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Mon 25th Apr 2022 - Update: Just Eat, night-time tzars, AB InBev, Bourne Leisure, job vacancies, Chapel Down
Activist urges investors to move against Just Eat Takeaway’s board: Just Eat (JET) is set for a showdown with investors at next week’s annual meeting, with one top shareholder alleging that the company misled shareholders on its financial firepower ahead of two crucial votes to approve last year’s $7.3bn Grubhub deal. Cat Rock Capital, one of the food delivery group’s top five shareholders, published an open letter on Monday calling on other investors to join it in voting against the re-election of finance chief Brent Wissink and most of JET’s supervisory board, including its chair, Adriaan Nuhn, at the meeting in Amsterdam on 4 May. In the letter, seen by the Financial Times, Cat Rock’s founder and managing partner, Alex Captain, said JET’s management and supervisory boards had “failed all stakeholders”, overseeing a “catastrophic destruction of equity value in the past two years”. Cat Rock’s letter follows an earlier declaration by another JET investor, Lucerne Capital, that it planned to vote against the re-election of Wissink and the six-person supervisory board next week, as well as abstaining from voting to re-elect Jitse Groen as chief executive. Despite the huge boost to food delivery apps provided by two years of sporadic lockdowns, Just Eat Takeaway’s stock has lost more than two-thirds of its value since it announced the acquisition of US food delivery group Grubhub in June 2020. Groen said last week that JET was now assessing whether to sell some or all of Grubhub, less than a year after the deal closed, as well as downgrading its growth forecasts for the year. Captain hopes a new chief financial officer could “restore credibility with the capital markets” after the company underestimated the scale of its losses in the past two years. “JET’s management and supervisory boards torpedoed the company’s share price by providing a misleading outlook on the company’s profitability in advance of the Grubhub shareholder votes in October 2020 and June 2021,” Captain said. “These misleading financial disclosures led to two massive profit downgrades in 2021 and the complete loss of trust in the company’s financial guidance.” JET said its management team “shares investor disappointment in the recent share price performance” but recent actions such as potentially selling Grubhub “are intended to create significant shareholder value”.

Host of burger concepts set to join updated Premium Database of Multi-Site Companies: A host of burger concepts are among the 31 new multi-site companies being added to the next edition of the Propel Premium Database of Multi-Site Companies, which will be released on Friday (29 April), at midday. The updated Propel Multi-Site Database, which is produced in association with Virgate, features Black Bear Burger, which is operated by husband-and-wife team Liz and Stew Down, and has a site at Boxpark Shoreditch, a sit-down restaurant in Brixton Village and its newest venue, at Market Halls’ Cargo Canary Wharf. Also added this month is Ayrshire-based Meat in the Middle, which is owned by brothers Ross and Mark Gilmour and operates sites in Ayr, Falkirk, Irvine, Kilmarnock and Paisley, with a new site in Princes Street, Ardrossan, set to open in the coming weeks. In addition, Brixton-based restaurateurs Michael Lythgoeand Cidalia Rodrigues, who operate restaurant-nightspot Chip Shop, which features burgers and wings alongside street art and hip-hop DJs, have now opened a second site called Brix, will be featured. Also included this month is plant-based fast-food concept Bvrger, which was founded by friends Jeremy Ford-Young and Paul Brothers in 2020 and has sites in Spitalfields Market and Kensington. Premium subscribers will also receive a 2,607-word report on the new additions to the database. The comprehensive database is updated monthly and 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. It features more than 2,000 companies. Premium subscribers will also receive the next edition of the New Openings Database, which is produced in association with StarStock, on Friday, 6 May, at midday. It focuses on newly announced openings and upcoming launches in the sector and is updated every month. The next edition also includes a 11,130-word report on the new additions to the database. Premium subscribers also receive access to the Propel Turnover & Profits Blue Book, which is produced in association with Mapal Group. The Blue Book, which is also updated monthly, provides an insight into UK operator turnover and profitability over five years, profit conversion and directors’ earnings. Premium subscribers also receive the UK Food and Beverage Franchisor Database, which is an exhaustive guide to the companies offering a food and beverage franchise in the UK and will be updated every two months. The first edition features 100 companies, providing insight on the offer, locations, cost and other key details. The first edition provides 27,000 words of content. 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. 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.

Struggling venues want nightlife tsars for Edinburgh and Glasgow: Scotland’s two largest cities must appoint nightlife champions to restore their flagging fortunes, an industry body has said. In recent years Aberdeen, Manchester and London have appointed “night tsars” to boost the hospitality sector. Sadiq Khan, the mayor of London, hired Amy Lamé, the TV presenter, to promote its bars, nightclubs and restaurants, while Sacha Lord, who has created a series of festivals, took on a similar role in Manchester. Aberdeen appointed Scotland’s first night-time economy manager in 2018. The Times reports the Scottish Beer and Pub Association wants similar appointments to be made in Edinburgh and Glasgow and it has also called for measures to support pubs, restaurants and breweries. The association wants hospitality venues to be granted energy price caps and for plans for a workplace parking levy to be put on hold. “Scotland’s beer and pub industry supports 62,000 jobs and contributes £1.75bn to the national economy every year,” said Andrew Lawrence, its president. “The restrictions placed on our members during the pandemic had a severe impact. We fully understood the need to keep people safe but now there must be a path to recovery.” The idea of appointing industry champions has the support of Willie Rennie, the Lib Dem MSP. “Edinburgh and Glasgow are famous for the nightlife,” he said, adding that following London and Manchester would make sure the industry was heard. Last month the Scottish Licensed Trade Organisation said staff absences from covid were still affecting venues.

AB InBev reveals $1.1bn blow from Russian exit: The world’s biggest brewer will take a $1.1 billion financial hit after finally bowing to pressure to withdraw from the Russian market after Moscow’s invasion of Ukraine. The Times reports Anheuser-Busch InBev, which owns brands including Budweiser and Stella Artois, announced that it would be selling its 50% stake in a Russian joint venture to Anadolu Efes, its Turkish partner. Last month, Carlsberg and Heineken, both with big operations in Russia, said that they were withdrawing from the country. The Danish brewer said that it would suffer a writedown of DKr9.5bn (£1.1bn), while its Dutch rival expected to take a €400m hit. AB InBev, which previously had said it was forfeiting all financial benefit from the joint venture, said it was now in “active discussions” over selling its non-controlling interest to its Turkish partner, estimated by analysts to be worth about £2.3bn. Edward Mundy, at Jefferies, said the proceeds would be “modestly helpful for deleveraging, not material to earnings”. As part of the mooted disposal, AB InBev has requested the suspension of the licence for the production and sale of Bud in Russia. It said the $1.1bn blow to its first-quarter results would be a non-cash impairment charge. AB InBev said it had introduced Chernigivske, its Ukrainian beer, to countries including Britain, Germany, Belgium, France and Brazil, with all profits going to support humanitarian relief. The brewer said that it was guaranteeing at least $5m of support from this initiative.

Back to good old days for Bourne’s UK holidays: Britons are continuing to choose staycations for this summer, with bookings up by 20% on pre-pandemic levels, according to the owner of Butlin’s. Bourne Leisure, which also owns Haven Holidays and the adult-only Warner Leisure Hotels, said that its holiday sites in south Wales, Kent, Northumberland and Norfolk had enjoyed the biggest growth in popularity. The holiday company said that people were choosing to avoid the risks of flight cancellations, changing travel rules and airport queues. Paul Flaum, group chief executive of Bourne Leisure, told The Times: “We have seen record levels of bookings and inquiries…which will provide a welcome boost to regional economies.” The average spend per staycation in the UK is £750, said Bourne, which is backed by Blackstone, the private equity firm. Lionel Assant, European head of private equity at Blackstone, said: “With the soaring demand for UK staycations showing no signs of slowing down…we are investing with our partners at Bourne to ensure our holidaymakers can celebrate everything Britain has to offer.” Blackstone said it had committed more than £200 million in extra capital investment, including developing new pitches and upgrading restaurants and facilities. Bourne locations with the biggest rise in bookings compared with 2019 include Lydstep Beach in south Wales, up 92%, and Allhallows in Kent, up 60%.

Job vacancies soar, but not for high skills: The number of job vacancies has risen by a fifth compared with pre-pandemic levels, with particular demand for drivers and warehouse workers. The Times reports the Institute for Fiscal Studies found that unemployed people had more opportunities since the pandemic struck, with vacancy rates 20% above pre-covid levels for almost a year. However, the bulk of new jobs were in lower-paid and lower-skilled sectors, reflecting the shift towards online shopping since 2020. Last month the unemployment rate fell to its pre-pandemic level of 3.9% and there are concerns that high demand for workers and rising consumer prices will lead to higher wages that further entrench inflation in the economy. The IFS research found that even though there were more vacancies, there was “no correlation between vacancy growth in the latter halves of 2019 and 2021 and wage growth over the same period”. The Bank of England has said that several factors, including a fall in migration from the European Union and more people dropping out of the labour market, may have helped to create a smaller total workforce in recent years. This has led to companies complaining of staff shortages and increasing the bargaining power of workers to demand pay rises. Xiaowei Xu, senior research economist at the IFS, said the “shift towards lower-skilled occupations is particularly concerning” and may explain why wage growth has remained muted. Vacancies for drivers rose by 80% in the five months to February and doubled for warehouse workers, the institute found.

High fuel costs, staff absences and supply issues leave half of small firms operating below capacity: More than half of Britain’s small businesses are operating below capacity as high fuel costs, staff absences and supply disruptions bite, according to a survey of private sector firms. The Times reports the Federation of Small Businesses’s quarterly poll of companies found that 55% of the 1,200 surveyed said they were not running at full tilt between March and April, the first survey since the outbreak of the war in Ukraine drove up global energy and food costs. Just under half of companies said they did not expect to grow this year in the face of what the FSB has called a “cost-of-business crisis”. A record 87% of small business owners said their operating costs had risen compared with the same period last year. “Spiralling costs are eroding small business margins at a rate that many have never experienced before, whilst workplace absences are making it hard to operate at full capacity in a tight labour market,” Martin McTague, chairman of the FSB, said. Manufacturing and retail companies reported the weakest business sentiment as they are most exposed to higher energy costs and supply chain disruptions that have been exacerbated by the war in Ukraine. In a sign that more wage growth could help to drive inflation even higher, nearly two thirds of small businesses said they had handed out pay rises over the past year.

Chapel Down FY revenues up 9%: Chapel Down, England’s leading and largest wine maker, has reported a 9% increase in group revenues to £16.93m (2020: £15.56m), for the year to 31 December 2021. Group Adjusted Ebitda was a profit of £1.93m (2020: loss of (£0.02m), while profit before tax was £0.79m (2020: loss of (£7.86m) which includes £0.39m (£6.68m) of exceptional costs associated with the disposal of Curious Drinks Limited and restructuring costs. The company said net cash at 31 December 2021 was £6.38m (2020: net debt of £7.41m) due to the fundraise of £6.88m and the disposal of the beer and cider business (which had a £7.20m positive impact). The business said that its wine sales volumes increased 17% with sparkling volumes up 39% during the year, reflecting the growing demand for its award-winning wines and the strength of its brand. Wine and spirits revenues increased 25% to £16.64m (2020: £13.29m). Andrew Carter, chief executive, said: “We delivered a strong performance with increased revenues, margin expansion, growth across all trading channels and a full year adjusted Ebitda profit of £1.93m. Following the sale of the beer business, Chapel Down is completely focused on being the number one winemaker in the UK. Our wine and spirits business enjoyed record revenues and sold over 1.5m bottles – our largest number ever. This excellent performance results from our brand leadership position in an exciting and growing market; English wine is thriving, and the market continues to grow at a rapid pace. I am very proud of the progress we are making and was delighted with the external recognition of our position as England’s leading wine producer, with multiple medals at The Decanter World Wine 2021 Awards and WineGB Awards for both still and sparkling wines. With an experienced, dynamic and ambitious team in place, we are well positioned for our future growth plans to double the size of our business over the next five years.”

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