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Morning Briefing for pub, restaurant and food wervice operators

Thu 7th Jun 2018 - Propel Thursday News Briefing

Story of the Day:

CAMRA sees slight income increase, membership up 3.0%: The Campaign for Real Ale (CAMRA) saw income increase slightly to £13,966,528 for the year ending 31 December 2017, compared with £13,940,948 the year before. Total reserves increased to £3,430,969 compared with £3,266,872, according to accounts filed at Companies House. By the end of 2017, CAMRA had increased its membership by 3% to 190,359 members. It stated: “Total income has increased only slightly (£14.0m, up 0.2%) as a rise in subscription income to £3.0m (2016: £2.9m) was negated by a small reduction in income from festivals to £9.6m (2016: £9.7m). Publishing, advertising and other trading income remained steady at about £1.3m. The increased membership income and a reduction in supporting costs were the main reasons for the increased contribution to £3.2m (2016: £2.9m). Campaign costs reduced year-on-year to £1.3m (2016: £1.5m) and administration costs also fell to £1.9m (2016: £2.1m); part of a more comprehensive programme of cuts implemented to maintain a balance of income and expenditure through the year. There was no repeat of the exceptionally large legacy of 2016 so other operating income was negligible (2016: £0.5m). The combination of lower costs and higher income resulted in an operating surplus of £0.1m (2016: deficit of £0.3m). Together with investments gains and income of £0.1m (2016: £0.1m), this contributed to an increase in reserves of £0.2m (2016: reduction of £0.1 m). At the end of the financial year the campaign held reserves of £3.4m (2016: £3.3m), with the increase resulting from the surplus in the year. Net assets included tangible and intangible assets of £0.9m (2016: £0.9m), fixed-asset investments of £1.7m (2016: £2.5m) and net current assets of £1.2m (2016: £0.1m). The movement in fixed-asset investments and net current assets was the result of the redeployment of a portion of the proceeds from the sale equity fund holdings in money market funds held as cash equivalents. During the year, the campaign incurred £0.2m capital expenditure (2016: 0.4m)." Last week, CAMRA chief executive Tim Page announced he was leaving after three-and-a-half years in the role.

Industry News:

Propel summer conference and party open for bookings, more than 250 people confirmed: More than 250 people are now booked for this year’s Propel summer conference and party – operators can claim up to two free places. The event takes place on Thursday, 5 July at The Oxford Belfry. This year we have the usual great conference followed by crazy golf at Junkyard Golf in Oxford plus a barbecue and live band karaoke back at the hotel. The speaker line-up is Matt Coles, of Morar HPI’s food and drinks team; Peter Edwards, chief operating officer of Zonal; sector consultant James Hacon; Martin Morales, restaurateur, chef and entrepreneur known as the pioneer of Peruvian food; Angela Malik, board member of the London Food Board; Gavin George, chief executive of Laine Pub Company; Matthew Kirby, chief executive of Chozen Noodle; David Abrahamovitch, founder of genre-busting Grind; Andreas Karlsson, group chief operating officer of Sticks ‘n’ Sushi; Simon Mitchell, managing director of Kerb; James Baer, managing director of Amber Taverns; and HGEM insight manager Rich New and lead client manager Jason Horn. Operators can claim up to two free places by emailing or calling her on 01444 817691.

Manchester appoints first night-time economy advisor: Sacha Lord, head of Parklife festival and The Warehouse Project, has been appointed Manchester’s first night-time economy advisor by mayor Andy Burnham. The role has been developed to ensure a “robust and consistent approach to ensuring the region is a leader in world-class entertainment”. Lord is also on the board of the Night Time Industries Association (NTIA). Chairman Alan D Miller said: “This is a historic moment. Manchester, which has given so much to the world culturally, now has an ambassador who will help the city and region to flourish even further.” Lord added: “I’m looking forward to getting to work and helping to build on Greater Manchester’s night-time economy.”

BII reveals 2018 Licensee of the Year winner: Alex and Tanya Williams, who run the Polgooth Inn in St Austell, Cornwall, have won the 2018 British Institute of Innkeeping (BII) Licensee of the Year award. The accolade recognises the country’s top-performing licensee with a passion for the trade and is regarded as the industry’s most coveted award. The couple fought their way through three rounds to wow the judges in the final after displaying excellent knowledge and experience in three areas – business development, people and training, and financial awareness. They picked up the award at the BII summer event at the HAC in the City of London on Tuesday (5 June). Tanya Williams said: “It’s slightly surreal and feels amazing. The competition process was tough so you have to believe in what you are doing.” BII chief executive Mike Clist added: “This is a tough competition to win but it was clear to the judges the Williams had the dedication and passion deserving of Licensee of the Year winners. I’d also like to congratulate our other finalists for getting this far and being such fantastic candidates. It was a tough decision as they all brought something unique to the competition!” The Williams will receive a year’s free pubs and clubs subscription to Sky Sports, a study trip to Amsterdam courtesy of Heineken and honorary lifetime membership of the BII.

Former QHotels executive team to launch hospitality management business: The former executive team of Leeds-based QHotels is to launch a hospitality management business. Co-founders Michael Purtill and Ian Goulding will launch Inspiring Hospitality Management (IHM) alongside the rest of the management team – Vivien Sirotkin, Chris Gaines and Nichola Roskell. They left QHotels at the end of last year following the completion of Aprirose’s £525m acquisition of the business from Bain Capital Credit and Canyon Partners. Purtill told Insider Media: “The IHM partners have run several successful UK hospitality businesses and in total operated more than 40 hotels and resorts and always outperformed the market place in terms of Ebitda per available room. We’ve already received a number of approaches for our support and through IHM we will provide guidance, advice and bespoke management services to investors, owners and operators.” Bain Capital Credit managing director Brad Palmer added: “The great success of Bain Capital’s investment in QHotels is attributable to the capability of this management team.”

Empire gets go-ahead to create space for six restaurants at Birmingham site: Empire Cinemas, the UK’s largest independently owned cinema operator, has had plans approved to create space for six restaurants at its site in south Birmingham. Empire lodged plans for its site in Great Park, Rubery, in October to add a three-storey extension to the front of the cinema creating a suite of commercial units for restaurant use comprising roughly 19,000 square feet. A statement lodged by NTR Planning on behalf of Empire Cinemas said: “The restaurants are proposed to enhance the visitor experience for those visiting the cinema with a large majority of restaurant patrons expected to enjoy pre or post-cinema meals.” Birmingham City Council planners told Insider Media the scheme represented a “good design within a non-designated local centre, improving the services available”. Other operators in Great Park include Hollywood Bowl, the UK’s largest tenpin bowling operator, and Whitbread-owned Premier Inn.

Licensing update: Licensing solicitor John Gaunt & Partners produces a useful monthly summary of topical issues. To access the latest, click here 

Company News:

Brasserie Bar Co to make board changes: Mark Derry is to take over as executive chairman at Brasserie Bar Co, the pub and restaurant company with the Brasserie Blanc and White Brasserie brands. Derry, who is chief executive of the business, will succeed Ian Edward, who will continue as a retained advisor. Edward’s other board roles in the sector include Hippo Inns, Pizza Pilgrims and Seafood Pub Company. Brasserie Bar Co has 19 French brasseries and 17 pub brasseries around the UK. 

Charles Wells makes Oxford debut with sixth Pizza, Pots & Pints site, second venue in city to follow: Bedford-based brewer and retailer Charles Wells has continued the expansion of its Pizza, Pots & Pints managed pub concept by opening a sixth site, in Oxford. The Oxford Blue, a 2,200 square foot, Ei Group-owned pub in Marston Street, has undergone an extensive refurbishment and offers 85 covers inside and out. It is Charles Wells’ first site within Oxford, with plans being finalised for a second Pizza, Pots & Pints pub across the city to open later in the year. Charles Wells operations director Benjamin Smith said: “The Oxford Blue is a welcome addition to the portfolio and it is great to see this well-known and locally loved pub reopen with a contemporary new look, helping us to establish the Charles Wells name in Oxford.” Chief executive Justin Phillimore added: “The Pizza, Pots & Pints format is a key part of the Charles Wells growth strategy over the next three years. We are actively looking for individual sites as well as smaller, regionally based multiples to expand this portfolio. Major towns and cities within 70 miles of Bedford and where we currently don’t have a strong presence, such as Oxford, are top of our list. Our ambition is to have 25 Pizza, Pots & Pints sites in the next three years.” The concept was launched in 2015 at The Salisbury Arms in Cambridge, rolling out to Peterborough, Baldock and Hitchin followed by a second site in Cambridge. It offers a community-style pub with freshly made pizza, terracotta one-pot meals and Charles Wells beer. The company is due to open its new brewery in Bedford next year.

Pret A Manger’s brand perception rises after staff bonus announcement: Pret A Manger’s decision to give staff a £1,000 bonus following the company’s £1.5bn sale to JAB Holdings has given its brand perception a shot in the arm. YouGov figures showed the move has led to Pret’s attention score, which measures whether people have heard anything about the brand, rising from three to 12 in the past week. Pret’s impression score (whether a member of the public has a positive impression of the brand) jumped from 17 during the week the news was announced to a peak of 26 on Friday (1 June). Meanwhile, its reputation score (whether someone would be proud to work for a brand) increased from ten to 15 and its consideration score (whether someone would consider purchasing from a brand) rose from 14 to 23. YouGov data showed Pret’s current customers are more likely than the average (46% versus 37%) to say they only buy from companies who have ethics and values they agree with. YouGov co-founder Stephan Shakespeare told City AM: “YouGov data has often recorded how brands being known for positive staff relations can contribute to a jump in perception and purchase consideration.”

Provenance Inns reports increased losses as turnover falls 3.3%: Provenance Inns has reported turnover fell 3.3% to £4,487,772 for the year ending 27 August 2017, compared with £4,640,351 the previous year. The company saw pre-tax losses increase to £560,995 compared with a loss of £476,302 the year before, according to accounts filed at Companies House. At the end of the period the company operated five country inns in North Yorkshire, two with rooms, while it also has an 11-bedroom lodge operated under a management contract. In their report accompanying the accounts, the directors stated: “The markets in which the inns operate have experienced ever more competition. Gross profit, however, fell 4.7% to 35.4%. Discounting was used to ensure sales at key operating times as well as an increased use of third parties. This, coupled with growing cost price inflation, has had a detrimental effect on gross profit. Operating profit fell from £112,285 to a loss of £5,028. The long-term ambition to grow the overall business and ensure stability of staff has resulted in an increased head office function as well as a more skilled and therefore more costly payroll. The benefits of this investment will be seen in the following years’ performance. Overall margin improvement as a result of better buying terms will be achieved in the coming year. Labour cost reduction is also expected and will be achieved despite increases in the National Living Wage.” Provenance Inns was founded in 2010 by former Morrisons director Chris Blundell and Michael Ibbotson, who stepped down as managing director last year.

Brewhouse & Kitchen reveals further details of Hoxton opening: Brewhouse & Kitchen, the brewpub business led by Kris Gumbrell and Simon Bunn, has revealed further details of The Beagle in Hoxton, east London, which will open next month as the company’s 21st site. The site housed former restaurant, cafe and bar The Beagle and is in a high-footfall area next to the newly developed Hoxton train station. The site was created from a shell six years ago and is set across three areas designated by brick archways. Brewhouse & Kitchen said it only planned to “slightly refurbish” the property as it was fitted-out quite recently. Gumbrell said: “This iconic location, set in the railway arches next to Hoxton overground, is a unique opportunity and a great fit with our brewpubs at Highbury and Angel. We’re looking forward to welcoming local businesses and punters to what will be a stunning site in an equally special location.” Stewart Harkness, associate director – pubs and restaurants at Christie & Co, which brokered the deal, added: “As soon as I visited the site, I believed it would be a perfect fit not only for Brewhouse & Kitchen but also the great following The Beagle operators have established.” Last month, Brewhouse & Kitchen exchanged contracts to buy the freehold of Wabi restaurant in Horsham, which will be its first site in West Sussex. The company told Propel it was also in legals on two further venues. 

Singapore curry puff brand Old Chang Kee opens first UK site, in Covent Garden: Curry puff brand Old Chang Kee, which operates almost 80 sites in Singapore, has launched its first restaurant in the UK. Following the popularity of a pop-up in Kentish Town, the company has opened a restaurant in New Row, Covent Garden, offering signature puffs alongside curry and laksa. The curry puff was reputedly invented when chefs working during Singapore’s colonial era combined Cornish pasties with local spices. The puffs in London include flavours such as Singapore chilli crab and curry potato, alongside chicken curry and finger food. The 300 square foot space offers mainly grab-and-go options with interiors resembling an old-style Asian coffee shop to give Londoners a taste of the history of the brand, which opened its first site in 1956. Old Chang Kee began as a street food stall outside a cinema, with its restaurants now selling more than 35,000 curry puffs a day. UK director Sandra Leong told Hot Dinners: “Our curry puffs have a rich heritage as early fusion food. We are thrilled to bring them back to Britain along with the very best of our snacks and meals.”

Former Crussh managing director Chris Fung joins work delivery platform Feedr as investor and adviser: Former Crussh managing director Chris Fung has joined London-based healthy food at work delivery platform Feedr as an investor and adviser. The company is running a £450,000 fund-raise on crowdfunding platform Crowdcube for expansion offering 13.85% equity in return for investment. So far, 122 investors have pledged £196,760 with 22 days remaining. Feedr’s vendors include Gail’s Bakery, Deliciously Ella, Detox Kitchen and Farmstand and it has served 40,000 meals since its launch in 2016 with 300% revenue growth in the past 12 months. Fung said: “Feedr is an exciting business that is much more than another office delivery service. It’s got the potential to disrupt the office catering space as well as improve access to often hard-to-find, independent vendors in a way that hasn’t been done before. Too often other providers have a model in which the platform wins at the expense of vendors and/or customers. Feedr strikes a successful and sustainable partnership between all parties while delivering what the customer wants.” Co-founder and chief operating officer Lyz Swanton added: “Given Chris’ depth of knowledge and experience in the industry, we’re thrilled to be working with him.”

Thatchers reports profits boost as turnover soars past £85m: Somerset cider-maker Thatchers has reported a profit boost as turnover soared past the £85m mark. The company saw turnover increase 17.7% to £86,280,348 for the year ending 31 August 2017, compared with £73,252,850 the year before. Pre-tax profit was up to £3,568,302 compared with £2,240,406 the previous year, according to accounts filed with Companies House. Thatchers invested £9m in its production facility during the year. In his report accompanying the accounts, managing director Martin Thatcher said: “While the underlying apple cider industry was in decline, the growth of Thatchers’ range of ciders again outperformed the market and effectively gained further overall market share. The directors believe the group is well positioned to continue to grow the company on all measures. The group continues with its established programme of investment in plant and machinery in line with its strategic plan. During the year a further £9m was invested in the production facility. The strategic direction of the group is continuously assessed by the directors to ensure it remains aligned with changing market and consumer expectations. The group prides itself on being able to develop new, innovative products while maintaining Thatchers’ reputation for quality premium cider. The directors believe the group has established a strong market position and intend to continue to reinforce the group’s standing across all routes to market.”

Freehold of Cheshire restaurant operated by Pesto goes on market for £775,000: The freehold of a restaurant operated by Pesto in Tarporley, Cheshire, has been put up for sale for a guide price in excess of £775,000, reflecting a net initial yield of 6.85%. Pesto At Cabbage Hall currently operates from the property and neither the business nor its lease will be affected by the sale, which is being handled by Savills. Located in Forest Road in Little Budworth, the property sits on a 4.7-acre site and features ground-floor restaurant space, first-floor managers’ accommodation and a garden with customer seating. Pesto At Cabbage Hall is part of Pesto, which focuses on Italian food in a pub setting and has ten sites in the Midlands and north of England. The operator occupies the property on a lease expiring in 2035 at an annual rent of £56,000. Savills director Tom Cunningham said: “This is an excellent opportunity to acquire an attractive restaurant investment with strong underlying property values. Pesto At Cabbage Hall has successfully traded for a number of years and will not be impacted by the sale.”

Beer and skateboard brand hits £150,000 crowdfunding target on final day to create London HQ: Beer and skateboard brand Hop King Brewery has hit its £150,000 target on crowdfunding platform Crowdcube on the campaign’s final day to create London headquarters “with a difference”. Founders Ben and Ludi Hopkinson were offering an 8.57% equity stake in return for investment. The pitch stated: “We knew Hop King needed to stand for much more than just good beer, which is why Hop King is also a skateboard brand. We wanted to create a brand that, before anything, was cool! We have designed and produced a clothing range, skateboard decks, and have an official Hop King skate team with three pros and four amateurs. The beer and skateboard elements act as USPs for each other and we hope this alignment will give the beer the edge required in such a competitive market place as well as provide great content for a social media-focused business. We want to create a London headquarters with a difference – The Hop Kingdom – a warehouse, office, taproom, skate park and events space that will be a hub of awesomeness.” 

Hotel Chocolat to open shop+cafe in Derby next month: Hotel Chocolat is to launch a shop+cafe in Derby next month. The 1,797 square foot venue will open at Intu Derby shopping centre offering the brand’s full range of chocolate and cocoa cuisine and a cafe that will feature its “Ice Cream of the Gods” and a selection of cocoa-based drinks. Hotel Chocolat co-founder Peter Harris said: “We are thrilled to be expanding our portfolio with the launch of our first cafe store in Derby. Ideally placed in the heart of the city, it promises to offer customers visiting Intu Derby the perfect retreat.” Intu regional managing director Nick Round added: “Hotel Chocolat is one of the top brands requested by Derby shoppers. The luxury retailer complements the centre’s rapidly growing mix of aspirational brands.” Earlier this week, Hotel Chocolat Group announced the repayment of £6.4m of debt borrowed from its customers in the form of “chocolate bonds”.

Covent Garden zero-waste restaurant Native reopens in Flat Iron Square: Zero-waste wild British food restaurant Native, which closed its site in Covent Garden last month after planning permission was declined, has reopened in Flat Iron Square, near London Bridge. The new site has twice the capacity of its Covent Garden spot, with room for a dedicated bar. The food and drink menus will both change seasonally, with the a la carte menu currently featuring dishes such as deer with caramelised cauliflower, carrots and salsa verde, while the tasting menu includes Dorset mackerel and Kent apples with camomile cream, smoked caramel and pistachio. The restaurant’s website states: “Native looks to provide its guests with an original dining experience that encapsulates the country’s best wild food through a combination of innovative cooking and country thrift.”

Ei Group moves trade show to support publicans’ festive trading: Ei Publican Partnerships, the leased and tenanted business of Ei Group, is to move next year’s EiLive – its annual series of nationwide trade shows – from spring to autumn to provide support and guidance for publicans ahead of the Halloween, Bonfire Night and Christmas trading periods. Ei Publican Partnerships managing director Nick Light said: “We’re constantly striving to find new ways to support and develop publicans across our estate. A big part of this involves scrutinising every aspect of what we do and, as such, we have taken the decision to move the date of EiLive so publicans can capitalise on deals and ideas ahead of the busy Christmas period.”

Devon pub housed in Domesday Book building brought to market: One of Britain’s “oldest surviving” pubs, housed in a building that appeared in the Domesday Book, has been brought to market. The Cridford Inn is in a former farm building that dates to 825, with the site remodelled in 1081. The pub is in the village of Trusham in Devon with offers of £10,000 invited. The thatched pub features exposed stone walls and slate floors throughout. The ground floor offers a lounge bar, restaurant and function room, while the first floor contains four en-suite bedrooms. There is also a car park, seating for 50 on a slated terrace and a stream-side beer garden. Jon Clyne, director of agents Charles Darrow, which is handling the sale, said: “Our clients purchased The Cridford to preserve the pub for the village and, having heavily invested in many aspects of the building, are now keen to step away and concentrate on other business interests in the trade. They are open to proposals on a tenancy, lease or would consider a straight freehold sale.”

English wine in a can concept The Uncommon launches fund-raise to establish London winery: English wine in a can concept The Uncommon has launched a crowdfunding campaign to establish its own winery and canning line in south east London. The concept was founded by Henry Connell and Alex Thraves and offers the UK’s first English wine in a can – a sparkling dry white produced in Surrey, 20 miles from the company’s current Peckham headquarters. The campaign has launched on crowdfunding campaign IndieGoGo with the company looking to raise £25,000, which would also go towards launching other varieties of wine and opening a bar at the new site. Investors are guaranteed discounted perks. The pitch states: “Having seen the success of canned wine across the New World, in particular the US, we saw a real opportunity to do the same in England. We quit our jobs to make our dream a reality and 18 months later we are the first to can wine in the UK. We are sold online and nationwide at Selfridges and have partnered with some of the coolest hotels, venues and festival brands. We are very proud of our achievements but more excited about our growth.”

Amber Beverage Group increases Cellar Trends holding to 70%: SPI Global’s Baltic business arm, the Amber Beverage Group, has increased its holding in drinks distributor Cellar Trends to 70%. The Marriott and Watts families will continue to hold the remaining shares, with no changes to management. Joint chief executives Martin Watts and David Marriot called the move a “welcome evolution of Cellar Trends’ relationship with Amber Beverage Group”. They told Insider Media: “It provides a stable base for the continuation with confidence of our successful work on behalf of all the brand owners whom we are proud to represent.” Cellar Trends’ portfolio includes Luxardo Sambuca and Faustino. Amber Beverage Group has been a shareholder since May 2017.

Serviced apartment company SACO to open £40m Locke site in Dalston: Serviced apartment company SACO, which is backed by Oaktree Capital, is to open a site for its Locke brand in Dalston, east London. The company will open the 121-room Kingsland Locke scheme in Kingsland Street. Real estate investment company Aprirose has acquired the site for the development of the £40m aparthotel, which is expected to be complete in April 2020. Aprirose has appointed SACO as development manager to oversee the build and operate the finished scheme under a management agreement. Comprising studio and one-bedroom units over five floors, the scheme will include a restaurant, cocktail bar, gym and a co-working space for 152 guests. Aprirose chief executive Manish Gudkatold told Hotel Owner: “The acquisition of the Kingsland Road site marks our first move into this exciting and growing sector. There is an undersupply of aparthotels in this part of London, making the Kingsland Locke development a strong addition to our real estate portfolio.” SACO acquisitions director Andrew Fowler added: “Our partnership with Aprirose on Kingsland Locke represents an exciting addition to the Locke family. Dalston is an ideal location. We look forward to working with Aprirose to deliver an experience that reflects the locality.”  

Starbucks doubles Intu Lakeside site after relocating unit: Starbucks has doubled the size of its site at Intu Lakeside to 2,000 square feet after relocating from the first floor to the ground floor of the Essex shopping centre. The company’s new store features a modern faceted design that will mirror the planned architecture of Intu Lakeside’s new leisure space when it opens next year. The 175,000 square foot extension at Intu Lakeside will feature 11 restaurants and leisure brands such as Nickelodeon’s, which will open its first UK shopping centre attraction; trampoline park operator Flip Out; and Hollywood Bowl, the UK’s largest tenpin bowling operator. Intu regional managing director Rebecca Ryman said: “It’s fantastic to see a global brand take inspiration from the design of our leisure development, which is proving to be a landmark in its own right. The new development will make Intu Lakeside the go-to place for customers wishing to have the full retail, leisure and dining experience from morning to night.”

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