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Morning Briefing for pub, restaurant and food wervice operators

Fri 21st Feb 2020 - Propel Friday News Briefing

Story of the Day:

Propel launches ground-breaking delivery conference, open for bookings: Propel has launched The Delivery Conference, which is open for bookings. The ground-breaking event, which takes place at Painters Hall in Little Trinity Lane, London, on Tuesday, 21 April, will cover all aspects of this fast-growing sector, offering expertise, ideas and insights. NPD Group foodservice director Dominic Allport will talk about the delivery market’s growth, key developing trends and where the sector goes from here. KAM Media managing director Katy Moses will reveal consumer perceptions of the market and how they use and interact with delivery operators. Robin Himmels, of Eatclever, will explain how the company has become one of the leading virtual delivery brand operators in Europe and how he sees this part of the market developing. Alasdair Murdoch, chief executive of Burger King UK, will talk to Mark Wingett about early adoption of delivery during his time at Gourmet Burger Kitchen, challenges and opportunities, and how delivery is working for Burger King. Just Eat UK head of strategic accounts Amy Heather, who leads the company’s relationships with QSR, casual dining and mid-market operators, will discuss major trends Just Eat is seeing, key things it has learned, and how it is using data and insights to help operators improve the delivery experience. AlixPartners US director Eric Dzwonczyk and UK counterpart Steve Braude will talk about the US delivery market and how it differs with our own. Susan Martindale, group HR director at Mitchells & Butlers, will look at building a delivery strategy for pubs, the company’s use of virtual brands and a possible move into dark kitchens. Richard Morris, chief executive of Tortilla, will reveal how delivery has forced an evolution of his business for the better. Wagamama’s Andre Johnstone will reveal how the brand has incorporated delivery and click and collect into its model and how it strikes a balance between in-store and digital sales. Deliveroo director of national accounts Matt Ring will talk to Mark Wingett about how the business continues to innovate, its use of data to create virtual brands and the challenges it faces to stay ahead. Meanwhile, a panel featuring Macro Foods founder Kirsty-Lee Griffiths, Crosstown Doughnuts’ JP Then, Yard Sale Pizza founder Johnnie Tate, and Bababoom founder Eve Bugler will discuss launching, operating and growing in a delivery-focused world. Propel managing director Paul Charity said: “Given delivery is one of the fastest-growing channels in the sector – and as its importance continues to rise – we are delighted to present this ground-breaking conference, which will allow operators to make the most of the opportunity delivery offers.” Tickets to the event cost £295 for Propel Premium members, £345 for operators and £395 for suppliers. Email anne.steele@propelinfo.com

Industry News:

Restaurant sector to be ‘hardest hit’ by new immigration laws: The restaurant sector will be the “hardest hit” if new immigration laws come into effect, according to hospitality software provider Fourth. Under legislation due to be introduced in 2021, the salary threshold for skilled workers wanting to come to the UK would be lowered from £30,000 to £25,600. However, Fourth said the legislation would have a “significant impact on the sector” as more than two-fifths (42%) of hospitality employees come from the EU, with the majority paid an average £8.85 an hour (equivalent to a full-time salary of £18,400) and 11% from the rest of the world (ROW), commanding £9.40 an hour (£19,500 salary). The data, taken from the hourly rates of workers at 4,000 hospitality businesses, reveals the restaurant sector would be hit hardest, as three-fifths (60%) of front-of-house staff come from overseas (49% EU, 11% ROW), with an average wage of £8.47. However, back-of-house operations would be most affected as three-quarters (75%) of the sector’s workforce is made up of overseas workers (61% EU, 14% ROW) with an average wage of £9.17. Similarly the quick service restaurant sector, which consists of 61% overseas workers (50% EU, 11% ROW), would also be “seriously affected” with a £9.46 average hourly wage. Pubs and hotels rely less on foreign workers, 33% and 40% respectively, but would still be hit, Fourth said. Mike Shipley, vice-president of analytics at Fourth, said: “This move will undoubtedly add further fuel to the fire in the industry’s fight to attract and retain the best employees. Furthermore, the new legislation doesn’t take into consideration the specific nuances of the hospitality industry such as tips, which aren’t included in calculations for the new thresholds. The announcement comes after the government revealed further increases to the National Living Wage in April, which is a double blow for the industry. This extensive pressure on wages will be further exacerbated by a shrinking pool of workers.”

Stormzy bags Greggs’ first ‘black card’: Greggs has awarded singer Stormzy its first “black card”, which allows him to order baked goods whenever and wherever he wants. Days after being named best male artist at the Brit awards, Stormzy tweeted his life had “peaked” after becoming the first member of Greggs’ invite-only VIP service for celebrity fans. Nando’s has a similar “black card” it sends to celebrities, which allows them to get free meals for up to five people at any of its restaurants. Greggs told the Guardian: “Our concierge card is strictly by invite only to some of our biggest fans.” 

Brits mock Burger King ‘chip butty’: Unimpressed Brits have mocked Burger King’s new “chip butty”, while Americans are horrified by the “monstrous” invention. The British staple, which is being trialled in New Zealand as part of Burger King’s Change Range menu, has caused confusion since a photograph of the sandwich appeared online. The burger – known as the “chip butty” – contains fries in a sesame seed bun with tomato ketchup and mayonnaise. Britons mocked Burger King for taking so long to “finally figure out what a chip butty is”. One tweeted: “Americans have finally figured out what a chip butty is and subsequently ruined it.” Others teased Burger King for being “way behind the times”. One Twitter user in the US wrote: “I have never actually had Burger King but why did it think it could put fries and ketchup in a bun and call it a sandwich? That should be illegal.” The sandwich is currently only available in New Zealand. On its website, Burger King described the “chip butty” as “fit for a king at a price fit for everyone”.

Company News:

Adventure Bar heading to Birmingham for debut regional site, assessing funding options: Adventure Bar, the London cocktail group led by Tom Kidd, is set to open its debut regional site and has been assessing funding options as it plots further expansion. The company is heading to Birmingham where it will launch its third Tonight Josephine venue. The bar, which will open in the summer, will be in the basement of Ladbrokes in Stephenson Road, opposite the Bullring shopping centre. It will have capacity for more than 400 people with a late licence throughout the week. Adventure Bar operations director Tobias Jackson said: “After months of planning we are excited to open our first venue outside London and introduce Tonight Josephine to Birmingham. Every effort will be made to ensure our guests have the true Tonight Josephine experience.” Adventure Bar has also been looking at a number of options as it looks to fund its next stage of growth. Propel understands Adventure Bar is in talks with a couple of private investors with its short-term expansion plans thought to focus on London. The group operates 11 sites including Bar Elba in Waterloo, Blame Gloria in Covent Garden and The Lost Alhambra in Leicester Square.

Radio Alice founders acquire majority stake in business: Berberè, the independent Italian company founded by brothers Salvatore and Matteo Aloe, has acquired a majority share of Radio Alice, the joint venture it set up with Azzurri Group in 2016, Propel has learned. Azzurri, the Steve Holmes-led operator of the ASK Italian and Zizzi brands, backed Radio Alice’s launch and initial expansion and will continue to own a minority share in the UK business. Radio Alice operates sites in Canary Wharf, Clapham and Hoxton Square. Propel also understands Gail’s Bakery co-founder Emma King will stand down as Radio Alice managing director to pursue other opportunities. The Aloe brothers also operate 12 sites in Italy under the Berberè name and are understood to be eyeing further opportunities to grow Radio Alice in the UK and Berberè in Europe. The Aloes said: “We would like to thank Azzurri Group and Emma King for enabling us to open in a city we love. After three successful years of our joint venture we look forward to continuing our love affair with London. We are relocating to the UK to take full control of the day-to-day operations there, focusing on super good pizza served in beautiful spaces in line with what we do back home in Italy. We started with just one pizza oven, a collective of farmers and a young team in our home town of Bologna. Our aim is to create quality sourdough pizza using the best seasonal ingredients and we hope today’s deal allows us to continue our adventure in London.” Radio Alice, which is named after a 1970s Italian pirate radio station, launched in Hoxton Square, east London, in late 2016. The concept uses mother yeast and stone-ground flour to produce dough that is left to ferment at room temperature for 24 hours, producing a pizza base that is crispy outside and soft inside. 

Island Poké eyes European consolidation play, eyes further UK expansion: Island Poké, the White Rabbit Fund-backed concept, plans to become the key consolidator in the European poké market as it looks to become the “trusted global poké brand”. Under a new joint venture agreement, the company plans to open 42 sites in the next five years in France, Belgium, Luxembourg and Switzerland, with the majority of sites in France. The James Porter-led business plans to open 13 sites in the first year under the new agreement, ten in the second and 12 in the third, starting with an opening in Paris in April. Its debut European site will launch in Rue Saint-Honoré in the 1st arrondissement of Paris. Other openings in France in 2020 will include Nice, Montpellier, Marseille and Nantes, plus two sites in Lyon. The brand’s international expansion will be overseen by Hugh Petit, who has been promoted from operations manager to franchise manager. White Rabbit Fund founder Chris Miller told Propel the company hoped to sign similar agreements for expansion into Scandinavia, Holland and Germany. He said: “It is quite a fragmented market made up of a lot of smaller, local players. With Island Poké we hope to become the consolidator of these markets and the go-to trusted global poké brand.” The company, which Porter founded in 2015, securing the backing of White Rabbit Fund a year later, has grown to eight sites in London. Propel understands it hopes to open three to four more sites in London this year on top of its European plans. It is also believed Island Poké is also in talks to open a concession at Arcade Food Theatre in New Oxford Street.

Simple Health Kitchen passes £750,000 crowdfunding target in 24 hours to open ten delivery hubs: London-based healthy eating concept Simple Health Kitchen has passed the £750,000 target in its fund-raise on crowdfunding platform Crowdcube within 24 hours of its public launch. The company, founded by former Newcastle Falcons rugby player Bradley Hill, is offering 7.48% equity in return for investment, giving the business a pre-money valuation of £10m. So far, 105 investors have pledged £811,570 and the campaign is “overfunding”. Funds will be used to open eight to ten delivery hubs around London. Hill founded Simple Health Kitchen after a life-threatening illness forced him to focus his attention on diet and nutrition. Having opened a site in Watling Street in St Paul’s, he has added two more quick service restaurants in the capital, in Baker Street and King William Street in the City of London, and two delivery kitchens. The pitch states: “Simple was born from the frustration of being unable to get high-quality, affordable, healthy food on the go. In 2016 we launched our first quick service restaurant in St Paul’s and it was an instant success, with queues outside the door. Since opening we have been growing revenues at 50% per year. We now have more than £240,000 average monthly revenues and a 12% Ebitda margin. Group revenue for the past 12 months was £2.9m (Ebitda £357,000). The company is debt-free. Our dedicated central kitchen allows us to begin our recipes from scratch, ensuring we know exactly what goes into our food. We are also predominantly dairy and gluten free and don’t use refined sugars. We are much more than a healthy restaurant. We plan to open eight to ten delivery hubs around London allowing almost anyone to order food from Simple within 30 minutes. We are also increasing our healthcare focus and we’re in the process of launching an innovative meal subscription plan, which will be directed primarily to nutritionists, doctors and personal trainers. We are on a mission to make London a healthier place!”

Peel Hunt cuts TRG pre-tax profit forecast by 3%: Peel Hunt has cut its pre-tax profit forecast at The Restaurant Group (TRG) by 3% ahead of the company’s preliminary results on Wednesday (26 February). Issuing a ‘Hold’ note on the shares with a target price of 145p, leisure analyst Douglas Jack said: “After 34 weeks, group like-for-like sales were up 3.7% against soft comparables, driven by Wagamama. Given the subsequent slowdown in Wagamama’s like-for-like sales and the trading backdrop – the company cited disruption at Gatwick due to Thomas Cook and tough cinema comparables – we estimate group like-for-like sales were up almost 3% after 46 weeks versus our 2.4% full-year forecast assumption. Subsequently, like-for-like sales among TRG’s peer groups lowered against a backdrop of slowing airport passenger growth, weak retail footfall, and only a slight increase in cinema attendance in November and December. January was a better month for the restaurant sector but is the least important trading month of the year. We expect 2020E to be a tough year for restaurants, which face difficult weather comparables and Euro 2020 during the summer. Our 2020E forecast assumes like-for-like sales rise 2%. This would be a good result for the company, if it can achieve it. We forecast 45 basis points margin growth in 2019E, driven by the addition of Wagamama. Its margins are almost 200 basis points higher than the rest of the group. This is a slowdown on the first half’s 66 basis points increase because of lower forecast like-for-like sales. TRG’s valuation isn’t strenuous, especially on a sum-of-the-parts basis. In our view the best way for the company to unlock this upside is by accelerating an orderly exit from the leisure estate, although this could be difficult and expensive. We wouldn’t sell the company’s best assets. Net debt is forecast to remain high but the ongoing repositioning of the estate should help the valuation multiple to improve over the long term.”

CDG lines up three Las Iguanas launches: Casual Dining Group (CDG), the James Spragg-led business, is to add three sites to its Las Iguanas estate including two Café Rouge conversions, Propel has learned. The 57-strong Latin American restaurant chain, which launched in Bristol almost 30 years ago, will replace Café Rouge sites in Brindley Place in Birmingham and Kingsway, London. The brand will also launch a site in Princes Quay shopping centre in Hull this year. In December, CDG announced plans to expand Las Iguanas by targeting five openings in 12 months. Las Iguanas operates sites as far afield as Aberdeen and Torquay, including two franchised sites – at Center Parcs Longleat Forest and in Woburn. CDG told Propel: “We review our estate on an ongoing basis to assess suitability. We have three core brands, Las Iguanas, Bella Italia and Café Rouge, and this move represents our appetite to grow our Las Iguanas estate.”

The Leela Group to launch high-end Chinese concept in Mayfair: The Leela Group, which is behind Indian restaurants Bombay Bustle and Jamavar in Mayfair, is to launch a high-end Chinese concept in the London district. The company has secured the premises previously occupied by Indian restaurant Matsya in Curzon Street in an off-market deal brokered by Restaurant Property. The 85-cover Chinese concept, which has yet to be named, will be split over four storeys and is expected to launch in May. The 3,324 square foot site has an annual rent of £220,000 with a lease running until 2037. David Rawlinson, founding director of Restaurant Property, said: “Mayfair continues to attract significant international interest. Despite a challenging 2019, there are grass-roots signs of confidence returning to parts of the sector and premium prices starting to rise.”

The Gentlemen Baristas opens in Hammersmith for tenth site, two more to follow: Coffee shop company The Gentlemen Baristas has opened its tenth site – with two more to follow. The company has launched the outlet in Hammersmith, west London, with the outlet based in Shortlands. A site in Mayfair will follow next month with a Victoria branch landing in May. The Gentlemen Baristas, founded by Henry Ayers and Ed Parkes, is also set to unveil a new food menu and spring and summer drinks offer next month. Ayers and Parkes opened their debut site in Southwark in 2014.

Six by Nico confirms London launch: Six by Nico, the restaurant concept led by Scottish-Italian chef Nico Simeone, has revealed it will make its London debut. Six by Nico has confirmed it will open in Charlotte Street in the spring after securing the former Azzurri Group-owned Zizzi premises. Work is under way to transform the site, which will have 80 covers and create 40 jobs. The concept is based on a revolving culinary hub as every six weeks Simeone and his team “reinvent the wheel” by serving a new six-course tasting menu, each themed on a place, memory or idea. The debut Six by Nico opened in Glasgow in 2017 followed by launches in Edinburgh, Belfast, Manchester and Liverpool. Simeone said: “Charlotte Street provides us with a great opportunity to join the city’s thriving restaurant scene. Restaurant trends are moving towards experiential dining and Six by Nico menus are inspired by great memories and interesting stories. Our London restaurant will create the perfect recipe for an exciting adventure.” Simeone’s empire has grown rapidly since he launched his first restaurant, 111 by Nico, in Glasgow in 2011. He also operates a gastro-pub in the city’s Great Western Road.

C & G Inns acquires Mavericks’ Leeds site for eighth venue: Huddersfield-based C & G Inns, led by Gordon Lambert and Craig Isaacs, has acquired a site in Leeds formerly operated by bar and nightclub brand Mavericks for its eighth venue. The former cocktail lounge in the suburb of Horsforth will undergo a “significant internal and external refurbishment” to reopen as Lambert’s Bar & Cookhouse offering quality food and drinks. Isaacs and Lambert said: “Having found the site in an ideal location, we knew the potential for the building to become a bar and restaurant was significant. We’re excited to open the doors to the residents of Horsforth in the near future. We aim to establish ourselves quickly and appeal as a destination venue for surrounding towns and cities.” Sam Ashton, business agent at Christie and Co, who handled the sale, added: “This sale indicates the ongoing appetite for nil-premium empty units in affluent parts of Yorkshire.” The sale leaves Mavericks with two sites, in Bingley and Huddersfield. The Horsforth site launched in October 2016 and was the most recent opening for the brand, which focuses on 1980s-themed cocktails and live music.

Domino’s Pizza reports global sales up 6.9% in fourth quarter and 5.7% for 2019: Domino’s Pizza has reported global sales increased 6.9% in its fourth quarter ending 29 December 2019 and 5.7% for the full year. Like-for-like sales were up 3.4% in the US in the quarter and 3.2% in 2019. The international division saw like-for-like sales grow 1.7% during the quarter and 1.9% for the full year. The figures marked the 104th consecutive quarter of international like-for-like sales growth and the 35th consecutive quarter in the US. Total revenue in the quarter increased 6.3% to $1.15bn, with full-year revenue up to $3.62bn. The company added 492 stores during the period – 351 internationally and 141 in the US. In the full year it opened 1,106 stores – 856 internationally and 250 in the US. Diluted earnings per share in the quarter were up 19.1% to $3.12. Chief executive Ritch Allison said: “Our relentless focus on our customers and franchisees and the long-term growth and profitability of the Domino’s business model helped us deliver a solid 2019 in the face of unique competitive headwinds.”

Watch House Coffee to open largest site to date via first Fernandez & Wells refurbishment: Edition Capital-backed coffee concept Watch House is to open its largest site, in London’s Somerset House, on Monday (24 February). London-based Watch House, which secured its £2.1m Series A investment round anchored by Edition last summer, will launch the site in the landmark building following an extensive refurbishment of the 2,300 square foot former Fernandez & Wells space. Watch House acquired the four sites previously owned by Fernandez & Wells in December, with the other venues in Mayfair, Soho and South Kensington. Watch House, led by Roland Horne, has been expanding rapidly since early 2019, growing from three sites to nine within 12 months. Horne said: “When looking at the growth of our business we took the strategic decision to open in the right areas and at the right speed. That could be slow or fast but has to be right. We have now been on active growth pursuit in new localities and we’re delighted to open in one of London’s most prestigious venues. This will be our most challenging take on modern coffee in an exceptional space, which also includes a five-metre tree in the middle of this Georgian masterpiece.” Horne founded Watch House in Bermondsey Street in 2014, while the group also has sites in Tower Bridge, Fetter Lane and Spitalfields.

Robin Gill to oversee restaurants at Hertfordshire country escape: Chef entrepreneur Robin Gill is to oversee two restaurants at Birch, a new country escape in Cheshunt, Hertfordshire. Birch will open in April at grade II-listed Georgian hotel Theobalds Estate featuring a wellness centre and hosting cultural and arts events as well as accommodation. Gill and former Dairy head chef Ben Rand will head the two on-site restaurants – The Zebra Riding Club and Valeries – with the majority of ingredients sourced from the estate’s farm and woodland. Valeries will be a casual all-day restaurant, with meat and fish cooked on a grill and sourdough flatbread produced in the on-site bakery. The Zebra Riding Club will be Birch’s flagship restaurant, while eight-cover private dining area The Gun Room will be available to hire. The venue is the first of several Birch country escapes being planned by founders Chris Penn and Chris King, which will feature a membership system, although accommodation at the hotel will be unaffected. King told Hot Dinners: Whether you’re with us for a day or night, work or weekend, we want to leave you in a better place than when you found us.” Gill oversees the food and drinks offer at the Great Scotland Yard Hotel, which opened in London’s former Metropolitan Police headquarters in December. He also opened Darby’s at the Embassy Gardens development on the South Bank last year and is behind other London venues Sorella, The Dairy and Counter Culture.

Simon Rogan to launch L’Enclume residency in Sydney: Chef Simon Rogan is to take a taste of his two Michelin-starred Lake District restaurant L’Enclume to Australia for a six-week residency. The chef and other members of Simon Rogan Restaurants, including recently appointed managing director Sam Ward, will operate at Bathers’ Pavilion on Balmoral Beach from 15 July to 30 August serving signature L’Enclume dishes with “Australian adaptations”. Rogan said: “It is a dream to bring the L’Enclume experience and ethos to the other side of the world. Showcasing what we do so far from home will be a great opportunity to engage with a different audience. Guests can expect a menu of some of our favourite dishes from L’Enclume but with a few seasonal tweaks here and there according to the ingredients available to us.” Rogan, who is chef proprietor of eight restaurants, recently told Propel he was looking to add a pub to his expanding estate. Our full interview with Simon Rogan will appear in the next edition of Propel Quarterly magazine, which is due to be published in March. To order a free copy, email anne.steele@propelinfo.com

Michael Caines to relocate staff following Devon hotel’s shock closure: Michelin-starred chef Michael Caines has been left “shocked and saddened” by the sudden closure of Kentisbury Grange Hotel, near Barnstaple in Devon. The four-star hotel has closed “indefinitely” following the discovery of a “major infrastructural fault”. Caines, who was a consultant at the hotel and also operated The Coach House restaurant at the site, said: “I am shocked and saddened to hear the news of Kentisbury Grange and our thoughts are with the staff and customers. Michael Caines Limited has been consulting at the restaurant for several years but has no shares or business interest in the property. Therefore, we are shocked to hear the news too. At this stage we await to hear further updates but we will work with the team to find alternative employment and facilitate them within our expanding portfolio.” Last month Caines acquired seafront restaurant The Cove in Maenporth, near Falmouth, for his first site in Cornwall in a venture backed by Cornish entrepreneurs Roger and Helen Edwards. The chef will take over the restaurant in March. Caines’ portfolio includes another Devon country house hotel, Lympstone Manor, and he will launch an as yet unnamed seafront venture in Exmouth in July. Grade II-listed Kentisbury Grange was built in 1894 and has been extensively restored and refurbished.  

Thai street market concept opens permanent site: Thai concept Satay Street Cafe has opened its debut site after 11 years of trading in east London’s street markets. Owner Som Boonchan launched her stall in Brick Lane in February 2009, serving her signature satay from a recipe passed down by her mother in Bangkok. Now, having traded at markets including Shoreditch High Street Market, Petticoat Lane Market, Fenchurch Street station and Old Street WeWork, Boonchan has opened a permanent home in Goulston Street, Spitalfields. She secured the premises in October 2017 but it has taken two-and-a-half years to reach an opening date. The 20-cover cafe offers Boonchan’s traditional satay, along with an extended menu featuring dishes inspired by the street food markets of Bangkok. Boonchan said: “It has been an extremely difficult process due to the many complications restaurant owners face in London but one thing my mother taught me, as well as her secret satay recipe, is patience and I applied this to the opening process. Having patience for 11 years has proved trying but this is a happy day for me and I look forward to sharing our dishes in a warmer and more comfortable environment.”

Itsu launches vegan meatball dish: Itsu, the healthy Asian food chain created by Pret A Manger co-founder Julian Metcalfe, has partnered with Meatless Farm to create a vegan Asian meatball dish it claims is a UK first. The plant-based meatless meatballs rice bowl is available at the company’s 65 London stores and features five meatless meatballs served on rice topped with teriyaki sauce and pumpkin seeds. Itsu group brand and marketing director Jemima Ferguson said: “We are proud our menu is one-third plant-based and our vision is to make it 50%. We are pioneering a brighter future for fast food.” Last month Metcalfe said he was a plotting a stock market float of Itsu to raise cash for a major US expansion, with plans to open 1,000 stores in the country in the next few years. The first American Itsu has opened in New York, while construction for a second, in Wall Street, will begin in the summer. Itsu operates 76 sites in total.

Brewhouse & Kitchen launches children’s menu with healthy build your own element: Brewhouse & Kitchen, the 22-strong brewpub group, has launched a menu that allows children to create their own meal. The menu includes a healthy build your own item that features wraps with fillings such as grilled chicken strips, warm tortillas, grated cheese, lettuce, smashed avocado, tomato, cucumber and barbecue sauce. Other items on the menu include barbecue chicken wings, mini-doughnuts with chocolate dipping sauce, burgers, mini steak and chips, and halloumi fries. All items can be included as part of a meal deal. Brewhouse & Kitchen head of marketing Matt Preisinger said: “Our offering centres on family gatherings and with our children’s menu we hope to give families a great space with great food to spend quality time together.” Brewhouse & Kitchen reported a 7% year-on-year rise in like-for-like sales for food and drink during the Christmas and New Year period. The company is also set to launch a “brewtel” concept after identifying 72 potential rooms across its estate.

Douglas Jack – Revolution Bars Group offers attractive equity upside: Peel Hunt leisure analyst Douglas Jack has said Revolution Bars Group offers attractive equity upside as it continues executing its turnaround strategy. Issuing a ‘Buy’ note on the shares with a target price of 125p ahead of its interim results on Wednesday (26 February), Jack said: “April’s 6.2% increase in the National Living Wage will cost £2m, yet we aren’t changing our forecasts. This is due to circa £1m of annual cost savings being on track, a £1.5m per annum operational cash flow improvement (£1.0m per annum relating to the onerous lease provision; £0.5m per annum benefiting adjusted Ebitda) from exiting seven loss-making leases and four lease re-gears (in the early second half of 2020), and better like-for-like sales. Our full-year forecast assumes like-for-like sales rise 1.5% versus 1.2% in the first half, with a comparable of minus 2.9% to look forward to in the second half. We believe like-for-like sales should continue to build due to 36 live work streams that include better events, entertainment, food and drink, as well as rising asset quality (including 15 refurbishments per annum achieving 40%-plus average cash returns) and a much improved digital journey. In 2020E margins should start to recover. We estimate like-for-like sales should cover labour cost inflation (the labour ratio is circa 27% of sales), with cost savings driving a 90 basis points increase in margins, weighted to the second half. We forecast net debt falling in the first half and being flat over the full year due to Revolution Bars Group paying almost three times trading losses (£3.5m) to exit unprofitable leases in the second half. We forecast net debt/Ebitda to be 1.2 times, falling to 0.6 times in 2022E, despite our forecast of expansion resuming at two new large sites per annum from 2021E. We believe Revolution Bars Group offers attractive equity upside from a lowly four times EV/Ebitda given Ebitda growth and debt reduction should grow equity value by 60% over the next three years, in addition to a potential significant re-rating.”

EasyHotel acquires Madrid site: EasyHotel, the owner, developer, operator and franchisor of “super budget” branded hotels, has acquired a site in Madrid. The group plans to develop a 230-bedroom hotel in Mendez Alvaro for its second company-owned site in Spain, joining its hotel in Barcelona. The cost of acquisition and construction of the purpose-built hotel, which is expected to open in the 2021-22 financial year, is expected to be in the region of €28m (£23.5m). Interim chief executive Scott Christie said: “Our new investment in Spain marks the latest step in our strategy to expand our owned hotel network across centrally located, high-quality sites in major European cities. The group continues to make good progress towards securing sites in its target destinations and we look forward to announcing further developments in due course.”

Shrewsbury-based events caterer goes into administration: Shrewsbury-based events caterer MPM Catering has gone into administration. The family-run business, which trades as Cook Street, has appointed Conrad Pearson and Patrick Lannagan, of Mazars, as joint administrators. Cook Street operates from leased premises in Shrewsbury and provides high-volume mobile catering to public events around the UK. The company, which was established in 2009, specialises in street food-style catering with a fleet of catering trailers, on-site support and cold storage vehicles. Of the 12 employees, no redundancies are being made at this stage. Pearson said: “This family-run business was understandably affected by the loss of its managing director, who passed away last year. In addition to this, trading has been affected by cash flow difficulties, which has led the current management to conclude they have no appetite for continuing the business. The administrators are marketing the business and assets in the short term with the hope of achieving a sale.”

Zonal’s Acquire platform reaches £2bn milestone: Acquire, the online purchase to pay platform from hospitality management solutions firm Zonal, has processed £2bn of orders since its launch four years ago, the company said. With 3,100 sites across the UK now using the software to manage their purchasing and stock management, more than 3.1 million orders have been received since 2016, with 1.6 million in the past year alone, equating to an Acquire order processed every two seconds. Operators also have access to more than 900 suppliers, ranging from small artisan producers to large national wholesalers. Zonal director of online commerce Helen McMillan said: “Acquire has been well received by our customers, which range from leisure businesses to small, medium and large-scale restaurant, pub and hotel operators. They all value its agility and the fact they can tightly control costs through its integration with menu management, stocks and finance.”

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