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Morning Briefing for pub, restaurant and food wervice operators

Mon 11th Apr 2022 - Update: Tortilla, Nightcap and Fentimans
Tortilla reports like-for-likes up 20.1% year-to-date, sees runway for growth to 200 sites: Tortilla, the UK’s largest fast-casual Mexican restaurant brand, has reported like-for-like growth of 20.1% year to date, which the company said was in line with expectations. The business outlined its investment case as part of plans to grow to 200 sites. One new site opened in the first quarter of 2022, one in April and at least seven further site openings are planned, underpinning the board’s confidence in delivering the group’s target of 45 openings by the end of 2026, the group said. Tortilla said it has successful launched a franchise partnership with Compass Group – four university locations are now trading – Brunel, Swansea, Middlesex and Sussex – with plans to open at least ten more over the next five years. The business said it was well-positioned to navigate macroeconomic pressures, supported by a strong brand, value-for-money proposition and flexible operating model. Tortilla added it has a “very strong platform for continued growth and strategic progress”. Reporting its maiden full-year results since its stock market float last year, chair Emma Woods said: “Fifteen years [after launch] we have a proven model, operating across 64 sites, and customers are increasingly favouring our food-type and brand. We always have queues when opening new restaurants which highlights the wide appeal of our offer. The current property market is giving us access to a very strong pipeline of new sites and we are confident of opening at least 45 locations over the next five years. The product is still made fresh and our central production kitchen allows us to ensure the quality and consistency of sauces and recipes. Given how well the product travels on delivery (not all restaurant food does) this is now a major and growing sales channel within the business. To date we have opened five delivery-only kitchens and plan to open circa three to four more per year going forward. Finally, the business was early to test franchising, with ten sites established across the Middle East in the United Arab Emirates and Saudi Arabia, through a partnership with Eathos. Tortilla has gained confidence in its franchising systems and has extended its franchisee partners to SSP and then Compass, in the UK. This ability to franchise clearly gives us further growth opportunities in unchartered locations to supplement our own expansion. For me, as chair, what excites me about Tortilla is the headroom for growth – with clear customer white space and the proven flexibility of how the Tortilla brand can present itself to customers.” The company saw a pre-tax profit of £2.3m for the year ending 2 January 2022 versus a loss of £1.7m the previous year. Adjusted Ebitda (pre-IFRS 16) increased 262.5% to £8.7m (2020: £2.4m, 2019: £2.5m). The business had net cash of £6.7m at the period end, supporting its ability to self-fund roll out plans. As previously reported in January, the business saw a 23.8% increase in like-for-like revenue, compared with the same period in 2019. Group revenue increased 79% to £48.1m (2020: £26.8m, 2019: £35.4m). Further growth was driven by the addition of seven UK company-operated restaurants and two UK franchise restaurants, taking Tortilla’s estate to 64 stores globally. During the period the company launched a partnership with Merlin Entertainments at Chessington World of Adventures, as well as opened two further sites in partnership with SSP Group at Gatwick Airport and Skelton Lakes motorway services. Tortilla opened new stores in Edinburgh, Exeter and Windsor and new delivery kitchens in Balham, Manchester and Brent Cross. Chief executive Richard Morris said: “Capping off a transformational year for Tortilla, we are very pleased to announce a record financial performance for the group’s maiden annual results following its successful initial public offering in October 2021. During the year we made excellent progress in delivery of our long-term growth strategy. We opened further sites in line with our UK roll out plans, expanded our delivery kitchen estate to fulfil growing customer demand, and both extended and launched franchise partnerships which introduced the Tortilla brand to even more customers across the UK. I would like to take this opportunity to thank our teams both in the UK and internationally for their commitment and hard work during the year. This strong financial and operational momentum has continued into 2022 and underpinned by our flexible model, value-for-money offer and clear long-term growth strategy, we are very excited to capitalise on the growth opportunities presented by the post-pandemic landscape. We remain confident of delivering our exciting plans for Tortilla to the benefit of all stakeholders.”

Propel to launch UK Food and Beverage Franchisor Database this week, featuring 100 companies and 27,000 words of content:The first edition of The UK Food and Beverage Franchisor Database will be sent to Propel Premium subscribers on Thursday (14 April). The first edition will feature more than 100 companies, providing insight on the offer, locations, cost and other key details. The first edition provides more than 27,000 words of content. It will be updated every two months. The companies included in the initial database are: Afrikana, I am Doner, Bewiched Coffee, Black Sheep Coffee, Boom: Battle Bar, Bubblewrap, Burger King, Burger Priest, Cabana, Camile Thai, Caprinos Pizza, Chaiiwala, Chilli Flames, Choppaluna, Chopstix, Chow Asian Kitchen, Coffee-Bike, Cosmo, Costa Coffee, Coyote Ugly, Creams Cafe, Crepeaffaire, Deep Blue Restaurants, Denny’s, Dickey’s Barbecue Pit, Domino’s Pizza, EasyCoffee, Eddie Rocket’s, Esquires Coffee, Fireaway Pizza, Flower Burger, Franco Manca, Franzos, Four Star Pizza, Fresh, Favorite Chicken, GB Pizza Co, German Doner Kebab, Gloria Jean’s, Gravity, Greggs, Heavenly Desserts, Island Poke, Jamie Oliver, Ji The Chicken Shop, Jon Smith Subs, Kaspa’s, KFC, Kokoro, Leon, Le Pain Quotidien, Love Brownies, Marugame Udon, McDonald’s, Miss Millie’s, Muffin Break, Nando’s, Oche, Oodle’s Chinese Restaurant, Otherworld, Papa John’s, Pieminister, Pitaya, Pizza Hut, Pret, Russo’s New York Pizzeria & Italian Kitchen, Santa Nata, San Carlo, Shoryu Ramen, Slim Chickens, Slim’s Healthy Kitchen, Smoothie Factory, Soho Coffee, Southern Fried Chicken, Spitting Pig Co, Starbucks, Street Greek, Sticky Sisters, Subway, Tasters, Taco Bell, The Avocado Show, The Butcher, The Great Greek, Toni Loco, Tortilla, Tossed, TRG Concessions, Treatz, Veggie Master, Veeno, Wagamama, Warrens Bakery, Wayne’s Coffee, Wendy’s, Wimpy, Wok & Go, Wok To Walk, YO!, Yole and You Me Sushi. Email to get your franchise included. Premium subscribers also receive access to The New Openings Database, the Propel Multi-Site Database and the Turnover & Profits Blue Book. 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.

Nightcap – we have 24 premises under offer or in legal negotiations, confirms Liverpool opening for Tonight Josephine: Nightcap, the owner of The Cocktail Club, the Adventure Bar Group and the Barrio Familia group of bars, has confirmed it will bring its Tonight Josephine brand to Liverpool later this year. Nightcap now has 32 sites within its estate and revealed it has a further 24 premises under offer or in legal negotiations for all of its brands and “continues to see favourable market conditions for site acquisitions across the UK”. As revealed by Propel in November, the latest site for Tonight Josephine is located at 85-89 Hanover Street. The site covers about 7,893 square feet split across a ground floor entrance, basement and lower basement and has an unrestricted capacity of 350. Its licensed hours are 2am Monday to Thursday and 3am Friday and Saturday. The opening will be the first for the group in Liverpool and the second new site for the Tonight Josephine brand in recent weeks, following the opening in Cardiff last week and is the sixth site for the brand in total. It takes the total number of sites within the Adventure Bar Group to 11. Sarah Willingham, chief executive of Nightcap, said: “The Tonight Josephine brand is ready to continue its rapid roll-out across the UK. We opened in Birmingham, Clapham and most recently launched in Cardiff, with several sold out events and evenings from the outset. All of these sites have traded very well since opening and we now cannot wait to start trading our sixth Tonight Josephine in Liverpool.”

British Chambers of Commerce boss demands chancellor helps businesses out of crushing cost-of-living crisis: Chancellor Rishi Sunak must help businesses out of the “crushing” cost-of-living crisis, the head of the British Chambers of Commerce (BCC) has demanded. Shevaun Haviland had already railed against the rise in national insurance contributions, brought in last week, claiming this would push struggling firms to the brink. Now, Haviland is pushing the Treasury to ease some of that pressure and help firms urgently with their ballooning energy bills. “Last summer businesses were already saying there was an increase in raw materials and shipping costs,” she told the Mail. “Recruitment was so hard, and into December energy prices started to tick up. National insurance contributions have risen this month, and that was before the situation in Ukraine saw energy prices go off the scale. This is not business as usual, it’s very serious. We just wanted another year for businesses to get back on their feet.” The BCC director general wants Sunak to axe the national insurance rise, which hits employers and workers, as soon as possible. The chancellor should also impose a cap on energy bills for small and medium-sized businesses, she added, since many firms that usually pay a monthly contract are being moved on to expensive variable tariffs. Sunak ought to consider energy rebates, giving small firms money off their bills, and a moratorium on extra costs such as VAT and business rates until the worst of the crisis is over. Haviland said: “Business owners don’t want the Chancellor to prop them up. But he should be taxing growth, not adding on more costs when firms are really struggling.” Doron Zilkha, founder of London cafe company Quarter Group, said he had never seen anything like the jump in costs in 25 years in hospitality. He told the Mail: “Am I going to keep absorbing these costs? Am I going to have to shut my doors and lay off staff? Are we going to see a total shrinkage of the hospitality industry? I’ve been in this sector since 1997. I’ve lived through many recessions. But where we are headed to now, the divide is beyond anything I’ve seen.”

Fentimans reports revenue and profit rise: Botanical brewer Fentimans has seen profits and revenues rise despite a catalogue of challenges. Accounts for the year ending 31 December 2021 showed sales of £44m, a 20% lift on the previous year, while operating profit saw a sixfold increase from £260,535 to £1.61m. Pre-tax profit came in at £1.6m, up from £212,272. Group chief financial officer Daniel Tobin said: “The group has demonstrated its resilience by trading strongly through these unprecedented challenges and the board would like to take this opportunity to thank all our stakeholders and especially our employees for their efforts through this difficult period.” In January last year, the company said it was looking to grow sales in the US after moving away from a distributor model and setting up a new wholly-owned trading subsidiary. Latest accounts show the group’s US business delivered 38% growth in its second year of trading, achieving gross sales of £4.4m, and has continued to build momentum throughout 2021 despite covid restrictions and is starting to establish itself well in some of the country’s well-known retailers. Despite the sales rise, the US business posted a small loss for 2021, reflecting a second year of operational investment and the impact of increased shipping costs in the market. During the year Fentimans said it had continued to invest in new product development as it increased consumer awareness of the brand. Looking ahead, Tobin said the business was well placed to weather disruption. He added: “The group has robustly absorbed and addressed the challenges of the past couple of years while continuing to trade well and maintain a strong operational cash flow. Consequently, the board is optimistic the group will continue to protect its position against these continued challenges, a number of which are built into the 2022 plan, and indeed continue to deliver year-on-year growth.”

Job of the week: Award-winning hospitality, leisure and events group Boxpark has two job opportunities within its marketing department. The business is seeking an experienced head of marketing with an events and music background who can deliver strategic and impactful marketing campaigns from conception to completion. Responsibilities will include planning and delivering monthly and seasonal campaigns, managing and developing Boxpark’s Black Card digital loyalty programme, developing a CRM strategy and overseeing all digital, social, and PR campaigns. In addition, Boxpark is looking for a digital marketing manager with a hospitality, entertainment or sports background who can manage all digital channels and data analytics, drive email marketing campaigns, and develop SEO and pay-per-click strategies. This is a specialist role, and the ideal candidate will have experience using marketing automation tools, CRM software and CMS platforms. Boxpark is a fast-growing, ambitious company and candidates must be able to work flexibly in a dynamic, start-up style environment. For further information, and to apply, click here.

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