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Tue 16th May 2023 - Update: Marston’s H1 lfl sales up 10.7%, Greggs, Caprice Holdings, tourism tax, Travelodge
Marston’s H1 lfl sales up 10.7%: Marston’s, the Andrew Andrea-led pub company, has reported a 10.7% increase in like-for-like sales in the 26 weeks ended 1 April 2023 compared to last year, and said trading since the half year end has been strong. The company said like-for-like sales in its managed and franchised pubs were up 7.9% since the half year end. It said: “For the Easter weekend and first May bank holiday like-for-like sales were strong compared to last year, demonstrating that when weather conditions are right people want to go out to the pub. Over the Coronation weekend overall there was a sales uplift, with better performance on the days with good weather. We remain mindful of the current macroeconomic environment, with the cost-of-living crisis and the resulting challenges this brings in respect of cost inflation and the potential impact on disposable income, as well as potential supply issues. However, our pubs have demonstrated their resilience time and time again and, to date, there is little in our trading performance to suggest that there has been a change to consumer behaviour; our guests still want to go out and have an affordable treat in a Marston’s pub.” Revenue for the 26 weeks ended 1 April 2023 was £407m (H1 2022: £369.7 million); 10.1% higher than the same period last year reflecting the continued rebuilding of trading momentum post omicron. Like-for-like sales for the period were up 10.7% vs last year, which the company said continued to show “strong like-for-like performance, encouraging recovery from covid-19 and the positive impact of our strategy”. Like-for-like sales were up 17.9% vs the same period in FY2020, which included a brief period of covid-19 impact in late March 2020. Retail sales in the group’s 1,191 managed and franchise pubs increased by 11.1% to £375.3m (H1 2022: £337.9m) and total outlet sales increased by 11.3% to £388.3m (H1 2022: £348.9m). Its tenanted and leased model, which comprises 246 pubs, generating revenues of £18.7m (H1 2022: £20.8m). Marston’s said it was still its intention to convert the remainder of the tenanted and leased estate to turnover based models in the medium term. Accommodation sales were £15m (H1 2022: £13.6m), benefitting from the demand for UK staycations. It said that drink sales had continued to perform well, once again demonstrating the “trading resilience of our predominantly community pub estate”. It said: “We were also pleased that the gap between drink and food sales performance is narrowing. We continue to have confidence that our pub strategy is delivering positive momentum, evidenced by the trading performance.” Underlying operating profit, excluding income from associates (CMBC) was £43.1m (H1 2022: £39.9 million) with a margin of 10.6% (H1 2022: 10.8%), which the company said was expected due to increased energy costs. Underlying operating profit, including income from associates, was £45.3m (H1 2022: £37.9m). The company said that due to the seasonal nature of its business, the majority of profit is typically earned in the second half of the year. Underlying profit before tax was a loss of £3.6m (H1 2022: loss of £7.5m), while it reported a pre-tax loss of £38.1m (H1 2022: profit of £25.6m). It said it had successfully secured an amendment and extension (A&E) to its banking facility and private placement to the end of January 2025. It said: “The revised £340m facilities are comprised of a £300m Revolving Credit Facility (RCF) with the continued support of all of our existing banks and with two new banks keen to join the syndicate, together with a restatement of our current £40m private placement. The RCF replaces the group’s existing £280m facility. As previously reported, £120m of the facility is hedged.” Net debt, excluding IFRS 16 lease liabilities, was £1,204.1m, a reduction of £12.1m from last financial year (2022: £1,216.2m). It said the reduction in debt would have been greater without a H1 phasing of capital expenditure. The business said that following a strategic asset review, in FY2023 it expects to dispose of £50-60m of non-core and unlicensed properties. In this period, £24.3m proceeds have been generated from these disposals, which achieved a price 39% higher than the net book value. Andrea, chief executive, said: “The strategy which we outlined 18 months ago is progressing well and generating positive results which is pleasing. Our H1 performance clearly demonstrates that consumers remain as keen as ever to celebrate – and socialise within – the Great British Pub. The macro environment is becoming increasingly stable and recent evidence suggests that both the cost outlook, and consumer confidence, are steadily improving. The actions we are taking are building a demonstrably better business and Marston’s predominantly community pub estate continues to benefit from changing consumer lifestyles. We continue to deliver upon our clear strategic objective to reduce debt and progress our path to profitability, albeit the seasonality of our trading profile means that the majority of the group’s profit is characteristically H2 weighted. We have invested ahead in H1, to capitalise on the benefits of this in H2, and remain on track to meet our operating profit, cash generation and debt reduction targets for the year. We look forward to delivering further positive progress as the year unfolds and remain confident that we have the strategy and the team in place to do so, maximising the opportunities open to us in the future and delivering shareholder value.”

Latest Who’s Who of UK Food and Beverage to feature more than 178,000 words of content: The latest Who’s Who of UK Food and Beverage will feature more than 178,000 words of content when it is released to Premium subscribers on Friday (19 May). The database now features 680 companies and this month’s edition includes 13 new additions and 31 updated entries. 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 merges 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 four other databases: the Propel Multi-Site Database, produced in association with Virgate; the New Openings Database; the Propel Turnover & Profits Blue Book; 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 £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email to upgrade your subscription. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before; regular video content and regular exclusive columns from Propel group editor Mark Wingett.

Greggs lfl sales up 17.1%: Food-to-go operator Greggs has said it “performed strongly” in the first 19 weeks of 2023 as it progressed its strategic growth plan against a challenging macroeconomic backdrop. Like-for-like sales in company-managed shops grew by 17.1%, it said in part reflecting the impact of omicron in the first nine weeks of 2022. It said that like-for-like sales growth in the ten weeks to 13 May has averaged 15.7% and that it expects this figure to continue to normalise as the business annualises against the actions taken in 2022 to mitigate against inflation. Total sales in the 19 weeks to 13 May 2023 were £609m (2022: £495m). The business said: “Menu development continues to support our strategic growth objectives. Sales of hot food and snacks including chicken goujons and wedges are showing particularly strong growth. Pizza is also proving popular, with our Late Trade Pizza Deal driving sales in the evening daypart. We have also continued to grow our plant-based offering, with the new Vegan Mexican Chicken-Free Bake being the latest addition to the menu and were delighted that our Sweet Potato Bhaji and Rice salad bowl recently won the Healthy Eating award at The Sammies 2023.” During the period the company opened 63 new shops, including 25 with franchise partners. Recent shop openings have included sites at Canary Wharf Station and at Glasgow and Cardiff airports. It said its openings pipeline for the remainder of the year is strong. In the year to date, it closed 26 shops, giving a total of 2,365 shops trading at 14 May (comprising 1,908 company-managed shops and 457 franchised units). In line with its previously-communicated capital expenditure plans, investment projects at the company’s Birmingham and Amesbury distribution centres are under way and will deliver additional logistics capacity to support further expansion of its shop estate. Greggs anticipates that this additional capacity will become available in the second half of 2024. The company said: “We have made a good start to the year with sales in line with plans and continued progress on our strategic initiatives. Looking ahead, whilst we expect the macro backdrop to continue to be challenging, we are confident in making further progress. Although we expect to see ongoing material cost inflation, we have good forward cover on key commodities. Consumer disposable incomes are likely to stay under pressure, but we remain confident that our outstanding value proposition continues to be compelling. Whilst uncertainties continue, the board’s expectations for the full year outcome are unchanged.”

Richard Clark joins Joel Robuchon International as its new CEO: Richard Clark has stepped down as managing director of the Richard Caring-backed Caprice Holdings to join restaurant group Joel Robuchon International as its new chief executive, Propel understands. Clark was promoted to managing director of Caprice Holdings in July 2021. He was previously operations director for Caprice Holdings and The Ivy Collection, which he joined in January 2019. Before this, he held senior roles at Harbour Hotels and CAU Restaurants. Joel Robuchon International is the most Michelin starred restaurant group in the World, currently holding a total of 26 stars across its extensive portfolio. Its concepts of the include: L’Atelier Robuchon, Restaurant Robuchon, Le Jardin de Joël Robuchon, La Boutique Robuchon, L’Époque by Robuchon, Le Clubhouse Robuchon, L’Ambassade Robuchon, Le Comptoir Robuchon and Le Deli Robuchon. It also manages the licenses of 24 operational locations worldwide in cities including Dubai, Geneva, Hong Kong, Las Vegas, London, Macau, Madrid, Miami, Monaco and Tel Aviv. Last summer, the business oël secured a second site for its deli concept in London. The original Le Deli Robuchon opened in Piccadilly in December 2019. The business, which also operates Le Comptoir Robuchon at the Clarges Street development in Mayfair, will open a second Le Deli Robuchon in Chelsea, at 279 King’s Road, below the Everyman cinema, this July. 

‘Nothing off the table’ over calls to improve allergy labelling in restaurants: Calls to improve allergy labelling in restaurants are being considered and “nothing is off the table”, according to a health minister. The Independent reports Neil O’Brien said the government will also “look closely” at proposals for a national allergy tsar. His remarks came as MPs used a parliamentary debate to back both campaigns after they were supported by thousands of people who signed two e-petitions. Owen Carey, 18, from Crowborough, East Sussex, who told staff he was allergic to dairy, suffered a fatal reaction after eating buttermilk-coated grilled chicken at a London restaurant in 2017. “Owen’s Law” seeks to require restaurants to put all information about allergens in their food on the face of the main menu to ensure customers have “full visibility” on what they order. O’Brien, responding to a debate in Westminster Hall, said food businesses are “under the same legal obligation” to provide information at the point of sale indicating the presence of 14 major allergens. The minister said the Food Standards Agency (FSA) is working to ensure all consumers can “make safe and informed choices about the food that they buy”, adding: “The Carey family is already driving awareness on these issues and the issues that people with life-threatening allergies face. The FSA has met with the family several times over the last few years and absolutely recognises the very positive impact that just the campaign for Owen’s Law is already having. We need to consider all the changes we might make to the law carefully to make sure there are better safety outcomes for allergen sufferers and to avoid any kind of unintended consequences for consumers.” O’Brien said a workshop with the families and others will take place at the start of June to “look at how we go further”, adding: “I’m not in a position to make an announcement today but everyone agrees there is room to do better and nothing is off the table at this point in time. One of the challenges – and these are not arguments against doing anything, they’re just issues that we have to grapple with as we work out how to make progress – is how do we avoid dangerous out-of-date information being on menus, particularly for smaller businesses, smaller restaurants which have more frequent changes to their ingredients. We can’t have false reassurance.”

Minister mulls impact of tourism tax as demands grow for a U-turn: British businesses have been urged to supply more “data and information” on how the Treasury’s decision to scrap VAT-free shopping for overseas visitors is hurting the economy, as renewed pressure builds for the policy to be reinstated. The Times reports that the government is facing fresh calls from companies, including the luxury trade body Walpole and Heathrow airport, to restore tax-free shopping for overseas tourists. They warn that London is losing tourism business to cities such as Milan and Paris. Nigel Huddleston, the trade minister who is also a former tourism minister, said Jeremy Hunt would consider whether to keep the “tourism tax” when he next examines tax policy for the autumn statement. He stressed, however, that the chancellor’s decision whether to bring the scheme back would be based on a “balance” between encouraging tourism and raising funds needed to pay for public services. “If we got rid of the tax, then there would be some loss of revenue which we need to pay for our essential services,” Huddleston said on LBC Radio on Monday. “So, it’s all a matter of balance. The appeal is please give us the data and the information and then that will help inform our decision-making.” The scheme allowed visitors from non-EU countries to recover the VAT on purchases bought within the trip. It was withdrawn by the Treasury on New Year’s Eve 2020, during the pandemic. The New West End Company, which represents 600 retail, restaurant, hotel and property owners, said the loss of this scheme had effectively added a 20% premium to goods such as shoes and watches, putting London at a disadvantage to European destinations.

Travelodge soars above rival budget hotel chains: Travelodge has reported record profits and revenue growth on the back of strong demand for staycation breaks and events such as the Commonwealth Games. The Times reports the budget hotel chain, second only to Whitbread’s Premier Inn in size, said it continued to outperform the midscale and economy sector as business travel recovered from the pandemic. In the year to the end of December, total underlying revenue jumped by 25% to £909.9m compared with 2019 levels: an increase of 62.5% on 2021. Underlying earnings increased from £129.1m pre-covid to £212.9m, well above last year’s £81.1m. Occupancy was one point higher compared with 2019 at 81.8% and the average room rate was up 22.5% at £64.31. Revenue per available room rose by 23.9% to £52.59 against 2019 levels, more than ten points ahead of the competitive set. Travelodge has 595 hotels with 45,760 rooms, mainly in the UK, but a small number in Ireland and Spain. It has almost 12,000 employees. It went through a company voluntary arrangement during the pandemic to help it to stay in business and said it was targeting about 300 new UK locations and expected to open eight hotels this year.

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