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Fri 31st Aug 2018 - Update: Wetherspoon faces strike action, Restaurant Group, Aston Manor sale
JD Wetherspoon facing first strike by staff in company’s history: JD Wetherspoon is facing its first strike action by pub staff in the company’s history. The company has revealed the Bakers Food and Allied Workers Union (BFAWU) has given it notice of the intention to ballot for industrial action. It currently only affects two Wetherspoon pubs – the Bright Helm and the Post & Telegraph, which are both in Brighton, but there have been calls to turn this into wider action. BFAWU president Ian Hodson said: “Workers at JD Wetherspoon do a hard job. They work long, often anti-social, hours ensuring customers can enjoy their food and drink. JD Wetherspoon depends on its workers to make its large profits; the least those workers deserve is a living wage of £10 an hour to ensure they can afford the basic things in life.” Wetherspoon spokesman Eddie Gershon said: “We can confirm Wetherspoon has received notice the BFAWU intends to hold a ballot for industrial action in two Wetherspoon pubs in Brighton – the Bright Helm and the Post & Telegraph. No complaint has been made directly to the company by employees at either pub, or by the trade union, in advance of receiving this ballot. We have reviewed the rates of pay in both pubs. The minimum starting rate for bar associates (aged above 18 years) is £8.05 per hour and for kitchen associates (aged above 18 years) it is £8.25. These rates increase to £8.15 (bar) and £8.35 (kitchen) after completing their probation period. These are the minimum rates employees receive, and those with longer service receive higher amounts than this. The rates are above the minimum wage. In addition, on average, employees at the Bright Helm received an additional 3.4% in bonus pay over the past 12 months and employees at the Post & Telegraph received an additional 6.5% in bonus pay. Employees with more than 18 months service with the company are entitled to receive free shares in the company each year, equivalent to 5% of their gross earnings, at no cost to themselves. In addition, employees receive a 50% discount on food and drink while at work, and a 20% discount off duty including food, drink and hotel accommodation for themselves and guests. We are keen to provide good working conditions for all employees. We are disappointed we were not approached directly by these employees but, as always, we are keen to listen to what the people in our pubs have to say.”

Goodbody – we have increased confidence in The Restaurant Group: Goodbody leisure analyst Paul Ruddy has said he has “increased confidence” in The Restaurant Group. Ruddy said: “Chief executive Andy McCue noted trading was resilient in the first half despite the well-flagged weather effects but the group is executing well in accelerating growth in pubs and concessions. Importantly he highlighted the group is now balanced between the leisure business and the concessions and pub business. The group has seen improving like-for-likes through this year capped off by the 2.4% like-for-like rise in the most recent six weeks of trading. Management highlighted ‘encouraging momentum’ in the leisure division with the group making progress across the consumer proposition. They noted The Restaurant Group is the only operator of scale to have access to all four of the major online delivery aggregators. In Frankie and Benny’s it has put through significant pricing cuts which have re-established the value credentials but the re-invigoration of the kids menu and new healthier options also appear to be having a positive effect. The new FireJacks concept is trading well (five sites) although management would not be drawn on whether all Coast to Coasts would eventually be fully reformatted. In Chiquito initiatives such as the £1 taco Tuesday appear to be bearing fruit and this has been extended to Thursdays also. It has developed trials in delivery-only concepts such as Burger Burger. The pub estate continues to consistently outperform the market. It sees opportunities to expand organically and this growth has been boosted by the two acquisitions year to date and it sees further acquisition opportunity. It will open 21 pubs this year including acquisitions (four from Ribble Valley and the 11 Food & Fuel). It expects to open a further ten next year. Food & Fuel was acquired for £14.9m and is a leasehold estate of 11 prime London sites. The multiple was circa eight times trailing Ebitda (£1.9m) and expects the pubs to reach a run rate of £2.3m given there will be purchasing scale benefits. At year-end there will be 77 trading pubs. The concessions division performance looks to be stellar, with McCue noting it is outperforming the growth in airport passengers. There will be 17 concessions opening in FY18 and renewals of existing sites is impressive (85%). McCue also noted there is opportunity for international development here. It expects topline growth of 10% next year from the maturity of recent openings. We estimate there could be 70 to 75 concession sites at year-end (57 at FY17). The company is comfortable with the £18m cost guidance with 50% mitigation despite some recent spikes. It is very hard to predict where commodity prices will go but expects no upwards pressure on the £18m this year. Cost mitigation is coming from three areas – leveraging purchasing scale; labour scheduling; and renegotiating rent with landlords and rates with councils. The key disappointment was the £8.4m exceptional charge relating to property and onerous leases. The group announced in 2016 it would close 41 sites, of these 29 are now fully exited and 12 are closed, these sites were exited at more favourable rates so led to a £3.5m release. However, it now expects to close 12 sites this year and has impaired a further 12 sites due to trading conditions, which leads to a £12m charge across lease provisions and impairment of property and plant. Although this drag on statutory profits is disappointing management does appear to be making tough choices and trimming the underperforming tail of sites.”

French food group acquires Aston Manor for £100m: Birmingham-based cider-maker Aston Manor has been sold to French food group for close to £100m. The Ellis family, including former Aston Villa chairman Doug Ellis, his son and former chief executive Peter, and grandson and current chief financial officer James, has run the Birmingham business for 35 years. The UK’s largest independent cider maker was established in 1983, originally brewing beer before it started making cider in 1996. Today it only produces cider and exports to more than 20 countries, although the vast majority of its revenues come from UK sales of brands including Frosty Jack’s, Kingstone Press and Knights. Its most recent published accounts, for 2016, showed profits of £4m on annual sales of £113m. Chief executive Gordon Johncox, who is staying with the business along with James Ellis, said: “Aston Manor has been looking at strategic options and for a partner to continue the growth of the company and in doing so to broaden our offering. With Agrial we have found this partner, a strong group with a well-developed portfolio of products and a well-developed international platform.” Marc Roubaud, managing director of the drinks division of Agrial, added: “It was crucial for Agrial to assert its global ambitions on the cider market by gaining a foothold in the world’s largest cider market, close to our heartland and the orchards of our members.” Agrial is a French co-operative owned by its 13,000 member farmers and is France’s largest producer of cider. The £5bn-turnover group has 180 companies and subsidiaries in Europe, Africa and the United States. Aston Manor employs about 300 people across its production and packaging facilities in Birmingham and Devon, and orchards in Worcestershire and Herefordshire.

Thornbridge and Pivovar secure first two sites under new joint venture: Derbyshire-based Thornbridge Brewery and bar operator Pivovar have secured the first two sites under their new joint venture Thornbridge & Co. It have been granted permission by Birmingham City Council to convert a former branch of Lloyds Bank in Colmore Row into The Birmingham Tap. Due to open this autumn, the venue will be a “traditional take on the modern craft beer pub” with a food offer to complement. Thornbridge and Co has also secured a site in the centre of York, which is due to open by the end of this year. Moving into 2019, Thornbridge and Co is looking at sites in London, Manchester, Brighton and Leeds. Thornbridge Brewery chief executive Simon Webster said: “We are delighted to announce the Thornbridge and Co Birmingham site is close to opening and we have secured a second site in York. It’s really important to us to find sites that we feel fit with our brand and in which we can create fantastic pubs, bringing our beer to every part of the UK. Working alongside Pivovar has really helped us on this journey.” Jamie Hawksworth, owner and director of Pivovar, added: “It’s been a long time coming, which has allowed us to develop our bar design and identity. There’s now massive excitement to present our take on the perfect city pub and Birmingham, with its already amazing beer scene, is a fabulous place for our first site.” Thornbridge Brewery and Pivovar announced the joint venture in December last year with plans to open ten pub sites nationwide over the next five years.

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