H1 period and Q2 are up 0.4% and 0.6%, respectively. Thus, we estimate New Year’s Eve is worth £1.2m in sales (£0.5m in profit). We would have forecast Ebitda of £9.7m for H1 2018 (vs £9.2m in H1 2017), but are forecasting flat Ebitda solely due to the timing of New Year’s Eve. We believe the company is on track to achieve at least £1m of cost savings, but with only a quarter of this benefit occurring in 2018E, and the other three-quarters in 2019E. This reflects the takeover approach in H1. We expect to hold our full-year forecasts (PBT £10.1m; consensus £9.7m), which anticipate like-for-like sales rising by 1%, margins falling by 20bps, six sites opening, and net debt increasing by £2m to £7.5m (of which £2.5m should be exceptional one-off costs). Expansion should be on track, following the opening of one site in July and three in December. RBG is currently valued at 5.6x EV/Ebitda, well below the 7.3x multiple on which the company floated. Lower supply and competition has transformed some Leisure sub-sectors, and although the bar market has not benefited from supply reduction as much as clubs and wet-led pubs, it is still a beneficiary, and we believe this should eventually be reflected in RBG’s valuation.”

Return to Archive Click Here to Return to the Archive Listing
Punch Taverns Link
Return to Archive Click Here to Return to the Archive Listing
Propel Premium
Jameson Banner
Co-Kitchens Banner
HDI Banner
Meaningful Vision Banner
Ponte Banner
Lamb Weston Banner
Unilever Banner
Unilever Banner
Santa Maria Banner
Contract Furniture Group Banner
Tofoo Pro Banner
Propel Banner
Venners Banner
Wireless Social Banner
Payments Managed Banner
Deliverect Banner
Hospitality Rising Banner
Cynergy Bank Banner
John Gaunt Banner
HGEM Banner
Zonal Banners
Access Banner
Purple Story Banner
Propel Banner
Christie & Co Banner
Beyond the Bean – Zuma Banner
CACI Banner
Sector Banner
Airship – Toggle Banner
COREcruitment Banner
Tofoo Pro Banner