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Morning Briefing for pub, restaurant and food wervice operators

Thu 24th Jun 2021 - Update: Various Eateries, junk food, Hawksmoor, PPHE Hotel Group
Various Eateries reports ‘very strong’ trading since reopening, Coppa Club like-for-likes up 28.3% on 2019 levels in past five weeks: Various Eateries, the AIM-listed Andy Bassadone-chaired business, has reported “very strong” trading since reopening, facilitated by large outdoor spaces. The company said it had seen “better than anticipated” sales across its Coppa Club estate with like-for-like revenue up 11.3% in the first five weeks (12 April to 16 May) of exclusively outdoor trading versus the same period in 2019. It saw a “further significant uptick” in sales in the five subsequent weeks (17 May to 20 June) where Coppa Club sites have been able to open indoors with like-for-life revenue up 28.3% versus the same period in 2019. Various eateries said several Coppa Club sites have seen record levels of weekly trading despite restrictions The business has also seen a “solid” performance at Tavolino Tower Bridge and Strada Southbank, despite the continued absence of office workers and tourists. Various Eateries said it has a strong pipeline of large, prominent new sites for Coppa Club signed in Clifton (Bristol) and Putney, with several others in advanced stage of negotiation. The business said its healthy liquidity and balance sheet puts the group in a strong position to deliver against its growth strategy with conditions normalising. It comes as the company reported total group revenue fell to £3.3m for the 27 weeks ended 4 April 2021, compared with £11.2m the previous year. Adjusted Ebitda was £0.0m, compared with a loss of £0.3m the year before. The business reported a loss after tax of £3.2m, compared with a loss of £3.3m the previous year. Gross cash at the period end was £19.3m, compared with £1.3m the previous year. As of 22 June 2021, cash in the bank was £20.8m. All sites were closed for the majority of the period with trading under a variety of government restrictions limited to a maximum of seven weeks in the period. It saw like-for-like performance of 10.1% at its Coppa Club sites outside of London during October 2020, the only complete month of trading. It reported “outstanding” early performance of Coppa Club Cobham following its opening in December 2020. As previously reported, Various Eateries received a business interruption insurance interim payment of £2.5m in December 2020. Bassadone said: “Our business is primed for growth. We have used lockdown to hone our existing sites, secure new ones and ensure we have the right systems and processes in place behind the scenes to enable us to scale effectively. After prolonged periods of closures and disruption, it is heartening to see the public returning so enthusiastically to eating and drinking out. It is still early days but the response to our reopenings has been good and trading has been ramping up as we have moved through the government’s roadmap. As we emerge from the crisis, we do so a well-funded operator, led by an experienced management team with an exceptional track record of building hospitality groups. Our variety of clubhouses and hospitality venues is excellently suited for the post-covid world and our strategy is unchanged – to take advantage of the unprecedented opportunities the current environment presents.” Chief executive Yishay Malkov added: “We have been delighted by the enthusiastic return of our customers over the Past few weeks since reopening on 12 April. Thankfully, we managed to retain most of our staff through lockdown and they have coped admirably with the incredible levels of business that we have seen recently. Although the labour market is currently difficult in terms of new hirings, we are set up and prepared to train new employees from scratch and do not believe that it will impede our ambitious expansion plans.”

Brewers increasing number of on-trade sites according to updated database of multi-site companies, exclusively available to Premium subscribers: Brewers are increasing the number of sites they have as direct trade to customers via pubs, according to the updated Propel Premium database of multi-site companies, which will be released on Wednesday, 30 June, at midday. Another 63 businesses will be added to the most comprehensive database of multi-site operators in the sector. Among that number is brewer and pub operator Wolfpack Lager. It was founded by ex-rugby union professionals Alistair Hargreaves and Chris Wyles, and runs pubs in Queens Park and West Hampstead. It has announced a summer 2021 opening at the former Malt House in Fulham, which was acquired in an off-market deal from the Jolly Fine Pub Co. Norfolk brewer Woodforde’s is a brewer and retailer based in Norfolk that operates the Fur & Feather Inn, which is next to its brewery in Salhouse. It opened its second pub this month – the Lord Nelson in the village of Burnham Thorpe. Available only to subscribers, the exhaustive database was most recently sent at the end of May and included the details of 1,819 companies. 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, and what each business specialises in. 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. 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. Email to sign up.

Small businesses to be exempt from junk food ban: Small businesses, including restaurants and cafes, will be exempt from a ban on junk food advertising under plans to be revealed by ministers today (Thursday, 24 June). As part of prime minister Boris Johnson’s efforts to tackle obesity, the government will introduce a ban on unhealthy food adverts online and before the 9pm television watershed. Whitehall sources told the Telegraph ministers are pushing ahead with the measures, which were outlined in the Queen’s Speech in May. However, they said the online restrictions would stop short of a “total ban”, as it would only apply to paid-for advertising. Small businesses will also be exempt from the online and television ban. It follows concerns earlier this year that small high-street restaurants, cafes and bakeries could be caught up in the new online restrictions and prevented from drumming up business by posting images of products such as cakes and pastries on their social media accounts. It is expected the government will set out in more detail which products will be in scope for the ban. Christopher Snowdon, head of lifestyle economics at the Institute of Economic Affairs, said: “With its new exemptions, the government has acknowledged that banning adverts for normal, everyday food products would stifle competition, hurt businesses and be bad for consumers. It should now throw in the towel and accept that advertising jam, sandwiches and olive oil should not be a criminal act under any circumstance, regardless of how many people the company employs.” At present a formula based on sugar, salt and fat content determines which foods cannot be advertised during children’s television. The Advertising Standards Authority is expected to enforce the new restrictions, with companies that flout the rules ordered to take down adverts and potentially incurring sanctions if they offend repeatedly. The Telegraph understands a number of industry figures were called in for meetings on Wednesday (23 June) to discuss the changes, which are expected to come into force later this year. Other proposals include a ban on discount deals for unhealthy food and the requirement for large restaurant chains to put calorie counts on menus. However, calorie labels will not be required on alcohol.

Hawksmoor to open first London site in four years with floating restaurant in Canary Wharf: Graphite Capital-backed steakhouse concept Hawksmoor is to open its first London restaurant in four years. The company will open a new restaurant and bar in a floating pavilion in the docks of Wood Wharf, a new part of Canary Wharf, this winter. Set over three levels with a 150-cover restaurant, a 120-cover bar and outdoor space for eating and drinking, it will be Hawksmoor’s biggest restaurant. Co-founder Huw Gott said: “It has been a real joy planning a new restaurant and bar after all this time and uncertainty. It marks a turning point for all of us at Hawksmoor, as well as our farmers, producers and suppliers. An exciting space that floats on the water, it will include our most ambitious bar to date, with plenty of river-side seating.” Co-founder Will Beckett added: “A silver lining for covid was that it viscerally reminded us how much Hawksmoor matters to us: the people, the restaurants, the suppliers. It reminded us about how much meaning we feel in our lives working at Hawksmoor, trying to build a company with real integrity. However, some of the other things we cared so much about suffered greatly, including the hospitality industry and many city centres, especially London. As well as doubling down on Hawksmoor, we want to make sure we play our part in helping hospitality and London build back better.” Hawksmoor Wood Wharf restaurant and bar will be housed in an eco-friendly floating pavilion made from sustainably sourced timber decking and aluminium extracted from hydro sources. The fully floating pavilion will have a green roof planted with wildflowers and grasses, to encourage visits from insects and bees and to improve carbon capture. It will be primarily powered by energy from Canary Wharf’s Combined Heat and Power network to help lower the impact on the environment. Beckett and Gott launched the first Hawksmoor restaurant 15 years ago in Spitalfields, east London. The business has grown to include six restaurants in London, one in Manchester and one in Edinburgh.

PPHE unlocks £113.7m of equity through joint venture with Clal Insurance: PHE Hotel Group has announced it has agreed terms to enter into a joint venture with Israeli insurance and long-term savings company, Clal Insurance, in respect of Park Plaza London Riverbank and the Art’otel London Hoxton development. PPHE will receive a cash consideration of £113.7m as part of this transaction, enabling the group to pursue new opportunities to accelerate growth. Park Plaza London Riverbank is a 646-room hotel, located on the Thames, part of London’s Southbank, overlooking the Houses of Parliament. The development of Art’otel London Hoxton is due to complete in the first quarter of 2024 and will comprise a 27-storey building in Shoreditch, including 343 bedooms and suites, approximately 5,000 square metres of lettable office space and several destination bars and restaurants. The deal values Riverbank and the all in development cost budget of Hoxton at £542.3m. On completion of the transaction, Clal will become a minority partner and owner of 49% of the shares in one special purpose company holding indirectly the real estate and operations of both Riverbank and Hoxton. PPHE Hotel Group remains the majority owner of the hotels by retaining a 51% holding in the joint venture and, through its management company, has secured a 20-year hotel management agreement in respect of both hotels. The total price paid by Clal in connection with the transaction amounts to £113.7m in cash and a further cash injection of £12.1m to fund its portion of the remaining equity commitments of the Art’otel London Hoxton development project. This consideration, taking into account existing bank debt and remaining development costs, is based on a £263m property valuation for Park Plaza London Riverbank and an all in development budget cost of £279.3m for the Art’otel London Hoxton project. Eli Papouchado, chairman and founder of PPHE Hotel Group, said: “Clal’s investment reflects our mutual confidence in the strength of the London hospitality real estate market. The agreement values these two assets at the group’s latest net asset value and the proceeds will enable the group to pursue new growth opportunities as the pandemic period subsides. The joint venture with Clal comes at a very exciting time as we look to rebuild our business, capitalising on the extensive investment programmes, which we completed just before the pandemic struck.”

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