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Fri 11th Jan 2019 - Ei Group sells 370 pubs to investment fund
Ei Group sells 370 pubs to investment fund: Ei Group has entered into sale agreements, subject to shareholder approval, with Tavern Propco Limited in relation to 370 properties comprising public houses and other commercial properties for expected gross aggregate cash consideration of £348 million. Tavern Propco Limited is a newly incorporated private company, which is owned, through intermediate holding companies, by investment funds managed and/or advised by Davidson Kempner Capital Management LP. The company stated: “The disposal of the portfolio, which comprises a significant proportion of the current Ei Commercial Properties division (FY 2018: 412 properties), represents a successful outcome of the previously announced sale process designed to optimise value from this part of the group. The group’s strategy in recent years to grow the income and quality of the Commercial Properties portfolio has resulted in what the board believes to be an attractive valuation for the portfolio. The portfolio is being sold on a debt free basis for expected gross aggregate cash consideration of £348 million, subject to customary rent apportionment mechanics at completion. The purchaser has paid Ei Group a deposit of £33.66 million, which is non-refundable unless shareholders do not approve the disposal. The sale value represents a 13 times multiple of earnings and is in line with the net book value of the assets, reinforcing the board’s confidence in the robustness of the net asset value of the group. A significant proportion of the disposal proceeds will be used to reduce the level of the group’s outstanding debt, accelerating the delivery of the group’s medium-term target leverage ratio of 6x net debt to Ebitda. Along with the accelerated debt reduction, the disposal provides the board with the opportunity to consider more immediate returns to shareholders. The disposal also allows the group flexibility to invest in driving growth in its core Publican Partnerships, Managed Operations and Managed Investments divisions, whilst at the same time identifying properties to rebuild its Commercial Properties division.” Simon Townsend, chief executive of Ei Group said: “We are very pleased to have agreed the sale of the portfolio, which is in line with our strategy of delivering attractive and sustainable returns to shareholders by unlocking the embedded value and optimising the returns from every asset within the business. The portfolio is comprised of high quality assets which we believe are best suited to a free-of-tie, rent-only business model. Throughout the sale process, we have been impressed with the commitment and speed of execution demonstrated by Davidson Kempner, a global institutional investment management firm with over US $31 billion in assets under management and a long track record of investing in real estate.” Rothschild & Co acted as sole financial adviser to Ei Group on the disposal.

Patisserie Valerie admits supplier payment delays: Patisserie Valerie, the brand rescued by its chairman Luke Johnson last year with a cash injection, has admitted that there were delays and other problems with supplier payments. “It was identified that there were many creditors with a large backlog of unpaid invoices,” said interim chief financial officer Nick Perrin in a letter to Rachel Reeves, the chair of the Business, Energy and Industrial Strategy select committee. The company discovered a £40m black-hole in its finances last October amid significant “and possibly fraudulent” accounting irregularities. “Significant funds were injected into the business to enable the group to bring payments up to date,” he added. The letter came in response to questions from Ms Reeve’s committee about payment practices prior to the company’s near-collapse. Several suppliers have complained about late payments, with some resorting to legal action to secure payment. In addition, it emerged in October that HM Revenue and Customs had issued a winding up petition against Stonebeach, the group’s main operating subsidiary. The petition was subsequently dismissed. Perrin said he could not explain why the previous management team did not publish reports on payment practices, but added that standard payment terms were 45 days. The longest payment term agreed with any supplier was 60 days, he said. Since October, the previous chief executive Paul May and finance director Chris Marsh have both left the business, with turn-around specialist Steve Francis installed as chief executive. However, shares in parent company Patisserie Holdings remain suspended and investigations into the company and individuals by the Serious Fraud Office and the Financial Reporting Council continue. In the letter, Perrin added: “The group recognises its responsibilities to suppliers and is determined to correct the historical position. This is a complex and time-consuming task. We are gradually ensuring that overdue payments are made and that terms agreed with suppliers are adhered to, but there remains much to do to complete this task.” He added payment processes are returning to normal, though he said it would be around six months before the firm’s payments data is in order.

The Times – FCA likely to scrutinize share trading at Brighton Pier Group: The Times has reported the Financial Conduct Authority is likely to take a look at share trading at Brighton Pier Group ahead of yesterday’s profit warning, which prompted shares to drop by 62% in early trading. The newspaper stated: “City watchdog is expected to scrutinise share trades at Brighton Pier Group after a 14% fall in the stock price in the two days before yesterday’s profit warning. An investigation by the Financial Conduct Authority would be embarrassing for him, given that Patisserie Holdings, where Mr Johnson is also chairman, is at the centre of investigations by the Serious Fraud Office and Financial Reporting Council over a £40 million hole in its finances. The FCA’s suspicions may be aroused by the fall in Brighton Pier’s share price from 71½p to 63p over Tuesday and Wednesday. Volumes in the lightly traded stock were also abnormal, with 10,000 shares traded on Tuesday and 55,547 the day after, well above the average of 7,690. The shares closed 14p worse off yesterday at 49p, a fall of 22.2%, cutting the value of Johnson’s 27% stake in the pier and bar operator by £1.4 million.”

Mowgli reveals opening date for second Manchester restaurant: Indian street food restaurant Mowgli, has announced the opening date for its second Manchester restaurant. Its University Green site situated on Oxford Road will open 21 January 2019. The 3,294 square foot, 100 cover restaurant will be open seven days a week. University Green is the new retail and leisure destination on Oxford Road developed in a partnership between leading property company Bruntwood and the University of Manchester. University Green is part of the vibrant growth area within the Oxford Road Corridor neighbourhood of Manchester. It’s an area lined with universities, museums and galleries and is a centre for innovation and learning. Popular local hangouts include cultural institutions like the Whitworth Art Gallery, Manchester Museum, Manchester Academy, Hatch and the Deaf Institute. Founder of Mowgli, Nisha Katona, who has just received an MBE in the 2019 New Year’s Honours list, said: “Mowgli is all about the smash and grab of fresh, light Indian food. This makes it perfect brain food for the exacting appetites of the university students and staff. I have loved designing this Mowgli: light, airy, twinkling and organic. In my mind, I want Apple shop meets Indian night market. From a design aspect, it’s my aim to create a home from home in the restaurants. I meticulously design every Mowgli inspired by the broken-down temple behind my Grandmother’s Varanasi home. I have such vivid memories of these vine covered temples behind her house. Wild monkeys roam free there, so the iconic monkey for me is a symbol of my childhood and the food heritage of which I am totally obsessed. The monkey climbing the brick wall, the endless twines and vines and chaos. It is around these elements that I design every site. It’s not grand or plush but its honestly home.”

Blind Tiger Inns to add two sites as it celebrates second anniversary: Blind Tiger Inns, the north-west wet-led operator led by Chris Tulloch, plan to open two more sites, to add to its existing 13-strong estate, before the end of February – the company is celebrating its second anniversary on Sunday (13 January) A spokesman said: “2018, Blind Tigers second year of trading, saw net sales of over £5m across their 13 strong estate, up from £3.8m in 2017. Christmas and New Year fortnight saw like for likes ahead by some 22.6%, with year on year being ahead 37% (with one additional venue). The catalyst for the increase has been via quality refurbishments throughout the year, and a significant increase in investment in both entertainment and marketing. 2019 is looking to continue momentum with two new sites scheduled to open before the end of February. The sites include one in Stockport and the first city centre venue for Blind Tiger in Liverpool. The bonus structure paid to pub mangers has been doubled for 2019, as has the marketing budget. We have 15 pubs, all recently refurbished and are focusing on driving all the venues and rewarding our teams for doing so.”

Propel launches Leadership Summit, open for bookings: Propel is launching the Leadership Summit, which will see a select group of the sector’s most experienced bosses share their expertise on leadership. The full-day event, in partnership with Elliotts, will take place on Tuesday, 12 February at One Moorgate Place and is open for bookings. Speakers will include Will Stratton-Morris, UK chief executive of Caffe Nero, who will talk about building high-performance teams. Alasdair Murdoch, chief executive of Burger King, speaks about the role of leadership in business turnarounds. Elliotts chief executive Ann Elliott will talk to Des Gunewardena, chief executive of D&D London, about the lessons of leadership he has picked up in his career in the sector. Duncan Garrood, chief executive of Ten Entertainment, will give his views on leadership and the customer experience, while Jo Fleet, managing director of Flat Iron, will talk about empowering people and trust and getting the team to “buy in” through clear communication and vision. Mark Jones, chief executive of Carluccio’s, will explain how the company is building the quality and skillsets of its general managers to lead the business out of decline. Simon Townsend, chief executive of Ei Group, will give his views on the challenges of leadership during a period of immense change and Zoe Bowley, managing director of PizzaExpress, will give her top ten tips on leadership. Meanwhile, Loungers founder Alex Reilley will talk about the adaptations involved in growing a business from one site to more than 100, celebrating success and the art of succession, while Ann Elliott will give her views on the power of mentoring to grow talent in organisations. Propel managing director Paul Charity said: “With the industry facing such challenging times, effective leadership has never been more important. This is an unmissable opportunity to learn from high-profile leaders in our sector.” Prices are £295 plus VAT for Premium members, £345 plus VAT for operators and £445 plus VAT for suppliers. To book, email

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