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Fri 21st May 2021 - Electra to demerge TGI Friday’s into FTSE main market later this year
Electra to demerge TGI Friday’s into FTSE main market later this year: Listed investment firm Electra is to demerge its TFI Friday’s business into the FTSE main market in the third quarter of this year. The move comes as Electra report the brand’s development strategy during lockdown – and like-for-like sales up 76% versus 2019 in the first three days of indoor trading. Electra reported TGI Friday’s was immediately cash generative with partial re-opening in April. Valuing the company at £146.2m, the company stated: “Fridays is emerging from lockdown a much stronger and more rounded business. Its market has been equally transformed as a result of the reduction in competitor supply – through the closure of an estimated 21% of direct competitor restaurants. These factors combined give us confidence in Fridays’ ability to demonstrate further material value creation. Early indications of post reopening trading are very positive with Fridays’ Scottish stores recording sales of 14% like-for-like growth versus 2019 levels in the three weeks following reopening on 26 April 2021, despite being unable to serve alcohol and closing at 8pm. The first three days of business following reopening across England and Wales on 17 May has shown like-for-like growth of 76% versus 2019, reflecting release of pent-up demand following the national lockdown, as well as highlighting the opportunity from spreading demand throughout the week. With this positive start Fridays will continue its strategic growth through delivery of its ‘4D’ Strategy, all underpinned by its 5th D of Development through the addition of brands or markets utilising the Fridays platform to drive profitable growth: Dine-in: the core offering of quality food and drinks in an American-themed environment within its developing Fridays and ‘63rd + 1st’ estate; Delivery: prepared food and drinks delivered to your home at the time of consumption; Digital: expanding the reach of Fridays through the delivery of prepared but uncooked Fridays meals with accompanying drinks nationwide for at home dining and summer barbeques; and Drive-in: opportunity for future growth in drive-through locations aligned to sustainable travel. The sustainable development of the dine-in offering continues with the opening of Fridays in Lincoln and the first ‘63rd + 1st’ in Cobham immediately on reopening, resulting in a trading estate of 87 restaurants. A further three Fridays and four ‘63rd + 1st’ are in the pipeline for opening over the coming months. The development of Fridays’ Delivery and Digital channels was accelerated during covid-19 disruption and will continue to form part of Fridays’ development strategy going forward. ‘Jailbreak Chicken’, a new delivery-only brand, was launched on a trial basis during lockdown and is now available in 19 towns and cities across the country. This builds on the growth of Fridays’ range of drinks and ‘cook at home’ meals launched over the last year. Fridays is also in early exploration of opportunities for future strategic expansion through: the development of quick service restaurants through a capital-light approach aligned to Drive-in sustainable transport infrastructure; and opportunities to develop its existing brands in new markets or additional brands in the UK. Each of the core activities and future opportunities mentioned will be built around the efficient and highly digitised Fridays’ infrastructure platform which has been implemented over the last year, and which allows the Fridays customer facing team to focus on providing great customer service and experiences.” The company added: “The challenges facing the casual dining sector over the last year have been on a scale never before contemplated. Many good businesses will not reopen after lockdown and a significant number of skilled workers have left the industry due to lack of job security. Whilst estimates vary over the percentage of Fridays’ competitors that will not re-open, we consider the initial number is likely to be in the scale of 21%. The utilisation of empty space over time remains to be seen, however the expectation is that other restaurants will fill some of it. Fridays is well positioned to capitalise on this opportunity, having built a pipeline of new store opportunities from those sites that best match our business, both for Fridays and for ‘63rd + 1st’. These new sites come with fit-out and occupation costs significantly below pre-pandemic levels. Over the last year Robert Cook and his newly assembled management team have worked tirelessly to operate economically at every opportunity, generating cash and serving new and existing customers. They have significantly improved the quality and consistency of delivery of Fridays’ core dine-in product whilst developing new channels, new products and new development plans – including for the new brands ‘63rd+1st’ and ‘Jailbreak Chicken’. With skills brought in from outside the industry, the team has also transformed the Fridays infrastructure including the utilisation of technology and data to support both customer experience and the optimisation of performance through yield management. These activities have enabled Fridays to come through the last year without any additional external funding, and it can now face the future with confidence and a strong balance sheet. With the new platform now implemented and the enhanced skills brought in Fridays is well positioned for future growth and development, and is able to offer its team members exciting and rewarding careers. With the new stores in Lincoln and Cobham opening and a strong pipeline of new stores and new opportunities, we are confident that Fridays has the opportunity to grow significant shareholder value in both the short term and in the longer term as a public company.”

103 new companies added to updated database of multi-site businesses exclusively available to Premium subscribers, 13,300-word report to accompany May send-out: The updated database of multi-site companies for May, which is available exclusively to Propel Premium subscribers, will have 103 new companies added. Subscribers will not only receive the database as a PDF and an Excel spreadsheet, they will also be sent an 13,300-word report on the businesses that have been added since its April update, when it is released on Friday, 28 May, at midday. When the most comprehensive multi-site database in the sector was first updated at the end of March, it had 1,631 companies; by the end of May, it will have 1,820. The go-to database provides company names, the people in charge, how many sites each firm operates, its trading name and its registered name at Companies House if different. In a new feature this year, there is a synopsis of what the business does and significant news associated with it. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £895 plus VAT – whether they are an operator or a supplier. The regular single subscription rate of £395 plus VAT for operators and £495 plus VAT for suppliers remains the same. Premium subscribers are also to receive access to a second exclusive monthly database, The Propel Blue Book. This database will provide an insight into UK operator turnover and profitability over five years, profit conversion and directors’ earnings. It will be available on Friday, 4 June, at midday. Subscribers also receive access to Propel’s library of lockdown videos and Friday Wrap interviews and now also have access to a curated video library of the sector’s finest leaders and entrepreneurs, offering their insights on running outstanding businesses in the sector. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out; regular video content and regular exclusive columns from Propel insights editor Mark Wingett. In this week’s Premium Opinion column, which will be sent on Friday (21 May) at 5pm, Mark Wingett looks at another roller coaster week in the life of sector leaders, and what Young’s decision to look to dispose of its tenanted estate could mean for its peers. Email to sign up.

Slerp raises $10m of funding: Slerp, the ecommerce partner for premium restaurants and hospitality brands, has closed Seed and Series A rounds in quick succession, raising a total of $10m this year. Slerp is a platform that enables its partners to sell direct to customers via the website and social channels. The rounds have been led by Eight Roads Ventures, Jigsaw VC and supported by TrueSight Ventures, Aldea Ventures, as well as high-profile Angels including Rumi Verjee, founder of Dominos’ UK and The Rumi Foundation. The investment will be used to further build out the platform and expand the team, across all functions, gearing up for international expansion in Europe. Slerp has seen 500%+ percent growth this year compared to the same period last year. The investment places the company in pole position to capitalise on the growth of home dining and the delivery sector, projected to grow from £3.7 billion in 2020 to £12.6 billion in 2024. Slerp provides a customisable e-commerce solution for hospitality brands, enabling them to transact with customers directly from their own websites, whilst controlling their brand image, customer data and settings. Until recently, the main option for the sector has been marketplace or aggregator delivery services who charge high commission and focus on on-demand orders. Slerp takes just 7.5% in fees and provides a suite of other wrap around services, such as digital marketing and management of the complete ecommerce process for all order types. This enables partners to accept direct orders, manage production planning and connect to delivery services of their choice (or deliver themselves). Brands who use the platform include Jose Pizzaro, The Savoy, Galvin Restaurants, Ottolenghi, JKS Restaurants and Gaucho. Founder JP Then said: “Slerp provides a very different service to marketplaces in this sector. We are powering the next evolution of online ordering by becoming a digital business partner to brands, enabling them to have a direct relationship with their customers and significantly more control of their online channel. Because our roots are as food brand owners and establishment operators, we have purposefully listened to our peers to create a platform solution that provides significantly more control compared to marketplaces, and contributes to both the top and bottom line for businesses. It’s a very exciting time for the sector as it trends towards being more omnichannel and digitally enabled,” Chris Galvin, of Michelin-starred Galvin Restaurants, added: “Slerp has enabled us to connect directly with thousands of new customers and is the best in class of it’s type. The platform has allowed us to deliver the Galvin experience across the country. We see it as an essential revenue stream, and are already seeing customers using at home and in-restaurant services, for key occasion at home. Though we have paused as we reopen our sites, we have big plans for Galvin at home.” JP Then is a co-founder of Crosstown, an omni-channel brand established in 2014, specialising in handmade doughnuts, cookies and ice cream. JP launched Slerp to market at the end of 2019 after three years of building the platform and utilising his knowledge within the sector and using Crosstown as a test-bed. JP was named by Bumble as one of the top 50 people shaping London. He was born in Edinburgh, Scotland, grew up in Brisbane, Australia and has lived in London for 11 years.

Boris Johnson keen to help pubs by calling time on one-metre rule: The “one-metre plus” social distancing rule is still on course to be scrapped next month, Boris Johnson has told Conservative MPs. The Times reports that Johnson said it was the “single biggest difference” the government could make to help pubs get back on their feet and that he was determined to remove the restriction on 21 June. Pubs, bars, restaurants, theatres and cinemas have warned that they will remain financially unviable until the rule is removed. They have been legally required to keep customers at least a metre apart since last July, forcing many hospitality businesses to remain shut throughout the pandemic. Plans to end social distancing measures next month were put in doubt this week after cases of the faster-spreading Indian variant rose. The prime minister shelved an announcement of an end to restrictions, which was due to be made next week. However, at a meeting of the 1922 Committee of Tory MPs on Wednesday evening, Johnson said he was still confident of removing the one-metre rule next month. He told them: “We are hopeful we can do that at the end of the road map.” Johnson said that it would depend on the data “continuing in the right direction”, another sign that the Indian variant is less of a threat than first feared. An MP who attended Wednesday’s meeting said: “He seemed very upbeat about removing the one-metre-plus rule next month. He told us he fully realises that it is the biggest difference the government can make to letting pubs serve customers in reasonably normal conditions and that means getting rid of any capacity restrictions.” The prime minister’s comments were welcomed by pub chiefs last night. Emma McClarkin, chief executive of the British Beer & Pub Association, said: “Given pubs are financially unviable under the current restrictions they face, being able to reopen without any restrictions at all from 21 June is going to be vital to their survival.”

Low rate of infection among crowds at trial major events raises hopes that mass gatherings can safely reopen this summer: Just 15 people among the 58,000 who took part in government-run trials for reopening large events tested positive for covid, The Telegraph has revealed. The trials included the FA Cup final and a semi-final at Wembley, the Brit Awards at the O2 arena in London and DJ sets at the Circus nightclub in Liverpool. The low rate of infection seen during the Events Research Programme has delighted officials and raised hopes that mass events can safely reopen this summer. The final touches are being made to a report making recommendations, expected to be handed to Boris Johnson within days. The main finding will be that large events can be conducted safely if mitigation measures such as pre and post-event testing and improved ventilation are used. It increases the chance that Mr Johnson will push ahead with reopening large events on 21 June, although any such reopening is likely to come with rules about how they can be staged. The Events Research Programme, which ran through April and May, saw nine different events with live crowds, each designed with and monitored by scientists. They also included the World Snooker Championship in Sheffield, a business conference and Festival Republic gig in Liverpool and the “Reunion 5K” run at Kempton Park in Surrey. The roughly 58,000 people in total who attended the events were required to take both a PCR test and a lateral flow test both before and afterwards. Multiple sources told The Telegraph just 15 positive covid cases have so far been detected. It is understood some of those people were tested before events, meaning they were not able to attend. Others tested positive afterwards. Large event venues not yet allowed to reopen fully include sports stadiums, business conferences, theatres, concert venues and festivals. Perhaps the biggest question mark hangs over nightclubs, and it is understood a number of the 15 positive results came from the two nights of events at the Circus club. Prof Jonathan Van-Tam, the UK’s deputy chief medical officer, who is involved in the Events Research Programme, has privately expressed caution about rapidly reopening clubs, according to one well-placed source.

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