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Morning Briefing for pub, restaurant and food wervice operators

Thu 27th Oct 2022 - Update: Gary Usher, PPHE Hotel Group, C&C Group, AB InBev
Chef Gary Usher cancels latest crowdfunding campaign, to launch Kickstarter round: Chef Gary Usher has cancelled his latest crowdfunding campaign, after admitting that for “one reason or another, it’s failed”. Launched through Seedrs in August, Usher was looking to raise £750,000 for his north west-based Elite Bistros business to go toward the “purchase of our first pub; up to £1.5m – develop the new concept, ‘Joya Tapas’ with the aim of opening two sites; £1.5m-plus – further develop our first product line for retail and commercial sales”. The chef, who has previously crowdfunded over £700k on a non-equity basis, was offering 3.61% of equity in the business. The company subsequently acquired the freehold of The White Horse pub in Churton, Cheshire with the aim of creating a successful dining pub with rooms. However, despite raising over £500,000 toward its target, the campaign has now been cancelled. The company said: “The truth is...It just wasn’t working. For one reason or another, it’s failed, and we’re sorry for that. We wanted to offer shares in Elite Bistros and we have big plans and projects we were itching to get started on, and we know you were behind us. But right now, the best thing to do was to cancel, get the funds back in your pockets and move on to something different...Something we know. So, we’re doing a Kickstarter. Stay tuned for details but it’ll go live next week and we’ll be looking to raise £200,000 for The White Horse Pub. We’re in there now clearing it up and getting it ready for trades to come in. We’ll have to adjust our plans slightly, so things like the rooms might take a little longer to happen but we really want this pub open. We’ve had people stopping by every day and asking us when we’re opening! They’re keen! And we are too. So, we hope you’ll stick with us. Sorry again. But thank you for always being on our side.”

One day to go before release of updated Premium Database of Multi-Site Companies, 30 businesses being added: A total of 30 new multi-site companies, operating 190 sites, have been added to the next edition of the Propel Premium Database of Multi-Site Companies, which will be released tomorrow (Friday, 28 October), at midday. The updated Propel Multi-Site Database, which is produced in association with Virgate, includes regional restaurant and hotel operators, growing bakery brands, and expanding franchise operators. Premium subscribers will also receive a 2,200-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. The database now features 2,704 companies. Premium subscribers will also receive the next edition of the New Openings Database on Friday, 4 November, 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 9,000-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, and the UK Food and Beverage Franchisor Database. 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.

PPHE Hotel Group reports elevated London demand over the summer: PPHE Hotel Group, the international hospitality real estate group which develops, owns and operates hotels and resorts, has reported total revenue of £129.6 million in the Third Quarter to 30 September, up 71.1% vs Q3 2021, and up 7.1% on Q3 2019 levels. The company stated: “Performance (was) driven by strong trading throughout the quarter, particularly the London and Croatian summer season, and maintaining focus on room rates. The group’s London assets delivered a very strong quarter, with July and September benefiting from unusually elevated demand. Even after adjusting for this effect, the underlying average room rate progression against Q3 2019 was notable. On a headline basis, average room rates in London for Q3 2022 were up 33.3% vs Q3 2019. The group’s Croatian assets (comprising both hotel and premium campsites) performed ahead of initial expectations over the important summer holiday period. Revenue for Q3 2022 was 17% ahead of the Q3 2019 comparative, with average room rates ahead by 30.8%. For the group as a whole, the average room rate increased to £175.0, up 50.5% vs Q3 2021, and up 30.5% on pre-pandemic Q3 2019 levels.” The company reported good progress on the +£200 million development pipeline, with all development works progressing in line with plans, including London Hoxton (opening H1 2024), Zagreb (opening Q2 2023), Rome (opening H2 2023). Works on art’otel London Battersea Power Station, which will be operated by the group under a management agreement through its hospitality platform, are nearing completion. Analyst consensus forecast range for the year ended 31 December 2022 shows a total revenue of £255.8m – £301.0m and Ebitda of £79.2m – £85.6m. Boris Ivesha, president and chief executive, said: “We are extremely pleased with our continued strong trading performance despite well-documented macroeconomic challenges, perfectly reflecting our successful rates-led growth strategy. Our Q3 performance is now at levels above those pre-pandemic. Occupancy continues to rebuild as travel returns, but our steadfast focus on rates means we are not wholly reliant on high occupancy to generate attractive returns. We have also continued to progress our development pipeline and remain excited about the prospects for our upcoming new hotel openings. While macroeconomic pressures continue to impact our industry, we remain confident about the group’s ability to grow revenues and Ebitda through its rate-led strategy.” 
C&C Group reports First Half sales boost: C&C Group has reported revenue was up 35.6% in the First Half of its financial year to 31 August to 903m euros. Operating profit rose 254.2% to 54.9m euros. The company stated: “The group has grown its revenue share of the customer with revenue per outlet in double digit growth compared to H1 FY2022 and the same period pre-covid-19. Customer service levels have continued to improve with H1 FY2023 average On Time In Full for Matthew Clark and Bibendum of 87% compared to 76% for H1 FY2022.” David Forde, C&C Group chief executive, said: “We are pleased with the group’s resilient and progressed H1 performance, where – despite the challenging economic backdrop – we have delivered significant revenue and operating profit growth. Encouragingly, our profit growth has been coupled with margin expansion as the business returns to a more normalised product/price and channel mix. We are delivering on a number of key priorities outlined at our recent Capital Markets Day; achieving our guided medium-term targets for distribution margins and target leverage. Further, we increased brand investment, grew our share of premium beer, increased revenue per customer, grew our agency brands and also implemented a number of our sustainability initiatives. FY2023 H2 will provide our first unrestricted Christmas trading period for three years, in addition to the upcoming FIFA World Cup, therefore our focus is on ensuring the highest standards of service and stock availability over this period and beyond. However, despite these positive tailwinds, the outlook for H2 is challenging with inflationary pressures on our own margins as well as those of our customers, and the cost of living pressures on the consumer environment in the near-term. The group’s priority continues to be on executing our strategy; enhancing efficiencies to insulate the business from inflationary pressures where possible whilst progressing our sustainability ambitions. This coupled with the strength of the C&C model and its combination of brand power and unique last mile distribution, alongside its robust balance sheet, puts the group in a position of relative competitive strength.”

AB InBev reports strong third quarter in UK business: Budweiser Brewing Group has reported a strong UK Q3 driven by innovation and brand results. Brian Perkins, chief executive, Budweiser Brewing Group UK&I, said: “The team delivered growing volumes this quarter, executing against our consumer-centric strategy. We saw continued digital innovation with the UK launch of BEES, AB InBev’s B2B platform that aims to transform the traditional sales model. Stella Artois remained the #1 Beer Brand in the UK off-trade by volume and value and Budweiser remained the #2 brand by volume and value in the UK off-trade. Corona also retained its position as the #1 World Beer by volume and value in Q3 in the UK off-trade1 and Leffe maintained its #1 position within the specialty segment. Stella Artois Unfiltered saw continued market share growth in Q3]. The brand launched in the on-trade this quarter, and built distribution in highly influential venues, including the recently awarded Urban Pub of the Year. Stella Unfiltered market share continued to grow, reaching 2% of the Super-Premium segment with penetration following a similarly positive trend. The ‘Beer, au naturel’ campaign continued across TV, OOH and Digital, with investments reaching 98% of UK adults 19 times. The Stella Artois Unfiltered TV ad performed in the top 10% of all ads in the UK for Involvement. This has been backed by a comprehensive sampling campaign, with over 120k samples given out through a combination of online and delivery sampling, as well as nationwide event sampling with an Unfiltered tank beer van. Corona also continued its strong performance this quarter. The brand brought a new marketing campaign, Golden Hour, to the UK to encourage UK consumers to ‘log off and lime in,’ treating themselves to an ice-cold Corona after a long day’s work. The campaign included digital proximity billboards driving footfall to draught outlets, time-banned communications and a geo-targeted social media campaign encouraging UK consumers to choose Corona when relaxing with friends after work. The brand also continued its partnership with coral reef restoration organisation Coral Vita, using Corona bottles to drive awareness and donations for the cause using an on-pack donation mechanic. Corona Tropical continued to build on its strong launch performance, inviting consumers to enjoy the refreshment and quality of Corona now in a Beyond Beer format. We remain excited about our continued volume and market share growth in the NABLAB category. Corona Cero became the 5th biggest NABLAB brand in volume this quarter, supported by a widespread sampling campaign and Nature Exchange pop-up in London, where consumers could swap their fizzy drinks for a 100% Natural, 100% refreshing, 0.0% alcohol alternative.”

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