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Morning Briefing for pub, restaurant and food wervice operators

Wed 11th Jan 2023 - Update: Nightcap, Ten Entertainment, City Pub Group
Nightcap reports record trading weeks across group, delivers 60.9% quarterly revenue growth and 4.7% lfl growth despite train strikes: Nightcap – the owner of The Cocktail Club, the Adventure Bar Group and the Barrio Familia group of bars – has reported record trading weeks across the group for the 13 weeks ending 1 January 2023, with quarterly 60.9% revenue growth and 4.7% like-for-like growth. Unaudited group revenue of £12.9m for Q2 FY2023 resulted in a 60.9% increase compared to £8m for Q2 FY2022 and a 4.7% like-for-like increase compared to the same period in FY2022. Group revenue for December 2022 was £5.9m, resulting in a 71.8% increase compared to group revenue of £3.4m for December 2021 and a like-for-like increase of 27.6%. For the 26 weeks ended 1 January 2023, unaudited group revenue was £23.2m, resulting in a 49.2% increase compared to £15.6m for the equivalent period in FY2022. Revenue for the period represents a 5.8% like-for-like decrease compared to the equivalent period for FY2021, primarily due to the rail strikes, and a 10.1% like-for-like increase compared to the equivalent period in FY2019. Sarah Willingham, chief executive of Nightcap, said: “As we approach our second anniversary since our IPO, I could not be prouder of the entire Nightcap team. To achieve quarterly growth of 60.9% in revenue and 4.7% growth on a like-for-like basis represents a monumental effort, not least during a time when rail unions deliberately chose a number of the biggest most important weeks and weekends for hospitality, for their series of significant rail strikes, including the incredibly important Christmas weeks. During the first half of our current financial year, we also successfully opened another six phenomenal bars across the country, while also delivering record breaking amounts of corporate Christmas parties and a New Year’s Eve which was sold out across most of our 36 sites. This result is a testament to the resilience of our high disposable income Millennial and Gen Z customers, who continue to enjoy social interactions in a fun party atmosphere in our bars across the country.” During the first half of FY2023, Nightcap opened six new sites across three of its key brands, taking its total number of bars to 36. The new sites include The Cocktail Club bars in Birmingham and Canary Wharf, Tonight Josephine venues in Bristol and Liverpool, and Barrios in Covent Garden and Watford. It also has closed The Cocktail Club’s site in Bethnal Green, London, a ‘legacy site’ which was used as the initial Nightcap training academy and was not trading to the public at the time of closure. The closure will have a small positive impact on the group’s future trading. The group’s cash position on 1 January 2023 was £5.5m, with total bank debt of £9.6m, resulting in a net debt position of £4.1m. A total of £750,000 of the bank debt is scheduled for repayment during FY2023. “The group has started 2023 with a portfolio of bars that continues to prove very popular with its target customers,” the company added. “The board looks forward to the second half of the financial year with confidence, and in the absence of further rail strikes or other major interruptions, the board expects the group to trade in line with management’s expectations.”

Propel Turnover & Profits Blue Book shows total sector losses reduced to £3.9bn as industry slowly rebuilds: The next edition of the Propel Turnover & Profits Blue Book shows sector companies have reduced their collective losses to £3.9bn – down from £4.2bn in November, as the industry slowly rebuilds. The next Blue Book, which will be released on Friday (13 January), will feature 692 companies that are turning over a collective £35.4bn. The Blue Book shows 406 companies in profit and 286 reporting losses. The Blue Book is updated each month and ranks companies by turnover, profit and profit conversion, listing directors’ earnings for the past five years. Propel is to add a fifth major database to its Premium service this month. The Who’s Who of UK Food and Beverage will be the first time full profiles of the UK’s top 650 food and beverage operators will be available in one place. The companies, listed in alphabetical order, will have their most recent results reported as well as broader information around Ebitda, plans and trading style available. The database has taken 16 months to pull together, merging Companies House information, interviews and other public information to provide an easy to reference and exhaustive guide to the sector. Premium subscribers also receive access to three other databases: the Propel Multi-Site Database, produced in association with Virgate; the New Openings Database and the UK Food and Beverage Franchisor Database. Premium subscribers are also to be given exclusive access to the recording and slides to Propel Multi-Club Conferences. 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 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.

Ten Entertainment reports record year, lfls up 40% on pre-pandemic levels: Ten Entertainment Group has reported a record performance in the year to 1 January 2023, with like-for-like sales 40% higher than pre-pandemic, and up 5.5% on 2021. The company, which operates bowling and social entertainment centres, said that total sales for the year were 87.6% higher than in 2021, and up 50.6% on its full-year 2019 performance. It said it expected that profit for the year FY22 will be at the upper end of market expectations. The company said: “Following this strong performance with good cash generation, the group moved to a net cash position at the year-end for the first time in its history. This was achieved while still being able to resume dividend payments and continuing to invest in high-returning projects that will secure long-term sustainable growth for the business. Our pipeline of new centres is healthy. There were two new centres opened in 2022 and we are excited that at least four more centres are expected to be developed and open in 2023. We are focused on growth opportunities in the UK where we have a proven model which combines a high-quality entertainment experience with value-for-money. Costs have been carefully managed, with operational efficiencies extracted to minimise the impact of cost inflation without the need to raise prices to our customers. We have ensured that we reward our colleagues for this excellent performance through a performance-related bonus scheme and by bringing forward wage increases for 87% of our teams to help our people manage the inflationary impact on their personal finances.” The company opened new centres in Walsall and Harlow during the period, while a site in Crewe opens this quarter, and work on a site in Milton Keynes starts this month. The company said it will make a “significant investment” in 11 centres in FY22, with six refurbishments and five bowling upgrades. Graham Blackwell, chief executive, said: “A record-breaking performance delivered for 2022 demonstrating our customer appeal and our team’s commitment to excellence in entertainment. I am extremely grateful to our amazing teams who have made this excellent result possible. Everyone has worked hard to continue to provide high quality family entertainment at affordable prices. We have been rewarded by strong sales growth compared to 2019, bucking the trend in UK hospitality and leisure and have even managed to grow against our record-breaking second half of 2021. We know that there will be challenges this year, but with such a strong 2022 behind us and a proven track record, we are confident that we will continue to deliver an excellent experience and high-quality service. Our winning formula of great value for money social entertainment makes us well placed to continue to deliver strong returns for our shareholders.”

City Pub Group appoints Richard Myers as first CMO: City Pub Group, the owner and operator of 43 premium pubs across southern England and Wales, has announced the appointment of Richard Myers as its first chief marketing officer, with effect from 1 February 2023, which it said was a key appointment for its next phase of growth. The company said: “Richard is an exceptionally experienced and proven marketeer with over 18 years of experience within the drinks and hospitality industries. He joins most recently from Urban Pubs and Bars where he was responsible for all aspects of marketing, including brand proposition development, branding, digital strategy, PR and CRM, across the 40 London-based sites. Richard helped the business successfully navigate through the pandemic before doubling in size, launching 22 new sites over the last 18 months. Previously, Myers held the role of marketing director at Meantime Brewing Company, leading all brand positioning and development work both in the UK and globally, helping to grow the business exponentially prior to its sale in 2015. He has also held senior marketing roles at leading drinks companies SAB Miller, Bacardi Brown Forman and Vita Coco as well for Smart Group, a hospitality and events agency. Myers’ career originated within established, blue-chip businesses and has since progressed into entrepreneurial scale up businesses, where he has passionately led teams with disruptive and differentiated thinking, particularly within digital strategy and activation. His unique experience of both corporate and SME business environments – plus his continual championing of customer insights and experiences – has resulted in strategies which have addressed many business challenges, ultimately delivering strong growth during his tenure within each business.” Clive Watson, executive chairman of City Pub Group said: “We are delighted to welcome Richard to City Pub Group as our first dedicated chief marketing officer. Richard will report to me and join the executive committee to evolve and strengthen our business. He has a wealth of experience in marketing, but especially in digital communication, something which City Pub Group believes is critical to today’s customer and therefore to the future success of the business. With Richard’s guidance, we are determined to excel in this area to differentiate and augment our business.” Myers added: “City Pub Group is a vibrant business that has often challenged the way things are traditionally done. The business has huge potential, and I am thrilled to be joining the team to continue to fuel the further growth of the group. I am eager to get started and leverage my experience of helping to grow businesses of similar size, by ensuring the core proposition – and the activation of that in market – is compelling for our customers and sustainable for the journey ahead.”

Former The Ivy executive chef takes on same role at Covent Garden’s Sycamore Vino Cucina: Former The Ivy executive chef Gary Lee has taken on same role at Covent Garden’s all-day Italian restaurant, Sycamore Vino Cucina. Lee began his career as sous chef at Caprice Restaurant, working alongside Mark Hix, before honing his skills for Asian and Vietnamese cuisine at establishments including Nobu and Nahm at the Halkin, before becoming head chef at Bambou Restaurant. Since then, his positions have included executive chef at The Ivy, where he oversaw the kitchen and private dining rooms as well as launching private member’s club, The Club at The Ivy. “This is an exciting move for me, joining and leading the team at such a pivotal moment in our industry,” Lee said. “I am all about championing quality sustainable seasonal produce while considering the needs of my guests, with our first menu of 2023 inspired by my commitment to wellness and the incredible ingredients found in the great British larder.” Sycamore Vino Cucina, which is located within the Middle Eight Hotel, was opened by Paul Robinson, former head chef at Temper and The Coal Shed, in October 2020. Middle Eight is owned by Shiva Hotels.

KFC franchisee sees revenue outstrip pre-pandemic levels: KFC franchisee Splendid Restaurants (Colonel), part of the Splendid Hospitality Group, which operates 42 quick service restaurants in the Midlands and north-east of England with around 2,000 employees, saw a jump in revenue in the year ended 26 December 2021 as trading restrictions were lifted. Turnover for the year was £76,674,161 compared to £56,018,236 in the previous reporting period (and £55,850,320 in the year to December 2019), while reported Ebitda was a positive figure of £11,767,307 (2020: £5,659,550). Pre-tax profit was £3,502,851 (2020: loss of £1,025,751) and no dividends were paid. Owner and director Nadeem Boghani, who founded Splendid Restaurants in 2016, said: “As the UK learns to live with covid and the economy returns to pre-pandemic levels, we expect dine-in to continue to recover while delivery will remain significantly ahead of pre-covid levels. During 2021, the group made the decision to exit a small number of loss-making sites where it became evident that trading would not recover to acceptable thresholds. Where possible, these exits will coincide with the expiry of the respective leases; where a site retains a longer unexpired lease term, management are in dialogue with landlords on reaching mutually beneficial exit agreements.”

Manchester McDonald’s franchisee sees revenue return to pre-pandemic levels: MCD Manchester, a McDonald’s franchisee operating 11 restaurants in the Greater Manchester area after the owner won the chance to open his first branch more than 20 years ago, has reported a 63% increase in turnover for the year to 31 December 2021. Sales for the period totalled £32,181,939 compared to £19,827,955 in the year to December 2020, with a profit before tax of £3,760,009 (2020: profit of £381,884). The company was in receipt of government grants totalling £363,665 after accepting £2,368,875 the previous year. The turnover represents a return to pre-pandemic levels (year to December 2019: £31,559,579). In a statement accompanying the accounts, managing director Roger Khoryati said: “In common with many other businesses and industries, the director believes the trading environment in which the company operates will continue to be challenging but remains optimistic regarding future trading and is committed to increasing both future turnover and profitability and to continuing the company’s reinvestment program.” In 1999 Lebanon-born Khoryati, who was a McDonald’s business manager at the time, was one of 25 staff members offered the chance to own their own restaurant, to coincide with the 25th anniversary of the company’s arrival in the UK. He remortgaged his house, cashed in his share options and opened his first branch – in Wandsworth, south London.

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