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Morning Briefing for pub, restaurant and food wervice operators

Mon 2nd Dec 2019 - Propel Monday News Briefing

Story of the Day:

Oakman Inns to embark on £12m fund-raise to underpin further growth: Oakman Inns and Restaurants, the Peter Borg-Neal-led group, is set to embark on a new round of fund-raising, with a target of between £10m to £12m, as it looks to further expand its 24-strong estate, Propel has learned. It is thought the company is putting forward a suite of investment products to investors in the latest fund-raising round, which come with varying degrees of risk and return. Earlier this year, the company appointed Stephen Kenee as chief investment officer to focus on improving the efficiency of its funding as well as raising its growth capital. Speaking at the time, Borg-Neil said: “Our pace of growth and the difficult external environment have meant we have had to fund the business in an innovative but sometimes complex fashion. We now have a turnover of more than £40m and several more sites in the pipeline. We have worked closely with Steve over the past five years and have been continually impressed by his strategic ability, innovative thinking and grasp of detail.” The new fund-raise comes on the back of a strong trading performance from the business, which saw its sales break through the £40m-mark earlier this year. Last month, it reported like-for-like sales were up 5.1% for the 13 weeks to 29 September. As well as the appointment of Kenee, it has also strengthened its management team, with the appointments of Dermot King as chief operating officer and Michelle Farrell as sales and marketing director. The company is targeting opening a further four to six pubs over the coming year. The company has two sites awaiting development – in Wokingham and Buckingham – and has agreed deals on a further two sites.

Industry News:

Propel Premium members to receive ten days of exclusive videos from Multi Club Conference, ‘Black Friday’ offer: Propel Premium subscribers will receive a daily video for ten days starting on Wednesday (4 December) featuring sector operators speaking at the final Multi Club Conference of 2019. The videos feature a spectrum of company leaders sharing insights into their strategies and plans, while industry experts look at some of the key trends that are shaping the sector. Videos will include Christie & Co head of valuation Stephen Owens; Andrew Ball, of sector accountancy specialist haysmacintyre; Alison Vickers, owner of Auriac Associates and former business development director for YO!, who is working with Dum Dum Donuts, Island Poke, Barburrito and Black Sheep Coffee; Bibendum chief executive Michael Saunders; Ali Aneizi, founder of Tamweel; Lorraine Copes, head of procurement at Corbin & King; Ed Devenport, co-founder of Incipio Group; Loui Blake, managing director of the UK’s largest vegan restaurant Erpingham House and co-founder of Kalifornia Kitchen; Wagamama and Hakkasan founder Alan Yau; and Andy Lewis-Pratt, who launched Xscape and is now chief executive of Market Halls. Videos will send out each day at 5pm and 2pm on a Friday. Meanwhile, Propel Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out, discounts to attend Propel conferences and events, and regular columns from Propel insights editor Mark Wingett. They also receive access to our database of multi-site companies, which has grown to 1,500 businesses. An annual premium subscription costs £345 plus VAT for operators and £445 plus VAT for suppliers – plus £50 each for additional team members. However, in a Propel “Black Friday” offer, anyone subscribing on Monday (2 December) before 5pm can choose two colleagues to receive the service for free. Email
Scottish tourist tax would ‘cause £205m hit to economy and 6,000 job losses’: The proposed tourist tax in Scotland would hit the country’s economy by £205m and lead to almost 6,000 job losses, according to new analysis published by UKHospitality. The Scottish government is consulting on allowing local authorities to implement a Transient Visitor Levy, more commonly known as a tourist tax. The trade body said the pain would be felt hardest in Edinburgh, which would see a £94m hit and more than 2,600 jobs lost, followed by the Highlands (£33.5m and 949 jobs) and Glasgow (£20.2m and 574 jobs). UKHospitality chief executive Kate Nicholls said: “This ill thought-through proposal will damage Scotland’s reputation as a world-class tourism destination, increase costs for Scottish people, and lead to a loss of jobs and investment at a critical time for the sector. The hospitality sector is already over-taxed, with sky-high business rates and one of the highest VAT rates in Europe. A new tax will put businesses, the vast majority of which are small and medium-sized enterprises, at even greater risk. It’s time this proposal was shelved and the Scottish government talked about how we can secure a bright and sustainable future for Scottish business.”

Hospitality companies rank high in Sunday Times Top Track 100 list: Crazy golf operator Junkyard Golf has been ranked second in The Sunday Times Virgin Fast Track 100, with a 204.21% rise in annual sales growth during the past three years. Warner’s Distillery in Northamptonshire was ranked 12th (131.13%), while Boxpark was in 22nd place with 96.02% and Cornish gin distillery Tarquin's was listed 29th with 85.30% growth. Other hospitality companies on the list included east London-based Super 8 Restaurants (31st, 83.19%); Eden Mill Distillery (38th, 74.20%); Mowgli (45th, 66.05%); Tattu (48th, 63.97%); BrewDog (57th, 56.55%); Beavertown (58th, 56.53%); Flat Iron (63rd, 54.59%); Pizza Pilgrims (82nd, 47.48%); contract caterer Aspens (88th, 46.41%); The Alchemist (92nd, 45.08%); and Honest Burgers (96th, 44.58%). In its 23rd year, the Fast Track 100 ranks Britain’s private companies with the fastest-growing sales.
Job of the week: COREcruitment is seeking an operations director for food development at an international quick service brand. The position involves looking after sales growth, menu expansion and commercial viability in the MENA region and is based in the Middle East. The ideal individual will have a strong mixture of strategic, operational and commercially focused experience paired with food and menu development. They should have worked for an international quick service restaurant brand or contract catering business. The position offers a tax-free salary of £120,000 plus bonus, benefits and family package. For more information or a confidential chat, email

Company News:

Dominion Hospitality sells ten sites but refutes suggestions company is for sale: Dominion Hospitality, which owns and operates hotels and pubs in the south of England under its Relax and Historic Innz brands, has sold ten sites as it concentrates on bigger properties – but refuted suggestions the company was up for sale. The Sunday Times reported Dominion’s owner, American private equity firm Stellex Capital Management, was putting the company “on the block”. However, Dominion chairman Ted Kennedy told Propel that was definitely not the case. He said: “We have sold ten and have a couple awaiting completion. It leaves us with essentially larger properties with 20-plus bedrooms or able to have bedrooms added or good drink-led pubs. We have not put the company up for sale, but as you'd expect plenty of people ask!” Dominion was formed in 2016 through the acquisitions of Chapman Group and Saviour Inns.

Doran steps down as Revolution Bars Group commercial director: Revolution Bars Group, the operator of 76 premium bars trading under the Revolution and Revolución de Cuba brands, has announced Myles Doran has stepped down as commercial director. Doran has been with the group for six years, playing an instrumental role in the business’ evolution and repositioning. Chief executive Rob Pitcher said: “Myles contributed significantly to our success and in particular our drinks proposition and first-to-market product and experiential development, keeping Revolution and Revolución de Cuba at the cutting edge on the high street. He also introduced our incentive programmes as well as supporting our operations and people teams on a large number of key projects over the years. For this and his many other achievements we are grateful and wish him well in his career and next venture.”

Leon set for more roadside sites, trademarks Just Happens to be Vegan name: Natural fast food chain Leon is set to add to its motorway services estate with new openings on two Extra Services sites. The company, which already operates four sites with Roadchef, is set to open through SSP at the Extra Services on the M40 services near Beaconsfield and on the M25 Cobham services. The brand is also set to open a site at the proposed £60m Leeds Skelton Lake services at junction 45 of the M1. Earlier this year, Leon signed a five-year agreement with motorway services operator Roadchef to open more roadside sites across the latter’s UK network. The agreement made Roadchef the principal motorway services operator to work with Leon. At the same time, Leon has trademarked the name Just Happens to be Vegan for restaurant use. Just Happens to be Vegan is currently the tagline used across the company’s Leon grocery Mayo range. The company told Propel there were no further plans currently to extend the use of the tagline outside its grocery range.

I am Doner reveals brand’s next generation as it launches Leeds site: I am Doner, the Think Hospitality Ventures-backed better kebab brand, has launched its third site, in Infirmary Street in Leeds city centre. The site represents the brand’s next generation and builds on its success and award wins during the past year to “further enhance the proposition and customer journey”. The site features I am Doner’s full range of Berlin wraps, rice boxes and salad boxes, including vegan and gluten-free options, all served in biodegradable packaging. It also offers ready-to-drink alcoholic beverages and beer. After a roll-out of Vita Mojo OS technology at its two other stores, in Headingley and Harrogate, the Leeds venue will be the brand’s first outlet designed to be entirely cashless, powered through digital ordering. The company has also partnered with Startle to offer a digital jukebox so customers can select the tracks that play in-store.

Aktar Islam set to open rooftop restaurant as part of new Nottingham hotel: Chef Aktar Islam is set to open a rooftop restaurant in Nottingham. The restaurant will be part of a new hotel being opened in an anticipated £120m development of the Guildhall in the city. Hotel operator Ascena will be submitting an application for detailed planning over the next few weeks. There will be sensitive restoration of the grade II-listed Guildhall – the city’s former magistrates’ court – and Fire Station House. Ascena owns and runs a number of luxury hotel and restaurant facilities in Birmingham and the south west, one of which is the Birmingham Michelin-starred restaurant Opheem, which is run by Ascena business partner Islam. The existing court rooms will be converted to bar and restaurant facilities, retaining many of the original key listed features. There will be a rooftop bar and restaurant to the new-build extension incorporating Fire Station House, which Islam will run. John Wilby, project lead for Ascena, told West Bridgford Wire: “We are delighted this scheme has taken a significant step forward. We will soon be submitting the development for planning and it is likely that all being well, that work will start on site in autumn 2020. It is a landmark development for the city and a key destination for people across the East Midlands. The Guildhall is an amazing building and we are naturally delighted to be working the city council.”

Just Eat sale heading towards auction: Just Eat, the market place for takeaway food delivery, has opened talks with the City’s takeover referee as expectations rise its two suitors will face off in a rare head-to-head auction over Christmas. Representatives from Just Eat and the Takeover Panel are in discussions to lay the groundwork if and Prosus fail to submit best and final offers to investors by 27 December, reports The Sunday Telegraph. Thereafter, strict City rules stipulate regulators will take control of a five-day auction potentially ending in sealed bids. Prosus, the Dutch arm of South African internet titan Naspers, gatecrashed Just Eat’s all-share merger with by pitching a £5bn cash approach in October. The Takeover Panel timetable is linked to Prosus’ offer on 22 October and cannot be moved without the agreement of all three parties. By default bidding would then be spread over five days starting on 28 December. Each side would be given one opportunity to increase their offer before the head-to-head final round. Prosus’ cash offer will not fluctuate in value, whereas the approach is linked to the value of its shares. These will continue to trade independently on the Amsterdam stock exchange. The last time the Takeover Panel stepped in to referee an auction was in September 2018, ending a two-year battle to buy broadcaster Sky.

Hastee secures £208m investment: Hastee, the FinTech company that allows employees to receive earned pay immediately, has secured £208m in funding to roll out its platform to more employers. The company, which lets staff draw down up to 50% of their monthly salary as they earn it, has received £8m investment and a £200m credit line, which will allow it to pay workers directly. The service is free to employers, who reimburse Hastee on payday and Mitchells & Butlers is among the sector companies that have signed up. Hastee founder James Herbert told The Sunday Times he wanted to reduce low-paid workers’ reliance on high-cost credit, such as payday loans, and to improve financial well-being. The first £100 a worker draws down each month is free, with a 2.5% fee on further withdrawals. The funding is from IDC Ventures and Umbra Capital Partners, with the latter providing the credit line.

The Restaurant Group launches further virtual brand through Deliveroo Editions: The Restaurant Group (TRG) has launched a further virtual delivery brand, this time through the Deliveroo Editions site in Battersea. Propel understands the company has launched Baragara, an Indian-influenced virtual brand focusing on burgers. As the Edition’s wording puts it “the burgers of Bollywood dreams, where Indian flavours meets a fast food favourite. All of our meat patties are handmade and spiced with signature Indian spices. Your gourmet Indian burger adventure awaits!” Priced from £7.29 to £9.69, the range includes the Lamb & Bhaji burger, the Varapao & Bhaji burger and a beef & paneer cheese burger. TRG has launched a number of virtual delivery brands this year through its established casual dining brands and delivery kitchens. Through Chiquito it offers the Chicken Cartel, Cornstar Tacos and Kick Ass Burrito virtual brands. It also offers the virtual brands Stacks and Birdbox through its Frankie & Benny’s sites and a number of virtual brands out of the Foodstars unit in Battersea, including Daily Naan, Jumping Pans and Pyjama Hotel.

Dr Noodles to open sixth site, in Edinburgh: Scotland-based noodle company Dr Noodles is to open its sixth restaurant, in Edinburgh. Founder Stuart Crichton has secured a site in Shandwick Place that is expected to open before the end of January. The concept offers noodles stir-fried with protein, vegetables and homemade sauces. Crichton developed the concept after being inspired by noodle bars he visited in London while working there in the early 2000s. He told the Edinburgh Evening News: “Our first shop was in St Andrews in 2010. We grew to Dundee and ventured up to Aberdeen then came back down and opened in Perth and Stirling. Now we feel experienced enough to open to the wonderful people of Edinburgh.”
Restaurant app TopDish halves valuation in £300,000 fund-raise: Restaurant app TopDish has halved the valuation in its £300,000 fund-raise on crowdfunding platform Crowdcube. London-based startup TopDish was initially offering 4.76% equity in return for investment, giving the company a pre-money valuation of £6m. Now it is offering 9.09% equity, giving the company a pre-money valuation of £3m. So far, 72 investors have pledged £194,200 with 24 days of the campaign remaining. Co-founder Gareth Thomas said: “While we’re confident we can get to our target, some potential investors have told us they think our valuation is high for the stage we’re at so we’ve listened hard and, to encourage more investors, we’ve decided to take a pragmatic approach and lower our valuation from £6m to £3m for this funding round. Our reason for raising money on Crowdcube is to expand our shareholder base to as many people as possible so we have an army of supporters for TopDish as we grow our user community.” TopDish said it now had 89,000 dish ratings covering 3,674 UK restaurants since the free app launched at the end of September. The pitch states: “While there are several restaurant review sites, we believe diners need and want help choosing the best individual dishes. TopDish fills this gap. We’ve developed slick Android/iOS apps and a scalable system but that’s the easy part – getting momentum with users and restaurants is the challenge. With this funding we’re aiming for 250,000 users by April 2020, creating defensible UK leadership. We plan to then quickly expand to the US and beyond. Restaurants love the way we promote their dishes and collect ratings and comments, while high-profile chains have given us verbal agreements to promote TopDish using QR codes at the table. As large user communities are created in each country, TopDish plans to become self-sustaining and defensible against competitors, making it an attractive acquisition target.”
SSP extends Hong Kong bakery brand partnership: SSP Group, the UK-based transport hub foodservice specialist, has extended its partnership with Hong Kong brand Tai Cheong Bakery by opening a site at Taipei City Hall metro station. Established in 1954, Tai Cheong Bakery offers traditional baked goods including Chinese doughnuts and own-brand egg tarts. Tai Cheong has more than 20 stores across Hong Kong, Singapore and Taiwan. SSP currently operates a Tai Cheong outlet at Taoyuan International airport and introduced the brand to Banqiao train station in New Taipei. The Taipei City Hall site, which includes a new automated system that streamlines production of its egg tarts, also marks SSP’s first rail food and beverage outlet in Xinyi District. Mark Angela, chief executive of SSP Asia Pacific, said: “Tai Cheong Bakery has a wide appeal in Taiwan and across Asia Pacific and we’re now exploring new opportunities to introduce it to more travel hubs in this dynamic region.”
Hickory’s makes Shropshire debut with Shrewsbury launch: American-style smokehouse and barbecue brand Hickory’s Smokehouse, which is backed by Piper, has opened a site in Shrewsbury – its first in Shropshire. The company has converted the former Waterfront nightclub in Victoria Quay next to the river Severn. The site offers 170 covers and a large bar and has created 70 jobs. There is also a 16-seat cinema room showing a selection of family films. The first Hickory’s Smokehouse opened in Chester in 2010 after founder Neil McDonnell extensively researched the American barbecue and smokehouse sector. There are now 11 Hickory’s Smokehouse restaurants in the north west and Midlands. Earlier this year Hickory’s took the lease of the Boddington Arms in Wilmslow, Manchester, which was previously operated by Mitchells & Butlers, and will reopen it in spring 2020. Meanwhile, its first new-build restaurant will open in late summer in Staffordshire. In September, head of property Jim Bishop told Propel the company was eyeing expansion outside its heartland as it looks to open up to three sites a year. He said the company was seeking sites in Yorkshire, while its restaurant in Worcester gave potential for the company to extend into Cheltenham and Bristol.
St Albans restaurant investment let to The Ivy Collection on market for £2.865m: The freehold of a property in St Albans let to The Ivy Collection, which is backed by Richard Caring, has gone on the market for a guide price of £2.865m. Agent Fleurets has brought the freehold investment of the property in Verulam Road to market with the price reflecting a net initial yield of 5%. The restaurant is let to Troia (UK) Restaurants on a lease until 2047, with circa 27 years on the term unexpired. The guarantee is from Caprice Holdings. It has a passing rent of £152,500 per annum. The 6,308 square foot property includes three flats above the restaurant. Elysia Wilson-Gunn, of Fleurets, who is handling the marketing process, told Propel: “We expect strong levels of interest in this investment opportunity. The tenant, The Ivy Brasserie, is an exceptional operator, with circa 27 years remaining on the lease. The asset is priced reflecting a net initial yield of 5% with a capital value of £454 per square foot.”

Good Food Society opens eastern Mediterranean restaurant in Shoreditch: The Good Food Society, led by Levent Büyükuğur and Sanjay Nandi, has launched an all-day eastern Mediterranean restaurant in Shoreditch, east London. The company has opened Barboun in Great Eastern Street, with Fez Ozalgan heading the kitchen. The restaurant has with a focus on open fire cooking, with dishes such as smoked aubergine with burnt tomato, grilled wild seabass with fermented yoghurt tarhana, and monkfish with zhoug. There is also a grab-and-go deli where customers can pick up produce such as olives, cheese, jam and yoghurt, reports London On The Inside. The Good Food Society also operates Hovarda in Soho and was also behind the now-closed Yosma restaurant.
Slim Chickens opens in Bristol: Boparan Restaurant Group (BRG) has opened a sixth UK site for Slim Chickens, in Bristol. BRG, which owns the master franchise rights to the brand in the UK, has converted its Giraffe site in the Cabot Circus scheme to the US chicken brand. The launch follows an opening at the Brunswick Centre in Brunswick Square, near St Pancras, in October and joins sister London sites in Marylebone and Soho along with units in Birmingham and Cardiff. The expansion comes amid ambitious growth plans for Slim Chickens as BRG aims to open “many more” restaurants in key cities by 2022. Slim Chickens opened its first location in Arkansas in 2003 before expanding to other US southern states to quickly reach the 80-site milestone.
Ipswich-based deli owners to open Suffolk’s first entirely vegan pub: Geoff Bligh and Philip Rivers, who started vegan company Peninsula Foods in March and launched Hank’s Deli in Ipswich in the summer, are to open the first entirely vegan pub in Suffolk. The listed pub in Ipswich town centre is set to reopen in January offering vegan beer and wine alongside a menu of “naughty and nice” pub dishes. Bligh said the success of Hank’s Deli was the driving force behind the new venture. He told the Ipswich Star: “Many days of the week we have queues with people struggling to get a table and wanting us to open in the evenings. We started Friday pop-ups to meet demand but knew we had to get bigger premises and were acutely aware what’s missing in town is somewhere you can eat a vegan evening meal – a pub was a natural fit. We’ll expand what we offer but keep the theme and ideas. Our burgers and chicken replacements have been really popular but we want to balance those with healthier vegan dishes.”
Flight Club founders open debut site for shuffleboard concept: The founders of social darts concept Flight Club have launched their shuffleboard concept, Electric Shuffle, in London. Steve Moore and Paul Barham have launched the concept in Cabot Square in Canary Wharf at a site formerly occupied by Thai restaurant Sri Nams. Electric Shuffle modernises the traditional game of shuffleboard by using technology to turn it into a multi-player game. The Canary Wharf site has ten shuffle tables, each with capacity for 16 players. Electric Shuffle offers craft beer and cocktails alongside a seasonally inspired menu including sharing plates and pizza paddles. Moore and Barham said: “Since 2015 we’ve been on a mission to deliver exhilarating social experiences to as many people as possible. From a pipe dream in a Devon pub to an ever-growing family of Flight Club venues, it has been an incredible journey. Now it’s time for the next step – a surprisingly competitive, delightfully immersive and outrageously thrilling transformation of another traditional pastime. Shuffleboard’s exciting mix of skill and chance and its rich, but sadly forgotten, history made it the obvious choice for our next step. Our modern twist will wow Canary Wharf.” The Flight Club and Electric Shuffle concepts have now been brought under one vehicle – Red Engine.

Hedge funds ramp up bets Cineworld shares will nosedive as speculation mounts boss could take business private: Hedge funds are ramping up their bets Cineworld shares will nosedive as it battles high debts, slowing admissions and rising competition while speculation has mounted about its chief executive taking the business private. It is the most shorted stock on the London Stock Exchange, with funds piling in ahead of a trading update on Tuesday (3 December). Shares were up 1.9%, or 3.9p, to 207.8p at close of trading on Friday (29 November). But Cineworld is struggling under a £2.3bn debt pile and £2.8bn of lease commitments, brought on by its £2.7bn takeover of US cinema chain Regal in 2018, reports the Daily Mail. It comes amid speculation chief executive Mooky Greidinger might look to take the cinema group private. Analysts at Canaccord Genuity claimed Greidinger could launch an audacious bid for the company he runs if the stock’s decline persists for much longer, reports The Times. “Further share price weakness could be the catalyst for a bid from Global City Holdings, the investment vehicle for the Greidinger family,” Canaccord’s Nigel Parson said. In August, Cineworld said cinema admissions had fallen 14% in the first half of the year.
DHP Family executive joins NTIA board: Julie Tippins, head of risk management at live music venue operator DHP Family, has joined the board of the Night-Time Industries Association (NTIA). Tippins will help to drive the NTIA’s work as it seeks to influence the decisions of policymakers to ensure the night-time economy continues to flourish in the face of political and operational challenges. NTIA chief executive Michael Kill said: “Julie will be a significant asset to our board with her considerable experience. We look forward to her input in helping us address the challenges facing the sector both politically and operationally.” Tippins, who joined DHP Family in 2010, added: “DHP Family joined NTIA in 2015 when it was campaigning for the night-time industries in London and giving them a voice with decision-makers. Since then it has been campaigning across the country for a change in the way local and national government engages with operators. This has been successful and I’m keen to help drive this vital work forward.”

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