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Wed 8th Dec 2021 - Update: Hostmore, KFC and SSP
Fridays operator reports Ebitda ahead of comparable 2019 figure: Hostmore – the hospitality business that operates American-themed casual dining brand, Fridays, and the cocktail-led bar and restaurant brand, 63rd+1st – has reported that, for the months of October and November 2021, trading was ahead of the comparable Ebitda achieved in the 2019 financial year. The company stated: “The net booking rate for the Christmas season remains encouraging, with the week up to 5 December 2021 experiencing a net booking rate that was similar to the previous two trading weeks despite the onset of the new coronavirus strain and some inevitable cancellations. At Fridays, since the launch of the themed promotion on 16 November 2021, we have recorded a weekly increase in overall reservations that has resulted in a total, as at 5 December 2021, of circa 205,000 bookings representing circa 676,000 dining covers for the period to 26 December 2021. The group has been able to navigate the well documented recruitment challenges faced by the hospitality sector. All the group's restaurants have been actively trading, with only a small number having their operating hours reduced during the traditionally quieter times of the week. Senior personnel vacancies are at their lowest level since the reopening of indoor dining in May 2021. We pro-actively sought to mitigate both the present and future utilities cost inflation risk by contracting long-term price hedges on both the group's gas and electric supplies in the third quarter of 2020. Using the 2019 financial year volumes as the basis for this decision, the group has hedged: 100% of its gas until December 2023; 100% of its electricity until March 2022; and then 50% of its electricity until March 2023; and then 25% of its electricity until December 2023. The prospectus outlined that a further £971,284 in (covid leasehold) concessions had been agreed from 3 October 2021 to the prospectus publication date. Since the prospectus publication date, legal documentation for further concessions has been concluded with landlords on a further three sites resulting in an incremental concession value of circa £245,000, which will be recognised within the 2021 financial year results. The group continues with its efforts to secure further concessions with landlords and is optimistic that ongoing discussions will result in further concessions being agreed in the next few months. We are also pleased that the equitable approach taken to date with our landlords in respect of lease arrears liabilities is now working in our favour. Working positively with our landlords has resulted in an increasing pipeline of new site opportunities from both existing and new landlords for both Fridays and our new brand 63rd+1st, in line with our objective to develop a multi-brand group. Since the prospectus publication date, we have entered into a binding agreement for a new 63rd+1st site in Cambridge. The site, located in Trinity Street, is expected to open in the first half of 2022. This will be the brand's fourth site, following the successful opening of sites in Cobham in May 2021, Glasgow in September 2021, and Harrogate last month. Four potential new sites for Fridays and a further new site for 63rd+1st are in solicitors' hands. These new restaurants will increase our rate of expansion.” Robert B Cook, Hostmore's chief executive, said: "I am pleased with the progress we have made since the reopening of the sector to internal dining in May 2021. This includes the very positive sentiment of our guests as expressed by the improvement in our guest satisfaction scores, particularly in the categories of service, atmosphere, and drinks and food quality. This coincides directly with the launch of our new food and drinks menus that have been implemented across the whole portfolio. I am also pleased by the resultant average spend per head for the period, which indicates guest appreciation of the quality improvement. Our ongoing trading, considering the very many challenges faced by the sector, both past and present, is a testament to the hard work undertaken by my many colleagues to ensure the guest experience is always enhanced. This result reflects the dedication of all levels with a special emphasis on those at the restaurant level who have tirelessly exhibited a cheerful determination to overcome the challenges for the good of all stakeholders in the group. With regards to the enduring negotiations with our landlords, I would like to signal our appreciation that they have respected this process by engaging with the group in an open and meaningfully constructive manner, which bodes well for successful long-term relationships, post the ending of the rent moratorium which is scheduled to conclude by the end of the first quarter of 2022. The conclusion of this process, combined with the expiry of the rent moratorium, will place the group in a very strong position to take advantage of future opportunities for business development. Finally, I am delighted to be bringing the fourth 63rd+1st location to Cambridge. The 63rd+1st brand represents the coming together of people, culture, tastes and styles, and we are excited to continue sharing this brand experience with a growing number of customers around the UK. We continue to explore further opportunities to build this brand, which has the potential for rapid expansion in light of the opportunities in the market, particularly those new sites which are brought to our attention by landlords who have respected the way in which we have sought to settle the remaining pandemic-related leasehold concession obligations."

Propel Premium Advent Video Calendar to feature Chapati Club founders: Propel has launched its Premium Advent Video Calendar, giving subscribers access to a great video each day in December from our autumn conference series. Each day in December in the run-up to Christmas, Premium subscribers will be sent a video featuring some of the sector’s leading operators, who will share insights, advice and expertise. The next video – which will be sent at 9am today (Wednesday 8 December) – features Resh Sonchhatla and Heena Varambhia, founders of Chapati Club in Acton, who talk about their experience of building a successful restaurant business from scratch and expanding it into a delivery operation – all with no previous experience. Premium subscribers received the fifth edition of The New Openings Database, which is produced in association with StarStock, on Friday (3 December). The database showed the details of 366 newly announced site openings and upcoming launches. Premium subscribers also receive access to two other databases. The latest Propel Multi-Site Database, which is produced in association with Virgate, and the Turnover & Profits Blue Book, which is produced in association with Mapal Group. 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 group editor Mark Wingett. 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. To subscribe, email

KFC reports it stayed profitable in the UK in 2020: KFC has reported like-for-like sales fell by just 1.6% in the UK in the year to 27 December 2020. The company stated: “Following the result of the reduced sales in the second quarter and strong trading since reopening , overall like-for-like sales fell by 1.6% for the full year. Operating profit has reduced year-on-year to £50.7m (2019: £107.9m) impacting on the profit margin also decreasing to 24.4% (2019: 54.7%). However, excluding the impact of one-off items, operating profit was £47.6m (2019: £67.6m) and a margin of 22.9% was achieved (2019: 34.3%). Average number of employees increased by 4% following the strong trading post reopening the restaurants in April 2020.” Turnover was £207.5m (2019: £197.1m) while pre-tax profit was £51.6m (2019: £92.8m). Turnover is split between £119.6m of company store sales (2019: £108.3m) and £87.9m of franchise royalties and fees (2019: £88.7m). 
SSP reports recovering trends – 72% of units open: SSP has reported turnover fell 41.8% to £834.2m in the year to 30 September 2021 compared with the year before. It lost £411.2m (2020: £425.8m loss). The company reported steadily improving revenue trends over the summer and autumn. Revenue averaged 66% of 2019 in the first nine weeks of the new financial year. A further circa 800 units reopened since the beginning of June 2021 as demand has returned, taking the total to circa 1,950 units or circa 72% of the estate. It had a strong second half performance, with revenue recovering from 21% of 2019 levels at the end of the first half to 53% of 2019 by the end of the second half, led by a recovery in domestic and short-haul leisure traffic. Jonathan Davies, deputy chief executive and chief financial officer of SSP Group, said: “Though still in the recovery phase, SSP has made strong progress, particularly during the second half of the year, when we delivered positive underlying Ebitda and strong free cash flow generation. The group has continued to reopen units in line with passenger demand, with 72% of units currently open, and has delivered revenues of 66% of 2019 levels in the first nine weeks of the new financial year. Our teams around the world have demonstrated great resilience during this challenging period and, most importantly, have continued to deliver great service to our customers every day. I would like to thank them for their professionalism, dedication and commitment to SSP. Against the backdrop of volatility and disruption in the travel sector, we’ve maintained strong operational controls and disciplined management of operating costs and cash flow, as has been evident from the financial performance of the business. In addition, as a result of the successful Rights Issue and the extension of our bank facilities completed in April 2021, we have a very strong balance sheet, with significant liquidity of £935m (including the £300m covid corporate financing facility due to be repaid in February 2022). Over the past year, we’ve continued to re-invest in and strengthen important areas of the business, which we believe will underpin our long-term growth, including our customer offer, our people strategy and our technology platforms, and we’ve made real progress in further embedding sustainability into our business. Looking ahead, the medium-term outlook remains unchanged, which is for a return to broadly pre-covid levels of like-for-like revenue and Ebitda margins by 2024. We are now starting to mobilise the pipeline of around 200 new outlets that have already been secured and we anticipate delivering approximately 15% of additional net contract gains over the medium term. Furthermore, we expect to utilise our significant financial capacity and competitive strength to accelerate our new business growth and to capitalise fully on the recovery in the travel sector.” 

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