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Morning Briefing for pub, restaurant and food wervice operators

Tue 4th Jan 2022 - December sales, and results at Everards, Beds and Bars, Swingers and Dirty Martini
Sector sales down 12% in December: Hospitality sales last month were down 12% compared to December 2019, according to the latest data from S4labour, the online labour-scheduling management system from Catton Hospitality. London sites’ sales were hit the hardest as like-for-likes fell by 23% on 2019 levels. Non-London sites also saw downfalls, however by a lesser figure of 10%. As for specific dates, London’s sales dropped on all occasions on 2019 levels: Christmas Eve sales were down 38%, with drink-led sales down 40%; Christmas Day sales were down 23.5%; Boxing Day sales were down 25%; and New Year’s Eve sales were down 11.5%. Non-London sites, however, were much less affected on specific holiday occasions. Christmas Eve saw food-driven like-for-likes increase by 3.5%, while Christmas Day’s overall sales were down 11.5% on 2019 for sites outside of the capital. Both drink and food sales experienced declines, with sales down 11.5% and 13% respectively on 2019 levels, during the month. Richard Hartley, S4labour’s chief innovation officer, said: “December has been an incredibly difficult month for the sector yet again. As we enter further into the new year, it is important that no more restrictions are imposed on the sector.”

Next edition of sector profitability guide, featuring 500 companies, shows the toll of pandemic losses: The next edition of Propel’s Turnover & Profits Blue Book, which is updated monthly for Premium subscribers, will feature more than 500 companies when it is published on Friday 14 January at midday. The next edition shows the pandemic’s effect on the sector with 321 companies making a combined loss of just over £8bn. A further 186 companies are in profit, making a total of £797m – about one-tenth of the losses. Total turnover of the 500 biggest sector companies stands at £28.5bn. The Blue Book, which is produced in association with Mapal Group, provides a five-year overview of turnover and profit, ranking companies according to turnover, pre-tax profit and profit conversion. It also provides details of directors’ earnings and highest paid directors. Premium subscribers also receive two other databases – the New Openings Database, produced in association with StarStock, and the Multi-Site Operators Database, produced in association with Virgate, which are also updated each month. 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 single subscription rate is £445 plus VAT for operators and £545 plus VAT for suppliers. Email to sign up. 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.

Everards saw pub sales at 90% of 2019 levels in first quarter of new financial year: Leicestershire-based brewer and retailer Everards saw sales levels across its circa 150-strong pub estate reach 90% in the first quarter of its new financial year compared to 2019, as Plan B measures impacted momentum. The company said its performance had improved “markedly” over the first two months of its new financial year (October and November 2021), with its pubs performing at 96% of like-for-like trade compared to the same period in 2019. However, the company said that the introduction of Plan B measures by the government in December 2021 impacted on the momentum built with sales to pubs trading at 81% compared to December 2019, bringing its Q1 like for like position down to 90%. The company said that trading restrictions for nine months of the year resulted in an operating loss of £3.4m for the financial year ending September 2021 (£1.3m loss year ending September 2020). It said this was driven by the reduction in the volume of drinks supplied to the pub estate but also significant cancellations of rental income. Stephen Gould, Everards managing director said: “Clearly a tough financial year but our employees and business owners have been remarkable while faced with unprecedented challenges. We have and will continue to invest in our people, communities and business. Our level of pub vacancies is very low after nearly 21 months of disruption, and interest in joining our company as an employee or business owner has never been stronger. December is a time when our business owners build cash reserves to deal with lower trade levels in the first quarter of the new year. Due to Plan B restrictions which impacted consumer confidence, in many pubs this will not have been possible. Everards will continue to work closely with all business owners to support at pub level. Planned government support by way of grants for business owners is appreciated but sadly does not go far enough. We invite the government to invest in a sector which is so important to a thriving UK economy by: Suspending business rates for Quarter 1 2022 for all hospitality businesses and agree to review the 2022/23 cap; prolonging the reduced rate of VAT until at least the end of June 2022 – ahead of a review looking at a permanent reduction; and ensuring brewers are within scope for compensation grants and rate relief.” The company completed phase 2 of its Everards Meadows development in the Summer of 2021 delivering 2 new breweries (main and small batch), a beer hall, shop and offices. Gould said: “Trading in our beer hall and shop has been excellent and it’s been great to welcome our employees back to purpose-built offices. I am pleased to report that all Everards beers have been successfully commissioned in our new brewery and since November 2021 are now all brewed at our Everards Meadows home. Our sincere thanks go to Robinsons Brewery, Purity Brewery and Joules Brewery who have done a fine job brewing our beers since we closed our old brewery in July 2017.” 

Beds and Bars reports £11m loss after pandemic wipes 90% of turnover, trade recovered to 90% of pre-covid levels: The pan-European hostel company Beds and Bars, led by Keith Knowles, has reported turnover dropped to £5,710,987 in the year to 27 March 2021 compared to £55,313,400 the year before. The company made a loss of £11,293,973 before tax compared to profit before tax of £1,011,856 the year before. It stated: “We have recovered trade to over 90% of pre-covid levels but new variants are concerning.” The company thanked its landlords, its bank, HSBC, and suppliers for being supportive – and hailed the unfailing commitment and flexibility of its magnificent staff. It added: “We were disappointed that our insurers refused our claim for business interruption cover and whilst we entered into a class action to overturn their decision, this was overturned on appeal. As we write this strategy review business returned rapidly from July 2021, with pent-up demand returning at both accommodation and food and beverage to near 2019 levels. However, there are substantial headwinds in our sector, with covid-19 still high across Europe and renewed restrictions being put in place in the Netherlands and Belgium. We can’t discount further restrictions being imposed.”

Anglian Country Inns reports loss in year restricted to 20 weeks of full trading: Gastro-pub operator Anglian Country Inns, led by James Nye, has reported a loss before tax of £720,000 on turnover of £5,374,917 in the year to 4 April 2021. The company stated: “Covid restrictions to trade affected this year with sites closed for 32 weeks. We were able to maintain some regular revenue through our Hermitage Road coffee shop and limited takeaway business, but the business is not ideally suited to takeaway and the coffee shop is a small part of our trading. Notwithstanding these enforced closures we were able to generate £5.4m of sales in the periods we were able to open. These revenues are 52% lower than 2020 although we were only open 38% of the year. Although a little artificial given the trading restrictions, site Ebitda for the year was £1m (2020: £1.7m). Since re-opening in mid-April, we have seen strong demand across most sites which, together with the VAT concessions, has helped us recover our financial strength. Part of the additional demand was organic due to adding to the trading capabilities of outside space at several sites, in particular the White Horse in Brancaster Staithe and the Fox at Willian. The Norfolk sites saw the benefit of a significant increase in ‘stay at home’ tourism.” The company sold its Water Lane site in Bishop’s Stortford for net sale proceeds of circa £726,000 after its year-end.

Swingers operator plunges into red during pandemic: Swingers operator Competitive Socialising has reported closure for 65% of the time in the year ended 27 December 2020 caused turnover to drop to £4,254,520, compared to £12,321,051 in the eight month period beforehand. It made a loss of £3,999,091 compared to a profit of £844,289 in the eight months prior. The company stated: “The board has taken every step possible to manage the business in order to reduce the cost base, and to access government support. It has enacted measures to significantly reduce the operating expenses (including staff, marketing and rent) within the existing sites and head office in the UK. For the UK venues during periods of closure each venue has operated with one to two employees in order to maintain the sites.”

Dirty Martini operator receives £2.2m insurance pay-out: Dirty Martini operator CG Restaurants has reported it received a £2.2m insurance pay-out following the Supreme Court judgment on the validity of covid-19 insurance cover. The company reported turnover dropped to £9.78m in the year ended 31 December 2000 (2019: £27.23m). Group Ebitda was minus £3,925,365 (2019: £1,455,004). Its Fire & Stone subsidiary also went into creditors’ voluntary liquidation on 19 October 2020. The company reported a “surge in consumer demand” following the lifting of restrictions in 2021 and the business benefited accordingly. The company has acquired a 12th Dirty Martini site in Bristol.

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