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Thu 13th Jul 2023 - Update: Hakkasan, Gym Group and C&C Group results, new Domino’s CEO
Hakkasan commits to ‘strong focus on UK market’ alongside global expansion, secures $25m revolving credit facility: Hakkasan, owned by Mohari Hospitality, has said it is committed to a “strong focus on the UK market” alongside global expansion and has secured a $25m revolving credit facility. The group, which operates more than 70 branded locations in over 20 markets including Michelin-starred restaurants, gave the update in its accounts for the 18 months to 30 June 2022. The group changed its reporting period to align it with that of Madison Square Garden Entertainment Corp, the parent company of its owners Tao Group Hospitality, until that group was acquired by Mohari in May 2023. Director Derek Silberstein said: “In addition to global expansion, a strong focus remains on the UK market. A central training and development hub has been launched to enhance the group’s already outstanding level of service. As part of the group’s commitment to providing an exceptional dining experience, the new initiative aims to ensure that the highest level of hospitality is delivered across all restaurants. It is a testament to the group’s dedication to continuous improvement and look forward to seeing the positive impact it will have on operations.” He added: “On 15 June 2023, Tao Group Sub-Holdings entered into a credit facility agreement in which the lender holds a fixed and floating charge over the assets of Hakkasan Limited. The credit agreement provides a $25m revolving credit facility with a maturity date on May 3, 2028.” Revenue for the period grew from $35,710,000 in the year to 31 December 2020 to $75,812,000 in the 18 months to 30 June 2022. Pre-tax loss narrowed from $20,914,000 in 2020 to $1,854,000. Loss from discontinued operations was down from $59,705,000 in 2020 to $15,550,000. The company said that due to the realignment of its accounting year, alongside the fact that the fact that the group disposed of its US trading subsidiary in April 2021, means “the comparative amounts presented in the financial statements are not entirely comparable”. Silberstein added: “Restaurant revenue for UK owned operations increased by 121%, showing the recovery from the effects of covid-19 and enforced closures for five months from 1 January 2021 to 16 May 2021. Management fee revenue was significantly impacted by the global impact of covid-19 but has improved in the period by $0.8m (25%) from $3.2m to $4m. Pre-tax loss for the financial period from continuing operations reduced by 91%, showing that despite the reduction in government support for the hospitality industry through exiting the pandemic, the group made a significant improvement compared to the prior period.”

Next edition of Propel’s Turnover & Profits Blue Book to feature updated figures for 45 companies: The next edition of Propel’s Turnover & Profits Blue Book will feature updated figures for 45 companies. Premium subscribers will receive the next edition of the Blue Book tomorrow (Friday, 14 July), at midday. It now features 745 companies that are turning over a total of £48.1bn. A total of 504 companies are making a profit while 241 are making a loss. The profit being made by sector companies is now outstripping losses by £511m. The Blue Book shows the total profit of the 745 companies in the list is £3,272,517,901 and losses are £2,761,785,504. The Blue Book is updated each month and ranks companies by turnover, profit and profit conversion, listing directors’ earnings for the past five years. Premium subscribers are also to receive access to all the videos from last month’s Propel Multi-Club Conference featuring the sector’s finest female leaders and entrepreneurs. Premium subscribers will be sent 11 videos tomorrow at 9am, where female sector leaders share the lessons they have learned and moving forward. Premium subscribers also receive access to four other databases: the Propel Multi-Site Database, produced in association with Virgate; the New Openings Database; the Who’s Who of UK Food and Beverage; 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.

Domino’s Pizza Group appoints new CEO: Domino’s Pizza Group has appointed Andrew Rennie as its new chief executive officer. He will join as a director on 1 August and will assume the new role from 7 August. The company said: “Andrew has an extensive career in the Domino’s global system, a deep knowledge of the brand, vast experience of working with franchisees, and was himself a very successful multi-unit franchisee for a decade.” Rennie spent over two decades with Sydney-listed Domino’s Pizza Enterprises (DPE), in roles including chief executive of France and Belgium from 2006 to 2010, chief operating officer and then chief executive of its Australia and New Zealand business from 2010 to 2013, and chief executive of its European business from 2014 to 2020, which includes the master franchise agreements for France, Germany, Belgium and the Netherlands. While Andrew was at DPE, the market capitalization of the company grew from AU$132m to AU$5.85bn, representing an annualized return of approximately 30%. In the ten-year period when he was in senior leadership roles at DPE, the company delivered an annualized return of 34%. During his tenure as chief executive of Europe, revenue, Ebitda and store count increased 4.6-fold, 13.-fold and 3.0-fold, respectively. Rennie is a non-executive director of AIM-listed Domino’s Pizza Poland and chair of The Cheesecake Shop, a 238-store business in Australia and New Zealand. Elias Diaz Sese, who took over as interim chief executive in October 2022, will step down and remain a non-executive director of DPG, a role he has held since joining the board in 2019. Chairman Matt Shattock said: “I am delighted to welcome Andrew Rennie as our CEO. Andrew understands the power and potential of the Domino's brand as well as anyone in the business globally. He is an energetic and entrepreneurial leader with an incredible track record of delivering growth in Domino’s businesses around the world. All of us on the board believe that working with our brilliant colleagues and world-class franchisees, he is just the right person to take the business to the next level. I’d like to thank Elias for his extraordinary commitment over the past year and the positive impact he has made on the entire system in that time. His drive and passion for the business and its people have ensured that Domino's has accelerated the implementation of our strategy and created a stronger platform upon which to drive our growth. I am very grateful he will remain on the board in a non-executive capacity.” Rennie added: “I am delighted and honoured to be taking up the role of CEO of DPG. The Domino’s brand is in my blood and I’ve admired the strong progress the UK and Ireland business has made in recent years. Working with the team at DPG and the world-class franchisees here, I know we can take the business to new heights, and I can’t wait to get started.”
The Gym Group reports ‘good growth in membership and yield’ in first half of 2023: The Gym Group, the operator of 230 gyms across the UK, has reported “good growth in membership and yield” in first half of 2023. For the period ending 30 June 2023, revenue increased by 18.5% to £99.8m (H1 2022: £84.2m). Membership of 867,000 at 30 June 2023 compares with 790,000 at 30 June 2022 and 821,000 at 31 December 2022. First half average revenue per member per month (ARPMM) was up 8% to £18.81. Like-for-like revenue grew 7% year on year and comparable sites are running at 97% compared with 2019. In the period, The Gym Group opened two new sites and closed one site. Net debt as at 30 June 2023 was £69.7m compared with £76.1m at the financial year end. As previously reported, Will Orr will join The Gym Group as chief executive on 1 September, and interim results will be announced on 12 September. John Treharne, chair of The Gym Group, said: “After a positive first half, we remain on track with our plans and are well set to meet full year market expectations. We have continued to grow our membership and yield, whilst controlling our costs and generating cash. We are delighted that Will Orr will join us as CEO in September. We have put in place a new management team with the right blend of skills and experience over the past nine months, as well as further strengthening our Board. The Gym Group is therefore well placed for the next stage of its development, bringing a high-quality health and fitness proposition at an affordable price point to the communities in which we operate.”
C&C Group reports ‘encouraging performance’ in early FY2024: C&C Group has reported an “encouraging performance” in early FY2024 ahead of its AGM today. For the period 1 March 2023 to 30 June 2023, the group said it branded business “has had an encouraging performance in early FY2024, building on growth achieved in FY2023”. Net sales revenue of its branded business is up 10% in the four months to the end of June, while net sales eevenue of its core brands, principally Tennent’s and Bulmers, were up 9% in the same period, with each brand continuing to grow category share. The group said: “We are pleased to report progress in resolving the Enterprise Resource Planning (ERP) system implementation issues in the Group’s GB distribution business outlined in the FY2023 preliminary results announcement in May 2023, with service levels steadily improving. While this progress is consistent with our immediate objectives, we continue to target further improvements to On Time in Full (OTIF) metrics consistent with our aim to deliver outstanding service to our customers. The ERP system implementation is a key step in the digital transformation and optimisation of the business, which will enable the consolidation and standardisation of processes across the group, drive efficiencies, improve automation, improve customer experience, and provide a platform for digital commerce. C&C’s strong balance sheet and free cash flow generation capabilities are reflected in the reinstatement of a dividend of 3.79 cents per share for FY2023, subject to shareholder approval at today’s AGM. FY2023 leverage was 1.3x at 28 February 2023. As previously communicated, while leverage will temporarily increase as a result of the ERP system implementation issues, it is expected to be within the group’s leverage target range of 1.5x to 2x for the end of the financial year in February 2024. The potential for returns of capital will be kept under review having regard to a range of factors including wider economic indicators, market conditions and progress in restoring margins.” At the same time, Angela Bromfield has been appointed as independent non-executive director, effective from the conclusion of today’s AGM. She will succeed Helen Pitcher as chair of the Remuneration Committee. Then group said Bromfield brings “wide business strategy, communications and marketing experience to the board”. She is currently senior independent director, chair of the Remuneration and ESG Committees and a member of the Nominations Committee of Harworth Group. She is also a non-executive director, chair of the Remuneration Committee and a member of the Audit and Nominations Committees of Marshalls. She has previously been a non-executive director and chair of the Remuneration Committee at Churchill China and Zotefoams. Separately, the group’s process to recruit a new chief financial officer continues, and an update will be provided in due course. Patrick McMahon, C&C Group chief executive officer, said: “We are pleased with the start our branded business has made in FY2024. We are also reporting progress on the resolution of the ERP system implementation issues. However, the group’s performance is not at the level we planned, because of the ERP issues, and resolving them fully including the permanent restoration of OTIF metrics, remains our immediate objective and focus”. Ralph Findlay, executive chair, added: “Despite the challenges relating to the ERP system implementation, the performance of our brands, the strength of the group’s balance sheet and our robust cash generating capability have enabled us to recommend a dividend to our shareholders. Separately, I am delighted to welcome Angela Bromfield to the board of C&C as a non-executive director and chair of the Remuneration Committee. I look forward to working with her in the years ahead. I also thank Helen Pitcher and Jim Thompson, who step down from the board today, for their support and contributions to the group.”

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