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Mon 4th Apr 2022 - Update: Fulham Shore update, consumer confidence falls, BrewDog, gender pay gap
Fulham Shore expects to FY figures to be “comfortably ahead” of expectations: Fulham Shore, the owner of Franco Manca and The Real Greek, has said that it expects to report that revenue, Ebitda and adjusted headline Ebitda for the financial year ended 27 March 2022 to be ahead of last year’s figures and “comfortably ahead of market expectations”. In a trading update, the company said that following the removal of all restrictions in February 2022, customers have continued to return to the group’s restaurants in increasing numbers, “reflecting the fantastic quality and value of the Franco Manca and The Real Greek propositions”. It said: “During the second half of the financial year both Franco Manca and The Real Greek businesses delivered strong underlying performances. This was achieved despite periods of disruption, including the UK government’s guidance to work from home due to the Omicron variant. The group also made excellent progress against its UK expansion plans by opening ten new restaurants, including Franco Manca pizzeria in Blackheath and Baker Street in London, and sites in Bishops Stortford and Cheltenham. The Real Greek opened three new restaurants in Bluewater Kent, Corn Exchange Manchester and The Trafford Centre Manchester, all of which opened in the second half, were received very well by customers and have enjoyed strong trading momentum since opening.” In line with Fulham Shore’s international strategy, two franchised Franco Manca restaurants were also opened during the period, in Athens, Greece. The company continued: “Input costs rose throughout the year due to increased transportation costs, raw materials and the impact of covid-19 disruption. However, these were mitigated through small price increases and generated better results than the board had previously anticipated at the half year. This strong trading momentum and expansion drove a significant increase in revenue, comparable with the levels seen pre covid-19. As a result, the board expects to report that revenue, Ebitda and adjusted headline Ebitda for the financial year ended 27 March 2022 will be ahead of last year’s figures and comfortably ahead of market expectations.” Fulham Shore said it believes that market expectations for the year ending 27 March 2022 are currently revenue of £73.4m, Ebitda of £16.5m and adjusted headline Ebitda of £9.5m. The company’s net cash position before lease liabilities recognised under IFRS 16 as at 25 March 2022 was £4.0m (2021: net debt of £3.6m). The group has undrawn bank facilities of £15.9m. It said that its planned openings have been and will continue to be financed primarily by internally generated cash flow. The company said: “A 24th The Real Greek restaurant is within days of opening in Newcastle. 5 new Franco Manca pizzeria are in development, in Stockbridge Edinburgh (our second in that city), Kingston upon Thames, Canterbury, and in Manchester, both on King Street and in Didsbury. The group continues to secure desirable sites at favourable rents, supported by high vacancy rates and lower rents than at the peak levels seen in 2019. 19 proposed new Franco Manca sites are in legal negotiations and are planned to open in the summer and autumn of 2022. The Real Greek is also in legal negotiations for five new sites around the country. The outlook for costs, be they utilities, raw ingredients or labour presents challenges for all operators within the sector. In addition, the reduced VAT rate and hospitality business rates relief both ended on 1 April 2022. Thanks to its brands’ affordable, value-for-money proposition, the group is well placed to offset these increased costs through increased menu pricing, which, when they occur, will be implemented to cover costs rather than increase margin. As customer numbers continue to grow and trading continues to be robust, the group plans to open around 18 new restaurants across both brands in the financial year ending March 2023 and will review this opening programme at the half year. The board is very encouraged by the strong performance achieved by the group during FY22 and underpinned by its two relevant businesses, their value-for-money propositions and the clear growth opportunities, remains confident of its exciting potential.”

A total of 386 new openings detailed in next edition of The New Openings Database, 19,100-word report included: A total of 386 openings will feature in the next edition of The New Openings Database, which is produced in association with StarStock. The database will be published on Friday (8 April) at midday. The database shows the details of which company has opened a site or its plans to open one in the future. It will have details on what type of site it is and its location. There will also be a website link to the businesses so you can find out more about them. It is published on a monthly basis. The eighth edition of the database features The Thin White Duke, a cocktail bar inspired by legendary musician David Bowie, which has opened in London’s Soho. In addition, Komo, the Surrey-based independent cocktail bar company, which has announced it is opening a second site this month, in Woking’s Victoria Place, will be featured. Also included is Blinker, which is owned by Dan Berger and is opening in Manchester’s Spring Gardens next month. Meanwhile, bar entrepreneur Ryan Chetiyawardana, aka Mr Lyan, has opened a new cocktail bar called Seed Library, at the Lore Group’s One Hundred Shoreditch hotel. Premium subscribers will also receive a 19,100-word report on the new additions to the database. Premium subscribers also receive access to two other databases. The latest Propel Multi-Site Database, which is produced in association with Virgate, was sent to Premium subscribers on Friday (1 April). The database contained 69 new companies, bringing the total number of businesses listed up to 2,407. The 496 sites run by those 69 new additions means the entire database of sites has reached 64,884 sites. Premium subscribers also received a 5,000-word report on the new businesses added. 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. Premium subscribers also receive the Turnover & Profits Blue Book, which is produced in association with Mapal Group. The Blue Book, which is also updated every month, provides an insight into UK operator turnover and profitability over five years, profit conversion and directors’ earnings. Premium subscribers are also to be given exclusive access to a new database this month. The UK Food and Beverage Franchisor Database will be an exhaustive guide to the companies offering a food and beverage franchise in the UK and be updated every two months. The first edition will feature more than 100 companies, providing insight on the offer, locations, cost and other key details. The first edition will feature more than 100 companies, providing insight on the offer, locations, cost and other key details. The first edition provides 27,000 words of content. 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 single subscription rate is £445 plus VAT for operators and £545 plus VAT for suppliers. Email to upgrade your subscription.

Sudden fall in consumer confidence: The mood among consumers about their finances has fallen to its lowest level since the first covid-19 lockdown, according to a new survey. The Times writes that concerns about rising prices and the cost of living have pulled consumer sentiment down to -20 on an index tracked by PwC, the accountancy firm. This is a fall from +8 during the same period last year and is only just higher than the -26 reported at the start of the pandemic. PwC said that there had been a “complete reversal” in consumer priorities compared with a year ago, when households were preparing to spend once lockdown restrictions were eased. The firm surveyed just over 2,000 people between 19 and 21 March. It said that sentiment had declined across all age groups, with people preparing to spend less on eating out, buying clothes and going on holiday but bracing to spend more on groceries because the price of food was going up. Lisa Hooker, consumer markets leader at PwC, said: “The shift in sentiment is both significant and sudden. Whilst there is still some post-covid recovery, spending expectations on eating out and going out have plummeted as consumers look to tighten their belts as they face up to cost-of-living pressures.” Separate research has warned that discretionary spending will fall by up to £850, or 19.5%, for the least affluent households in 2022 and by an average of £430, or 6.5%. This equates to a £12 billion hit to non-essential spending in 2022, according to the report by Retail Economics and HyperJar, the digital wallet and savings app. Richard Lim, chief executive of Retail Economics, said: “We’re likely to see recessionary behaviours kick-in for many households, who will cut back on the nice-to-haves and will prioritise low costs to make their budgets stretch that little bit further. A more cost-conscious consumer will emerge in the coming months, looking to form new relationships with brands that can align to these new priorities.”

BrewDog in row with HR adviser: A row has erupted between BrewDog and a human resources consultancy that offered to improve relations between the beer brand and its staff. The Times reports Allan Leighton, BrewDog’s chairman and the former boss of Asda, has accused Hand & Heart of “amplifying attacks” on its management team and has declined to take part in a proposed reconciliation programme. In a letter to Kate Bailey, Hand & Heart’s managing director, Leighton said he was concerned about a platform that had been set up for BrewDog workers, claiming it was “encouraging participants to submit malicious content…The unavoidable impression is that of H&H charging the company to extinguish a fire it is fuelling itself”. BrewDog’s treatment of staff came into focus after more than 100 former employees published an open letter last June criticising the culture of BrewDog. Co-founder James Watt apologised after the complaint by former staff, who went by the name Punks with Purpose. An internal review was launched, with Leighton brought in to oversee changes. Hand & Heart has set up a platform on its website where it says that BrewDog workers can independently register their experiences with the company “to assist Punks with Purpose in their core mission of tackling BrewDog’s cultural issues”. The consultancy had not been formally hired by BrewDog. The letter from Leighton was first reported by The Mail on Sunday. In it he also raises concerns about paying Hand & Heart “significant” fees to manage a reconciliation programme. Bailey said: “BrewDog issued a letter to me and my company that was filled with malicious, unfounded accusations designed to discredit me and my work. I published two lengthy and evidence-based factual rebuttals on my website. The letter and its dissemination, in my professional opinion as an experienced workplace consultant, is a failure of leadership and corporate governance who seemingly cannot comprehend the paper trail of facts that easily refute their claims, or how that would reflect on their company in the future. For the sake of BrewDog’s workforce and the many people exhausted by this situation, I do wish BrewDog could focus on the individuals who have alleged being harmed in their workplaces and make it right with them, and growing into a thriving global company – instead of spending their time attacking me and my company on false grounds.” BrewDog confirmed the letter had been sent but did not comment further.

Enforcement threat over gender pay gap reporting: Employers that miss the gender pay gap reporting deadline for a second consecutive year will face “formal” enforcement action and could be named and shamed, the Equality and Human Rights Commission has warned. The alert comes ahead of a deadline today for private and voluntary sector employers and after one for most public sector employers last Wednesday. The commission issued warning notices to 1,400 employers that failed to report by last year’s extended deadline, which included a six-month grace period to October because of the pandemic. Warning notices were sent to more than 1,100 private sector employers and to 200 public sector employers and by late last month had led to 99%of those employees taking the “steps they needed to comply with the gender pay gap regulations”. The commission is warning organisations that failed to report their gender pay gap information for the October 2021 deadline that it “will consider taking formal enforcement action against repeating non-reporters once the 2022 reporting deadlines have passed”. Its enforcement powers range from entering a legally binding agreement, committing the organisation to an action plan and launching a formal investigation if it suspects illegality. The gender pay gap widened last year, despite the furlough scheme flattering the performance of some sectors, analysis by The Times a year ago suggested. Figures at the time showed that a woman earned 89p for every £1 that a man earned, on average. It meant that the pay gap widened to 11.1% in 2021, up from 10.6% the year before, 9.5% in 2019 and 9.3% in 2018.

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