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Morning Briefing for pub, restaurant and food wervice operators

Thu 22nd Jun 2023 - Whitbread reports strong trading momentum and positive outlook as Q1 UK revenue up 16%
Whitbread reports strong trading momentum and positive outlook as Q1 UK revenue up 16%, extends £775m revolving credit facility: Whitbread has reported strong trading momentum and a positive outlook with first quarter UK revenue up 16% (19% total including Germany), as it extends its £775m revolving credit facility. Food and beverage sales were up 10% versus FY2023 (12% total) and accommodation sales up 18% (23% total). Like-for-like sales growth was up 14% (total 15%), with food and beverage sales up 9% (10% total) and accommodation sales up 16% (18% total). It said Premier Inn UK delivered an outstanding performance during the quarter, with strong demand from both business and leisure guests across the regions and London. Revenue per available room (RevPAR) was 16% ahead of FY23 and 40% ahead of FY20, with a “continued outperformance versus the wider midscale and economy”, with a RevPAR premium of £6.18 (Q1 FY23: £5.76). UK food and beverage sales benefited from several commercial initiatives put in place during the second half of FY23. Premier Inn Germany also made good progress, with RevPAR up to €55 (Q1 FY23: €35). The group said the strength of its overall performance and forward booked position has “increased our confidence in being able to deliver a strong first half result in FY24”. It said trading momentum is strong and it remains positive about the full year outlook, with interim results due to be announced on 18 October. The group also extended its existing £775m revolving credit facility, which remains undrawn, for a further 12 months, to May 2028. The five-year facility is provided by a syndicate of seven banks led by BancoSantander, Barclays, NatWest and Bank of China, and has variable interest rates. Whitbread chief executive Dominic Paul said: “In the UK, our market leading brand and value-led customer proposition is continuing to deliver impressive revenue growth and a healthy RevPAR premium versus the wider M&E market. The structural reduction in hotel supply, coupled with strong consumer demand, is highlighting the strengths of our differentiated business model, as evidenced by our continued strong performance. Our forward booked position into Q2 underpins our confidence in being able to deliver a strong first half result. In Germany, we now have 56 hotels with 10,000 rooms open, and a further 32 hotels and 6,000 rooms in the pipeline. Overall market demand continued to recover during the first quarter. Our cohort of 18 more established hotels is continuing to perform in line with the market and we have been encouraged by the performance of our less mature cohorts that are starting to follow a similar trajectory. The continued recovery of the wider German market, the performance of our more established hotels and encouraging guest scores across all of our hotels mean we remain confident in achieving our long-term target of 10-14% returns on capital. Our business is in great shape and trading well. Given the lack of branded supply growth and permanent decline in the independent sector, I am confident that our business model will continue to deliver as we strengthen Premier Inn's position in the UK, unlock our potential in Germany and maximise long-term returns for our shareholders.” The group opened 348 new rooms across the UK and Ireland and remains on course to open a total of 1,500-2,000 new rooms in FY24, most of which will open in the second half of the year. “While trading at the value end of the pub restaurant market remains challenging, we have been pleased with the positive impact of a number of commercial initiatives introduced in FY23,” the group added. “We are continuing to explore a variety of options to optimise our F&B offer while maintaining a quality experience for our Premier Inn guests. Forward booked revenue in the UK is well ahead of last year, and in Germany, we remain on course and expect to reach break-even on a run-rate basis during calendar year 2024.” Whitbread features in the Propel Turnover & Profits Blue Book. Its turnover of £1,703,000,000 for the year ending 31 July 2022 is the fourth highest in the database, while its pre-tax profit of £58,000,000 is the tenth highest. The Blue Book ranks companies by turnover, profit and profit conversion, listing directors’ earnings for the past five years. 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 jo.charity@propelinfo.com to upgrade your subscription.
 
Number of franchise operators set to join updated Premium Database of Multi-Site Companies: A number of franchise operators are among the 16 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, 30 June, at midday. The updated Propel Multi-Site Database, which is produced in association with Virgate, features MCD Manchester, a McDonald’s franchisee operating 11 restaurants, which is led by managing director Roger Khoryati. Also added this month is West Midlands McDonald's franchisee A&S Restaurants, which is owned by Ronald McDonald House trustee Afia Sirkhot, and operates seven branches in the region. In addition, ten-strong McDonald’s franchisee K Foley, owned by Kevin Foley, who has been a McDonald’s franchisee since 1999, will be featured. Meanwhile, south London McDonald’s franchisee Manor Restaurants, which is owned by Terry Eagle, and operates four sites, is included. Premium subscribers will also receive a 1,300-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 2,869 companies. Premium subscribers will also receive the next edition of the New Openings Database on Friday, 7 July, 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 2,000-word report on the new additions to the database. Premium subscribers also receive access to three other databases: the Propel Turnover & Profits Blue Book; the UK Food and Beverage Franchisor Database; and the Who’s Who of UK Food and Beverage. 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 jo.charity@propelinfo.com to upgrade your subscription. Premium subscribers are also to be given exclusive access to the recording and slides to Propel Multi-Club Conferences. 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.
 
MPs call for ultra-processed foods to come with health warnings: A cigarette-style health warning should be considered on packaging for ultra-processed foods that could have “serious health implications”, MPs have suggested. Former Conservative minister, Sir Greg Knight, said: “There’s a case for looking again at our food-labelling laws and perhaps requiring ultra-processed food to carry a health warning, rather like we require cigarette packets to have to display such a warning.” SNP MP Carol Monaghan added: “One of the issues with ultra-processed food is that it’s also ultra-addictive, and then people want to have more of it and we can’t help ourselves, but we don’t treat it like other ultra-addictive things like cigarettes and alcohol. The health implications could be just as serious. Is it time we do that?” Conservative MP Suzanne Webb, opening the debate in Westminster Hall, said: “Ultra-processed food is food that tends to be high in fat, salt and sugar – food which is highly addictive. The food supply chain is, quite frankly, endorsing and promoting products that are linked to serious health outcomes.” The MP for Stourbridge said she was “slightly disappointed” the government was delaying its planned ban on two-for-one junk food deals but acknowledged the cost-of-living pressures, reports The Daily Mail. She added: “A good step forward would be to see an advertising watershed.” A ban on TV advertising of junk food before 9pm had been planned, with Ms Webb adding: “Current advertising regulations are not going far enough to protect children from seeing a significant amount of unhealthy food adverts.”
 
Domino’s trials pizza delivery via jetpack for Glastonbury revellers: Domino’s is trialling pizza delivery via jetpack for revellers at the Glastonbury music festival. Onlookers were stunned to see a Domino’s delivery pilot take off from the nearby Glastonbury store to deliver pizzas to the festival in a custom-made jet suit complete with a delivery box, reports the Somerset County Gazette. Sam Wilson, Domino’s jet suit deployment director, said: “We took inspiration from this year’s headliner (Elton John, who had a 1972 hit with Rocket Man) to launch our own rapid delivery trial – it was a bit of a no brainer. Every year we see huge numbers of random requests from festival goers trying to sneak pizza into the party, so this year we wanted to take a giant step towards and trial our very own rocket man service to help hungry campers get a slice of sky-high satisfaction in the future.” On whether or not the new delivery service is the beginning of a nation-wide rocket-powered fleet, he added: “All we can say at this stage is that the idea has legs…or wings…or jets.” The suits, which are worth hundreds of thousands of pounds each, were customised for Domino’s to ensure that the pizzas were delivered with piping hot freshness. A spokesperson at Gravity Industries, who partnered with Domino’s to design the suit, added: “Being able to exceed the average delivery time by flying through the Somerset fields and feed campers with the pizza delivery experts certainly shows the future of a fast delivery service.”
 
Cambridge phone box could be converted into coffee shop: A Cambridge phone box could be converted into a coffee shop after plans to convert it were lodged. Developer Jake Armon hopes to turn the red phone box opposite the Regal pub at 39a St Andrews Street, Cambridge, into a coffee kiosk. It would be used to “sell pre-ordered coffee made by the barista in the phone box”, reports the Cambridge News. A design and access statement submitted with the application said: “Internally, the existing telephones and associated equipment will be removed back to the original shell. The door of the kiosk will remain closed under a customer is collecting a pre-ordered coffee.” It added: “The concept of a public telephone box is now outdated as the majority of people own a mobile phone. The proposed new use maintains their iconic appearance but re-invents their use to suit the 21st century. The concept of adapting phone boxes to different uses has been adopted throughout the country with over 2,000 to date adapted to varied uses.” Cambridge City Council is set to make a decision in the coming weeks.

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