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Just Eat board rejects unsolicited offer from investment firm

Just EatThe board of Just Eat, the market place for takeaway food delivery, has rejected an unsolicited offer for the company from Prosus NV. Investment firm Prosus NV has offered 710p per share in cash for Just Eat, valuing the company at £4.9bn, which Provus said was a 20% premium on the Takeaway.com offer of 594p. However, Just Eat said the Provus offer “significantly undervalues Just Eat and the combination with Takeaway.com”.

Just Eat stated: “The board of Just Eat has considered the terms of the Prosus offer and believes it significantly undervalues Just Eat and its attractive assets and prospects on a stand-alone basis and as part of the proposed recommended all-share combination with Takeaway.com.

“Accordingly, the board of Just Eat unanimously recommends shareholders reject the Prosus offer. The Prosus offer follows a number of proposals from Prosus to the board of Just Eat regarding a possible cash offer for Just Eat. The board of Just Eat unanimously rejected Prosus’ initial proposal of 670p per Just Eat share and subsequent proposals of 700p and 710p per Just Eat share.

“Just Eat is a leading strategic asset in the food delivery sector and the board believes the Prosus offer fails to appropriately reflect the quality of Just Eat and its attractive assets and prospects, the benefits of first-mover advantage in a consolidating sector, and the significant future upside available to Just Eat shareholders through remaining invested in Just Eat and the Takeaway.com combination.

“The board of Just Eat has also announced the publication of the scheme document and associated prospectus and other documentation to convene the shareholder and court meetings in relation to the Takeaway.com combination. The board of Just Eat believes the Takeaway.com combination is based on a compelling strategic rationale that will deliver a number of strategic benefits to Just Eat shareholders including creation of one of the world’s largest online food delivery platforms; leadership from a strong management team drawn from both the founder-led team at Takeaway.com and Just Eat with 40 years of combined experience in the sector; and a platform built around two of the world’s largest profit pools in food delivery.

“The board believes the Takeaway.com combination provides Just Eat shareholders with greater value creation than the terms of the Prosus offer. Accordingly, the board of Just Eat continues to recommend the Takeaway.com combination to Just Eat shareholders.”

Prosus NV stated when it made its offer: “Prosus believes the terms of its all-cash offer provides certainty and compelling value for Just Eat shareholders. Since the start of the offer period the high-growth internet sector and online food delivery sector have fallen 16.9% and 15.0% respectively. The Takeaway.com share price has fallen 15.0% during this period.

“Against this backdrop of continued market volatility and macro-economic uncertainty, the Prosus offer provides Just Eat shareholders with the certainty of an all-cash offer. Based on Prosus’ global experience and having met Just Eat management and reviewed the information provided, Prosus believes the business will require substantial investment, in excess of that planned by Just Eat management. Prosus believes this investment is required to enhance product, technology and own-delivery capabilities to maintain its growth and defend its market positions in the face of intense competition.

“Just Eat’s third-quarter trading update demonstrated a significant slowdown in order growth, which highlights the need to accelerate this investment to sustain its competitive advantage. Prosus doesn’t believe the proposed combination with Takeaway.com will fully or effectively address this investment need.”

Whitbread reports strategic progress in challenging market

Alison Brittain, chief executive of WhitbreadWhitbread has reported sales down 0.1% to £1,078m in the first six months of its financial year, with adjusted profit before tax down 5.6% to £251m.

Alison Brittain (pictured), Whitbread chief executive, said: “We have delivered a resilient first half profit performance despite challenging market conditions in the UK. Shorter-term trading conditions in the UK regional market have been difficult, particularly in the business segment where we have a higher proportion of our revenue, whilst trading in London remained strong.

“Against this challenging backdrop, we have a number of activities underway which continue to build our brand strength as the UK’s favourite hotel chain. We are enhancing and optimising our UK hotel network and have successfully trialled new higher specification ‘Premier Plus’ rooms in two hotels, with fantastic customer feedback.

“We are on track to have 500 Premier Plus rooms this year, with ambitions for a total of 2,000 over the next year. We have also made good progress in delivering our ambitious efficiency targets, helping to offset part of the ongoing industry-wide inflation. In Germany, our confidence in the long term opportunities grows and our expansion plans are firmly on target.

“Our German pipeline has increased 25% to 7,280 rooms over the last year and we continue to look for ways to accelerate our ambitions. We have opened new organic hotels in Hamburg and Munich, which are both performing well and we are also making good progress in preparation for completing the 19 hotel acquisition in February 2020, with 13 hotels to be rebranded to Premier Inn in the first half of next year.

“Whilst the near-term market conditions in the UK remain uncertain, we have confidence in the long-term structural opportunities available in the domestic budget travel markets in the UK and Germany. Following successful completion of our return of surplus capital programme, we still have a strong balance sheet, providing support for ongoing disciplined deployment of capital, which will deliver growth over the longer term.”

The company added: “Market conditions in the UK continue to be challenging with business confidence remaining weak and leisure confidence in decline, coinciding with heightened political and economic uncertainty, which has continued into the third quarter of FY20. This has impacted hotel domestic demand, particularly in the regional market, where 80% of Premier Inn hotels are located.

“There has also been a greater decline in short-lead discretionary bookings, which tend to be at higher price points. With this uncertainty, it is difficult to predict how business confidence and business investment will evolve in the second half of FY20 and into FY21 and impact demand for short-stay, domestic travel. Trading conditions in the UK hotel market will continue to be monitored closely.”

Of its circa 400-strong pub restaurant business, it stated: “Total revenue grew by 0.6% year-on-year, but like-for-like sales decreased by (1.2)% (H1 FY19: (2.6)%) due to a continuing subdued casual dining market.”

Other News:

Brewdog logoScottish brewer and retailer BrewDog is to issue a new mini-bond that will pay lenders partly in beer. The company will launch the offer on crowdfunding platform Crowdcube later this month. It will pay 6% interest per annum, which will be paid 50% in cash and 50% in beer – redeemable in its bars or online shop.

BrewDog has yet to specify the amount it is looking to raise or the time-frame of the bond. The company has previously launched two mini-bonds via Crowdcube. It sold a £2.5m, four-year bond in 2016 that carried a 6.5% interest rate. Last year it raised £10m after issuing a four-year bond with a 7.5% interest rate.

Both its previous bonds entitled investors to a 10% discount in BrewDog bars but didn’t include beer as a payment component. The bond will run alongside the company’s Equity for Punks crowdfunding campaign, which has so far raised more than £6.7m from over 32,500 investors.

The latest Equity for Punks campaign, which runs until April, aims to raise £7m and has a stretch goal of £50m. In total, its six fund-raises to date have raised more than £73.7m from circa 124,000 investors. Earlier this year the company began accepting cryptocurrency in exchange for shares as part of ongoing fund-raising efforts.

Meanwhile, BrewDog has revealed it has signed a deal to open a series of bars in India. Updating on its plans, the company stated: “Our Australian brewery is almost finished and the equipment is now on-site. We’re going to open DogTap Brisbane in November. We also have some great bars opening in the remainder of 2019 with an outpost in Dublin’s Silicon Docks and a location in Cincinnati, both due to open in November.

“We have signed a deal to open a series of BrewDog bars in India, with the first one due to open in Mumbai in December or January as well as having found a fantastic distributor in the market too. As our distilling business continues to grow, we are looking to expand our capacity and are considering adding a stand-alone distillery to our Ellon campus.”

New Admiral Taverns chief executive Chris JowseyTenanted operator Admiral Taverns has completed the acquisition of 150 tenanted community pubs from Star Pubs & Bars.

The company stated: “The acquisition of the nationwide portfolio marks the latest stride forward in Admiral’s proven growth strategy as a leading operator of community pubs. Through (our) highly supportive and award-winning operations-centric approach, the group has developed a high‑quality estate of approximately 950 sustainable, individual and authentic wet-led pubs, which sit across England, Scotland and Wales.”

Chris Jowsey (pictured), chief executive of Admiral Taverns said: “On behalf of the entire company, I am delighted to officially welcome our new licensees to Admiral. Core to our approach is our commitment to invest behind our pubs and licensees, supporting them to build vibrant social hubs that can thrive at the heart of their local communities.

“Our team have been working hard to ensure the integration process for our new licensees has been as smooth as possible and we look forward to developing these new working partnerships.”

Crussh outsideLondon-based healthy food and juice brand Crussh expects to return to positive Ebitda levels in its current financial year while it has launched a trial of “honesty kiosks”, Propel has learned.

Crussh, which has seen full-year sales grow more than 10% as its diversity strategy starts to deliver, has partnered with shared workspace company WeWork to offer unmanned tills and fridges of food and drink at four of its sites in the City of London.

Meanwhile Crussh, which has also seen full-year site Ebitda almost double to £1.5m from £822,000 the year before, has further strengthened its partnership with Sodexo and its footprint outside London with a site at the University Of The West Of England in Bristol – their third site together.

Crussh also recently raised circa £700,000 from new and existing shareholders to continue the refit of its company-owned stores to the brand’s “new look”, with nine stores revamped so far in its current financial year. Chief executive Shane Kavanagh told Propel he was focusing on growing the partnership and product supply strands of the businesses despite the trading environment being the “toughest I have known”. It has now extended its product partnership with Sainsbury’s from 11 to 62 stores, while Kavanagh expects the company to open a “couple more” sites with Sodexo before its financial year ends in March.

Kavanagh said: “It is really tough out there but we’re reasonably pleased with where we are in the current financial year and expect to return to positive Ebitda by the year end. The core estate continues to perform well. There are a lot of things out there we can’t control so we’re concentrating on the things we can and, with that in mind, our focus is on our partnerships.

“At the moment it isn’t the right time to open more high-street stores but we think there will be opportunities again at some point. It’s about having multi-revenue streams and we’re excited about our honesty kiosk trial and our work with Sainsbury’s, SSP and Sodexo. Having opened in Birmingham and now Bristol with Sodexo and through our Sainsbury’s partnership, we’re getting our brand in front of more people outside London.”

Kavanagh spoke to Propel as Crussh revealed it returned to like-for-like growth – up 1.8% – for the year ending 31 March 2019. Revenue rose to £15.5m compared with £14.1m the year before, while underlying Ebitda was minus £61,000 compared with minus £569,000 the previous year. Pre-tax losses narrowed to £1.2m from £31.6m the year before. During the year the company opened another three sites inside Everyone Active sports centres and its debut outlet with SSP, at Paddington station.

In their report accompanying the accounts, the directors stated: “In 2018-19, despite the ongoing challenges in the wider economy and market place, Crussh saw a significant improvement in its financial performance as management action to control costs and margins, combined with positive early results from the company’s new strategy, began to contribute to results. The board of directors remains confident in the future of Crussh and pleased with the success to date of the strategy to transform the direction of the business and open new avenues for growth.”

Pret Logo – image: Sorbis / Shutterstock.comPret A Manger, the JAB Holdings-owned chain, is trialling a number of digital innovations at its site in London’s Houndsditch. The trial includes digital labelling on shelves and a payment solution via a new app that allows consumers to select products and pay without going to the till.

The new app also has an order-ahead feature, while the venue offers self-service tills and has coffee machines placed near the tills to help order pick-up. Beacon technology on the tables is also being trialled in the store at 133 Houndsditch.

The move sparks the beginning of Pret’s digital journey, with chief executive Pano Christou telling the Operation Directors’ Conference organised by Propel last month that the company was learning from Panera Bread, which is also backed by JAB Holdings, to gain a “one-to-one view with the customer”. He admitted this could see the brand introduce its first loyalty programme and explore payment innovation, including digital tickets.

Christou said: “Pret currently has no technology and no loyalty app to connect with customers – just its tills. The opportunity to increase loyalty and sales through a digital experience is huge.” The digital trials at Houndsditch are being overseen by Alex Chisholm, who was promoted to digital transformation director this year after previously developing and managing Pret’s digital engagement strategies in the US.

CGI of Japanese speciality coffee brand's % Arabica store in LondonJapanese speciality coffee brand % Arabica is to make its UK debut by opening two stores in London. A store is already in soft launch at a venue in King Street, Covent Garden, which will officially open on Friday, 1 November on the same day its flagship sister site launches in east London’s Broadway Market.

Founded by Kenneth Shoji, each store has a wood-clad, custom Slayer Espresso machine at its centre, complemented by bespoke seating, mirrors and flooring. The London stores will also feature Smeed Dean yellow brickwork in a nod to “traditional craftmanship of the local community”.

The Broadway Market site will also house its own roasting machine. Shoji trained as a barista in the US before buying a coffee farm in Hawaii and launching a green bean trading company. The first % Arabica store launched in Hong Kong in 2013 with a global flagship store opening in Kyoto, Japan, a year later.

The company now operates 40 stores in 12 countries, with its first European sites opening recently, in Paris and Berlin. By the end of 2019, % Arabica said it will have opened 20 more stores internationally with plans for another 50 outlets in 2020.

Papa John's UK research and development director Tom AllenPapa John’s has appointed Tom Allen (pictured) to the newly created role of research and development director for the UK. Allen, who has 20 years’ experience in the foodservice industry, will be responsible for Papa John’s menu choices in the UK.

He has worked in a consulting capacity in the UK and abroad for companies such as Pret A Manger, KFC, Domino’s Pizza and Marks & Spencer. He also ran and sold his own bakery and coffee shop.

Allen said: “While having a big, established and popular brand, Papa John’s management team is small enough to be flexible and can respond quickly to changing customer trends. This means I have scope to innovate and make a difference with new product introductions while maintaining our focus on the quality ingredients that make up our ‘old favourites’ and best-selling pizzas.

“I will also work closely with franchisees. Papa John’s has more than 400 franchised stores in the UK and I will visit stores and meet franchisees, managers and staff. It’s critical we manage the cost of goods and wastage so I need to have direct feedback from franchisees to see how we can continue to make improvements. Franchisees often come up with some great new ideas for products and process improvements too!”

BII NITAs 2019The British Institute of Innkeepers (BII) has announced the finalists for the National Innovation in Training Awards (NITAs), while bookings for the event are open. The winners will be revealed at an awards ceremony at Cafe de Paris in London on Tuesday, 26 November.

The NITAs, in association with and organised by Propel, recognise those companies and individuals for whom people and training are at the heart of their business.

The finalists are Most Innovative Recruitment Strategy: Brewhouse & Kitchen, Loving Hospitality and Only A Pavement Away; HR Manager of the Year: Mark Vaughan (Beds and Bars) and Lee Woolley (Stonegate Pub Company); Professional Trainer of the Year: Alex Double (Brewhouse & Kitchen), Jeremy Scorer (HIT Training) and Kerry Raworth (Marston’s); Best Managed Training Programme over 50 outlets: BrewDog, Fuller’s and Stonegate Pub Company; Best Managed Training Programme under 50 outlets: Brewhouse & Kitchen, Brasserie Bar Co, University of Surrey Students’ Union and Wells & Co; Best Casual Dining Training Programme: Brasserie Bar Co and The Grey Mare; Best Leased and Tenanted Training Programme: Greene King and Marston’s; and Best Apprenticeship Training Programme: Fuller’s, Greene King and St Austell Brewery.

The Franca Knowles Lifetime Achievement Award, sponsored by Sky, will be chosen by a panel led by Keith Knowles, chief executive and founder of Beds and Bars. This award will identify and recognise an individual working in the on-trade sector who leads by example and demonstrates training and people are at the core of what they do. This is an industry recognition award rather than a category open for entries and is in memory of the late Franca Knowles, who herself was a multiple winner of NITA awards.

Tickets for the NITAs are £150 plus VAT and can be booked by emailing anne.steele@propelinfo.com

Time Out Market in BostonRichard Caring, the serial sector investor, has built up a stake of just under 7% in the listed global media and leisure business Time Out Group. An announcement by the company late on Friday (18 October) disclosed Caring has built a stake of 6.59% in the food market operator.

It makes Caring the fourth-largest shareholder in the business behind Oakley Capital Private Equity (33.69%), Oakley Capital Investments (23.35%) and Invesco Perpetual (11.94%). It is thought the serial sector investor acquired his stake in Time Out Group through its share placement earlier this month. Time Out Group raised £17.1m through the placement of 13,468,939 shares at 127p each.

The company stated: “The directors believe the placing will provide capital for Time Out’s next stage of development. The proceeds will provide additional financing for continued investment in the roll-out of Time Out Market and allow the group to reduce its indebtedness.”

It is thought the acquisition of a stake in Time Out Group marks Caring’s first investment in a public company since he owned a 12% stake in Carluccio’s before it was taken private in a £90.3m deal by Middle Eastern retail and leisure giant Landmark in 2010. At the same time, Propel understands Caring has changed his mind about what he will open at the former Princess Garden of Mayfair restaurant site in North Audley Street, Mayfair.

Last year, Caring said he would launch a Caprice Cafe concept on the site, which he acquired more than two years previous. As with the Ivy Collection and Harry’s Bar/Dolce Vita, it was thought the new concept would be a more accessible version of an existing Caprice Holdings restaurant – this time Le Caprice, the company’s modern British restaurant in St James’s, Piccadilly.

However, it seems Caring has had second thoughts, and now it is thought the new restaurant will be a one-off rather than a concept to roll out, and have the name La Caprice Cirque. Caring, who also backs the Ivy Collection and Bill’s, is also believed to be the early front-runner to take the top floor of the 100 Liverpool Street development in Broadgate for a new restaurant and bar.

Luke JohnsonGail’s Bakery, which is backed by sector investor Luke Johnson (pictured), has seen like-for-like sales grow more than 8% in the first half of this financial year, Propel has learned. The company, which has 53 outlets, is set to open four sites in the next month with further plans to develop a grab-and-go coffee offer within transport hubs as it looks to double its number of premises in three years.

Gail’s managing director Marta Pogroszewska told Propel the business, which specialises in freshly baked bread and pastries alongside a premium coffee offer, is feeling “quietly confident current growth is sustainable in the mid to long-term”.

She said: “We are operating in a difficult climate and acknowledge things can go wrong but, having looked carefully at our business model, we feel confident we can continue to increase our volumes year on year.”

The company is set to be trading from 60 sites by the end of its financial year, March 2020, including Willesden Green in north west London, which will launch on Friday, 1 November. This will be followed in quick succession by Gloucester Road in Kensington, Cambridge and Islington, north London.

Pogroszewska said: “We will be tactical in terms of finding the right ‘neighbourhood’ sites but feel opening 15 a year is totally do-able.” In the past two years Gail’s, which employs almost 1,000 people, has halved its staff turnover through implementing a comprehensive “employee value proposition” and focusing on team engagement across the business.

At least half the team in any new bakery is deployed from existing teams to maintain a strong company culture. Meanwhile, Sky News has reported Johnson is reviving plans for a sale of Gail’s and has started to sound out bankers about an auction of part or all of Bread Holdings, Gail’s parent company. A sale is expected to take place in 2020. Johnson’s renewed exploration of a sale of Bread Holdings comes two years after he initiated a previous auction. However, the process was put on hold at the end of 2018.

The new Fazenda in Birmingham being opened by City District GroupCity District, owner of the Fazenda Rodizio Bar and Grill concept, is “trading ahead of budget” in its current financial year. City District also has no plans to add to its portfolio in the short term as it holds off investment until it sees how the economy shapes up following Brexit.

Managing director Tomás Maunier told Propel: “We are trading well so far this year – ahead of budget and year on year, which is a great thing. However, we can’t forget the first half of last year was a difficult one for the restaurant industry due to the Fifa World Cup and unbelievable weather.”

Maunier spoke to Propel as City District reported turnover increased to £17.0m for the year ending 31 March 2019, compared with £13.0m the previous year. Operating profit was down to £243,000, compared with £743,000 the year before. Pre-tax profit fell to £135,000, compared with £730,000 the previous year.

Gross margin was down slightly to 66%, compared with 67% the year before. During the year, City District opened a Fazenda site in Birmingham to add to its venues in Edinburgh, Leeds, Liverpool and Manchester. The company also operates Picanha in Chester while in July last year it launched Tast Cuina Catalana in Manchester in partnership with Manchester City manager Pep Guardiola and Michelin-starred chef Paco Perez.

In their report accompanying the accounts, the directors stated: “Despite the challenging market conditions, the board is pleased with the performance following the year end and is pursuing opportunities for further expansion if appropriate sites become available.” The number of employees at the end of the period rose to 359 from 252 the previous year. Earlier this year, City District Group underwent an internal restructuring of its ownership with backer LLB Investments, resulting in a management buyout.

Greene King chief executive Rooney AnandCasual Dining Group chairman and former Greene King chief executive Rooney Anand has stepped down from the board of Chiktopia as non-executive director.

Anand joined the board as the better chicken concept opened its debut site, at Intu Lakeside in Essex, in the summer, and follows a personal investment he has made in the company, joining other industry leaders such as Abokado chief executive Mark Lilley, Tortilla managing director Richard Morris and Mystery founder Dan Einzig. It is understood Anand retains an advisory role.

Chiktopia, led by former Ole & Steen operations director Alastair Gordon, uses technology to offer a counter-less restaurant with 100% kiosk and app ordering. In May, Gordon told Propel the Chiktopia team would concentrate on the Lakeside site this year to make sure the offer was “absolutely right” before looking at potential expansion.

He said: “We have a compelling offer with an excellent price point but the rest of this year will be about spending the time working out what works and what doesn’t. We’ve been in this game long enough to know we can’t just start a mass roll-out.”

Chick-fil-AChick-fil-A, the largest chicken and third-largest US fast food restaurant chain, will cease trading at its first UK outlet amid a row over donations to anti-LGBT groups. Gay rights campaigners called for a boycott of Chick-fil-A, which opened its first branch at The Oracle shopping centre in Reading on 10 October.

A spokeswoman for the centre told the BBC the “right thing to do” was to not extend the restaurant’s lease beyond the “six-month pilot period”. Chick-fil-A said its donations were purely focused on youth and education. The family-owned company, founded in Atlanta in 1967, has about 2,400 outlets across North America.

According to US news website Think Progress, the Chick-fil-A Foundation donated millions of dollars in 2017 to the Fellowship of Christian Athletes, the Paul Anderson Youth Home and the Salvation Army. Campaigners from LGBT organisation Reading Pride said all three organisations have a reputation of being hostile to LGBT rights. A

Reading Pride spokesman said the six-month period was a “reasonable request to allow for resettlement and notice for employees that had moved from other jobs”, but added the group would continue to “campaign against the outlet until it leaves”.

Chick-fil-A previously told the BBC: “We have never donated with the purpose of supporting a social or political agenda. There are 145,000 people – black, white, gay, straight, Christian, non-Christian – who represent Chick-fil-A.”

Barworks has opened Mare Street Market in HackneyLondon bar and pub operator Barworks is planning to take over the site previously housing Jamie Oliver’s Fifteen restaurant in Hoxton, Propel understands. The company, which is led by Marc Francis-Baum, has applied to open on the site, with it expected to reopen as a pub.

The Jamie Oliver-backed social enterprise, which ran apprenticeships for young people from disadvantaged backgrounds, was one of 22 sites that closed when the Jamie Oliver Restaurant Group entered administration in May.

Barworks recently reopened the former Beef & Brew site in Hackney, under its original name, the Duke of York. The bar has been moved to the centre of the room and, while the key offering is drink, it offers a small pizza and pasta menu alongside Sunday roasts.

Barworks is also working on the White Bear in St John Street, Smithfield, which is expected to reopen in mid-November. Barworks operates 13 pubs, plus Mare Street Market (pictured) and five under The Diner name, which have been part of Barworks since July. The Diner sites will be converted to independent wet-led operations during the next year.

Luke JohnsonSector investor Luke Johnson is set to receive around £12.5m after the board of Elegant Hotels, the operator of seven freehold hotels sites in Barbados, accepted a takeover offer from Marriott of 110p a share, a 56.8% premium on the closing price over a recent three-month period.

The offer values the company at £100.8m plus net debt of $68.9m. Johnson owns 12.5% of the company’s shares (11.1m shares) – and is one of three directors to give irrevocable undertakings to sell. He is the largest individual shareholder and joined as a non-executive director in 2017.

Elegant owns and operates seven luxury freehold hotels and a beachfront restaurant, Daphne’s, on the island of Barbados. Elegant’s portfolio currently comprises 588 rooms, making it twice as large (by room number) as the closest competitor in the Barbados luxury hotel room market.

Six of the seven properties are situated along the prestigious west coast of Barbados commonly known as the “Platinum Coast”. The properties are all freehold, with a total aggregate plot size of approximately 23 acres and an aggregate beachfront of approximately 2,600 feet.

Commenting on the acquisition, Simon Sherwood, non-executive chairman of Elegant, said: “The board of Elegant Hotels is confident in the group’s long term prospects but believes that this offer represents compelling value for our shareholders and a great opportunity for our employees to be part of one of the world’s leading hotel companies.

“The fact that Elegant Hotels has attracted the interest of a company of Marriott’s calibre is a resounding endorsement of the outstanding quality of our properties, operations and people, and indeed of Barbados as a highly desirable destination. We are therefore unanimously recommending the offer to our shareholders.”

Arne M Sorenson, president and chief executive of Marriott, said: “There is a strong and growing consumer demand for premium and luxury properties in the all-inclusive category. The addition of the Elegant Hotels portfolio will help us further jumpstart our expansion in the all-inclusive space, while providing more choices on the breathtaking island of Barbados for our 133 million Marriott Bonvoy members.”

TortillaTortilla, the Quilvest-backed, fast-casual Mexican concept, is to make its transport debut, after signing a development agreement with food travel experts SSP, Propel has learned. The agreement will see the Richard Morris-led Tortilla open its 43rd UK restaurant in London’s Euston Station, with a further four openings planned in key travel hubs next year.

Propel understands Tortilla will replace SSP’s own Mi Casa Burritos brand in some locations, including Euston. SSP also operates Mi Casa sites in stations including Waterloo, Victoria and Birmingham New Street.

The agreement follows recent openings for Tortilla on Wardour Street in Soho London, Cabot Circus in Bristol, Market Square in Cambridge and Cornmarket Street in Oxford; bringing the group’s total estate to 50 restaurants, including Euston and its sites in the Middle East. In addition, the brand is set to re-open its location in Westfield London as part of the shopping centre’s new food court. The newly refurbished site opens next Monday (21 October) and will feature a new evening menu.

On the SSP link up, Morris, managing director of Tortilla, said: “This creates fantastic growth opportunities for Tortilla in some outstanding travel locations around the UK and hopefully further afield. We’re looking forward to seeing Tortilla Euston in action.”

Business development director of SSP UK and Ireland, Andy Webb, said: “We’re delighted to have added high-street favourite Tortilla to our list of brand partners. This new unit will be an exciting addition to the food and beverage offer at Euston, and we’re confident they will be well-received by travellers passing through the station as well as those who live and work in the area.”

The Alchemist general viewThe Alchemist, the 17-strong Simon Potts-led bar and restaurant concept, is set to make its debut in Scotland next year, after securing a site in Edinburgh, Propel has learned.

The company is to take space in Edinburgh St James, the new mixed used scheme in the heart of the Scottish capital, which will feature 850sq ft of retail space, 152 apartments, an Everyman cinema, a W Hotel, restaurants and bars and anchored tenant John Lewis.

The Palatine backed firm, which will open a flagship site in Canary Wharf next month, has taken an upper unit flanking the entrance to the development from Princess Street and Waverley train station. The new c6,000 sq ft site will feature a c600 sq ft terrace and have space for c210 covers. It is expect to be open by October 2020.

Potts told Propel: “Edinburgh is one of the world’s great cities and a destination we’ve long admired – we wanted to wait for the right opportunity to present itself and the St James’ development fits the bill brilliantly, a vibrant and varied scheme that will appeal to tourists, office workers, residents and shoppers – the same audience that love our established venues in London and Manchester. We’re delighted to have agreed a deal and look forward to getting to work on the design and delivery of the project in the new year.”

In July, the company, which recently opened in Gunwharf Quay, Portsmouth, secured a site in Cheltenham’s Brewery Quarter to add to its 2020 pipeline, which will also include an opening in Embassy Gardens, London. It is also understood to be in talks on a site in Bristol. DCL and P-Three are letting agents on Edinburgh St James.

EasyhotelSuper-budget hotel operator and franchisor Easyhotel has reported total system sales rose 28% to £47.8m for the financial year ended 30 September 2019. Owned hotels saw revpar like-for-like up 7.7% whilst franchise like-for-like was down 1.6%.

The company stated: “The UK Mid-scale and economy segment of the hotel market has continued to be impacted by the ongoing political and economic uncertainty with revpar down 0.7% for the period, according to STR Global.

“Although the London market has continued to perform strongly, with revpar growing by 4.5%, the regional UK market’s revpar has remained weak, down some 2.8%, with a number of regions experiencing double digit revpar declines during the calendar year.

“Whilst the European markets have on the whole continued to outperform the UK, performance has been mixed on a country-by-country basis with revpar growth slowing during the second half of the financial year. Performance across the group’s franchised hotels has marginally improved during the second half of the financial year, despite market weakness in the Netherlands and Germany.

“Delivering continued market outperformance in challenging trading conditions has required an investment in both price and an increased use of online travel agents (OTAs). The group has maintained a tight control of central costs, in support of delivering its year end targets, but against this more challenging trading environment the board anticipates that group adjusted Ebitda will closer to £4.6m for the year ended 30 September 2019.

“During the second half of the period the group has successfully refurbished and reopened Easyhotel Old Street (89 rooms) and let the self-contained 15,500 sq ft offices. Easyhotel Milton Keynes (124 rooms) opened earlier than planned and both hotels are trading strongly. On 1 October 2019 the group completed the acquisition of the 87-room Ibis Palais de Congres in Nice, with the hotel opening for trading immediately on completion.

“Although, the group has experienced planning delays for some of its hotels currently under development, it still expects to open 385 rooms (which includes the 87 rooms for Nice) across four hotels in the next financial year ending 30 September 2020. A further 701 rooms are expected to open in the following financial year. During the period the group opened two franchised hotels, at Zurich (39 rooms) and Amsterdam Schiphol Airport (154 rooms). Malaga (146 rooms) will open in the next financial year. Although the pipeline for franchised hotels is strong, it is unlikely that the hotels in Bur Dubai, Istanbul, Iran or Sri Lanka will open.”

Guy Parsons, chief executive of Easyhotel, said: “The hotel markets have remained challenging in the second half of the financial year, particularly in the UK where we are seeing dampened consumer confidence. Whilst our owned hotels have continued to outperform the market, we have not been immune to the weaker regional hotel market and trading across our franchised portfolio has continued to be subdued.

“Whilst we don’t foresee any improvement to the trading environment in the medium term, we are focused on our strategic priorities and believe the current economic uncertainties will present attractive investment opportunities to continue to expand our development pipeline in our target destinations, underpinning the long-term growth of the brand.”

Omar AllibhoyTapas Revolution, the Mobeus Equity Partners-backed group, has shaken up its management team with a number of appointments, Propel has learned.

It is understood part of the reshuffle at the company, which this week opened its eighth site, at Westfield Stratford City shopping centre in east London, has been the departure of managing director Mac Plumpton, who had been with the business for more than nine years.

The business, which is led by chef Omar Allibhoy (pictured), is understood to have appointed David Booth, formerly of Giraffe, CAU and La Tasca, as head of restaurants with a focus on guest engagement, while Vicki Patterson, formerly of Redcomb Pubs, has joined the company as head of marketing.

At the same time it’s understood Andy Smithard, former head of marketing and sales at Casual Dining Group, has joined the business as head of sales, while Farid Boroomandfar, formerly of Las Iguanas and La Tasca, has been appointed special projects manager. The moves follow Tapas Revolution’s appointment of former La Tasca group operations director James Picton as commercial director.

The company’s 100-cover restaurant in Westfield Stratford City’s Chestnut Plaza features a terrace and offers signature Tapas Revolution dishes such as tiger prawns with garlic and chilli oil, and beef and pork meatballs in tomato and vegetable sauce. The venue also focuses on paella, served in a traditional wide-bottomed pan, while there is a cava bar and two VIP bodega booths, which feature “press for cava” buttons. The company secured £2.5m of new investment from Mobeus Equity Partners in 2017.

Barburrito at Bristol airportBarburrito, the BGF-backed Mexican chain, has exited two of its three London sites, Propel has learned. The circa 20-strong company has exited its sites in Hammersmith and Farringdon, leaving it with a venue at Paddington station.

The company recently opened a site with TRG Concessions in Gatwick airport in Sussex and has signed up to launch a site in the Manchester airport extension.

Founder and chief executive Morgan Davies told Propel: “Hammersmith and Farringdon were nice sites but, at the end of the day, weren’t suited to our model. In the end, we received good offers to exit and took the opportunity to refocus our operation.

“All staff have been given the option to relocate and we have strengthened the team at Paddington, which continues to trade well. We are committed to London and will open stores in the capital in due course. In the meantime, it’s great to be operating in two of the capital’s strongest transport hubs. Overall trade remains strong and ahead of sector benchmarks.”

The Bill's site at St Martins Courtyard in Covent Garden – one of three Bill's 2.0 sites dialling up the "best of Bill's"David Campbell, chairman of Richard Caring-backed business Bill’s Restaurants, has told Propel the continued success of the company’s refurbishment programme has given the business the confidence to return to the acquisition trail after an almost two-year absence. By September, the 78-strong company had refurbished 27 sites – 40% of its estate.

The refurbishments have been directed by founder Bill Collison and remain true to his original principles by reimagining the Bill’s offering across “every aspect of the restaurants’ operation”. By the end of August, the company had completed nine consecutive months performing ahead of the CGA Peach Tracker. For the first three quarters of 2019, like-for-like sales for the total business have been up 8.8% against the same period in 2018 and significantly ahead of this for the refurbished restaurants sub-set.

The company said: “Importantly, the momentum in the existing business and refurbished restaurants has seen Ebitda more than double versus the same period in 2018.” The success of the refurbishment programme has meant like-for-like sales growth has been ahead or around 5% for the entire business since the start of the year, reaching as high as a 14% uplift in July. The refurbished estate has seen like-for-like sales growth up by as much as 23% year-on-year.

In December 2018, sales were £120.7m for the past 12 months. This year to September they stood at £127.5m. Meanwhile, Ebitda for the 12 months to September has grown from £5.5m to £8.8m. Propel understands Ebitda is set to be more than £10m for the 12 months of 2019. Campbell said given the success of the refurbishment programme, coupled with the business’ overall momentum, the company had decided to roll out the refurbishment programme across the rest of the estate.

He told Propel he hoped to have the full estate refurbished by the end of 2020. During the previous financial year the company entered a new debt facility with HSBC that stood at £41.23m, which Propel understands has subsequently been increased to £47.5m. The new funding will help the refurbishment programme and the group’s return to the acquisition trail, with its first new restaurant in about two years to open this month in Spinningfields, Manchester, followed by an opening in Gunwharf Quays, Portsmouth. Propel understands a third site, at Cheshire Oaks, is also set to be added to the brand’s pipeline.

Campbell told Propel: “You can’t make an impact with two or three refurbishments, the changes need to be done at scale. You have to make a decision reasonably early on those that are working or not working.”

The company has also consolidated parts of its estate in the past year, including disposal of sites in Battersea and Hoxton. Campbell said: “In this market you have to be flexible and realise some locations that previously worked may have moved away from Bill’s. At the same time, we have received offers that have made sense to accept.”

The company reported turnover of £175.0m for the 74 weeks to 30 December 2018 compared with £118.6m for the 52 weeks to July 2017 as the group’s reporting came in line with Caring’s other restaurant businesses. Adjusted Ebitda before pre-opening and exceptional costs during the period was “disappointing” at £9.9m, compared with £13.6m in the previous period, which the company said reflected “well-reported challenges from the macro-economic environment and those specific to the casual dining sector”.

The company made a £9.11m loss last year compared with a £3.5m pre-tax profit in 2017. It said the losses related to £10.3m in exceptional items, including £4.1m in impairment and property lease premiums, £2.5m in refurbishment costs and a £1.2m write-off for the abandoned Bill’s-to-go concept, which had the working title Vitesse.

Domino'sDomino’s Pizza has reported UK like-for-like sales, excluding splits, rose 3.0% in the 13 weeks to 30 September while it intends to exit four of its international markets “in an orderly manner”.

The company said normal working practices “continue to be impacted by our franchisee dispute”. Group system sales were up 3.4% to £313.5m, with UK system sales increasing 3.9%.

It now has 1,172 stores in the UK and Ireland – nine stores opened in the UK in the period. A total of 16 stores have opened in the UK in the current financial year while there has been one planned closure. Online sales in the UK during the third quarter were up 7.2% and represented 80.8% of total sales during the period.

The company said the search process for the new chief executive continues and the process for the new chairman, led by Ian Bull, had commenced, with recruiters appointed. The company said it intends both processes are progressed as quickly as possible. Elias Diaz Sese, previously Northern Europe managing director at Kraft Heinz, has been appointed as an additional non-executive director.

Chief executive David Wild said: “We delivered a solid performance in our core UK and Ireland markets, with system sales up 3.9%, against a market backdrop that remains challenging. Normal working practices continue to be impacted by our franchisee dispute. As we said at our interim results, this situation is complex and we expect a resolution to take time, certainly into 2020.

“We remain committed to working with our franchisees to agree sustainable win-win solutions. We are investing in people and processes to enable us to better support our franchisees. A key hire for our business is Emily Somers, who joined us as chief marketing officer in August, and I am delighted to have her as part of the team. Although the financial results have stabilised, the performance of our international business remains disappointing.

“Over the past six weeks we have completed a review with external consultants, assessing each of our four international markets and the future prospects for our businesses. We have concluded that, while they represent attractive markets, we are not the best owners of these businesses. The board has therefore decided to exit the markets in an orderly manner.”

Republic of Ireland system sales grew 2.4% in local currency, with like-for-like sales, excluding stores in split territories, down 0.7%. The company opened three stores in the country during the period. In its international markets, Switzerland saw local currency system sales fall 2.9%, with like-for-likes down 6.6%.

In Iceland, local currency system sales were down 1.0%, and like-for-like sales dropped 8.2%. There was one planned store closure. In Norway, system sales were down 0.3% in local currency, with like-for-likes in Domino’s branded stores dropping 16.5%. During the quarter, the company implemented a turnaround plan in Norway. However, early signs have been mixed and sales uplifts weaker than anticipated. In Sweden, tem sales increased 25% in local currency, with like-for-like sales up 1.0%. Domino’s described the trading performance of its German associate as “encouraging”.

Stonegate Pub Company chairman Ian PayneUKHospitality has announced the winners of the 2019 Dusk ’til Dawn Late Night Awards, held in association with Propel. The winners were announced at a gala ceremony at the Troxy, London, last night (Wednesday, 16 October), with UKHospitality recognising the diversity of the UK’s innovative bar and late-night sector across eight categories.

The winners were Best Late Night Food: The Alchemist; Best Late Night Drinks: Dirty Martini; Best Late Night Entertainment: The Deltic Group; Best Service & Team Development: New World Trading Company; Best Marketing & Promotions: Stonegate Pub Company; Best Late Night Bar: Belushi’s, Camden; Best Late Night Club: Eden; Best Late Night Company: DHP Family. The Icon award recognising outstanding contribution to the sector was given to Stonegate Pub Company chairman Ian Payne (pictured).

UKHospitality chief executive Kate Nicholls said: “Dusk ’til Dawn is about recognising and celebrating the best the UK’s night-time economy has to offer. This is a sector that has undergone dynamic change to reinvent itself during the past decade. Our awards recognise every facet of a great, modern, late-night experience and our winners are the best in a very competitive sector.

“Congratulations to all the winners in what was a very hard-fought competition with a record number of entries and thank you to my fellow judges, who gave up their time to review and assess the entries. A special thanks also needs to go to this year’s Icon Award recipient, Ian Payne. He has been a long-standing and hard-working champion of the sector and deserves to be recognised and praised. He is truly a legend of the late-night sector with a dedication to, and passion for, late-night hospitality that is without equal.”

Black Sheep CoffeeLondon-based speciality coffee shop operator Black Sheep Coffee is due to pay another £1.4m on top of the initial £2.4m it paid to acquire eight Taylor St Baristas cafes earlier this summer.

A statement of administrators’ proposal on Taylor St Baristas by Asher Miller and Henry Lan, of David Rubin & Partners, has revealed the additional figure. The remaining payment was due to be made in three tranches – £400,000 in June, which was deferred, £500,000 that is due this month and a final £500,000 in March 2020.

The administrators said given the £1.4m owed was now Taylor St Barista’s primary remaining asset, they were now working on a strategy to allow prompt realisation of the funds in order to reach an optimal outcome for creditors. Preferential creditors are expected to be paid in full, while an unspecified dividend is expected to be paid to unsecured creditors in due course.

Black Sheep Coffee, which earlier this year raised £13m in a new funding round, has since started to convert the London sites it acquired to its own brand. The initial £2.4m was funded from existing cash reserves. The report showed Taylor St Baristas, founded in 2006 by siblings Andrew, Laura and Nick Tolley, had “consistently made substantial losses”.

It had liabilities of almost £3m when it went into administration in the summer. The company’s turnover for the year ending 31 March 2018 was £5.6m, with retained losses of £744,600. For the year ending 31 March 2017 turnover was £3.8m with retained losses of £882,500, while for the year ending 31 March 2016 turnover was £3.8m with retained losses of £1.0m. Taylor St Baristas had been funded by private loans and a £1.8m crowdfunding campaign.

The report showed Taylor St Baristas began to fall behind with its obligations to trade and expense creditors in 2018, which led to its directors selling the retail cafe portfolio. More recently, the business decided to focus on the development of its partnership and wholesale businesses, working with large multinational clients and local specialist operators to grow its speciality coffee programmes. However, despite the sale of the cafes the company’s position had become “terminal” by the end of June this year.

The report stated: “The company had liabilities of almost £3m with assets, even in a best-case scenario, being a fraction of the debt and, therefore, a substantial balance sheet deficit.” The report showed four formal offers were put forward to buy the company.

Coffeesmiths Collective, the Toby Smith-led business that runs various coffee chains including the Department of Coffee and Social Affairs and Filmore & Union, acquired the Taylor St Baristas operations in the UK. This included Taylor St Baristas’ roastery business and customer base along with the Taylor St brand. Richard Shaer, who managed the Taylor St Baristas site in New York, acquired the US business.

German Doner Kebab chief marketing officer Murray WillowsGerman Doner Kebab, the flagship brand of Hero Brands, has appointed Murray Willows (pictured) as global chief marketing officer to spearhead its growth and development.

Willows joins from TGI Friday’s International and will be tasked with continuing to develop consumer awareness of German Doner Kebab and building on its growing profile. The brand is now rolling out aggressively throughout Europe, the Middle East and the US, with more than 700 franchises already signed up to the German Doner Kebab project globally. Willows’ appointment comes as German Doner Kebab forges ahead with plans to open 100 stores in Saudi Arabia in the next ten years.

Chief executive Imran Sayeed said: “Murray’s wisdom, experience and know-how speak for themselves and I believe his appointment is a powerful statement about the direction the company is taking.”

Willows was chief marketing officer at TGI Friday’s International with responsibility for marketing, food and beverage development, and restaurant design in 52 international markets. Willows’ career also includes a number of roles at Yum! Brands, where he was vice-president and chief marketing officer for Pizza Hut in the UK, vice-president marketing for Pizza Hut International and, before that, chief concept officer for KFC in South Africa.

Willows said: “I see this as an amazing opportunity to lead the drive and further strengthen and accelerate German Doner Kebab’s development as a worldwide brand.”

Erpingham House in Norwich, the UK’s largest plant-based restaurantErpingham House, the UK’s largest plant-based restaurant, has launched a virtual sub brand, Propel has learned. Founder Loui Blake has launched vegan pizza concept Vegan Dough Co, which is available via Deliveroo or to collect from its restaurant in Norwich.

The offer includes the Mushroom Truffle Shuffle, which is made with a soya-based cheese, and the No Meat Feast, which features tempura, barbecue jackfruit and jalapenos. Sides include vegan mac ‘n’ cheese and buffalo cauliflower wings with a blue cheese sauce. There is also a pudding pizza consisting of Nutella, bananas, strawberries and cream.

Blake told Propel that Vegan Dough Co was “absolutely flying” and made up 10% of Erpingham House’s total revenue in September. He said: “We were keen to tap into the delivery market but a lot of the food on our menu doesn’t travel well. We also wanted to get into the action but without detracting from the core brand so we thought about what food would suit delivery and came up with pizza. It also has a high gross profit.”

Meanwhile, Blake has passed the halfway point of his £250,000 fund-raise on crowdfunding platform Crowdcube to help Erpingham House open a second site, in Brighton. Blake is offering 15% equity for the investment, giving the company a pre-money valuation of £1.4m. The funds will also be used to improve the Norwich site. So far, 127 investors have pledged £140,290 with 17 days of the campaign remaining.

The new Erpingham House will still specialise in vegan food but with the offer refined to appeal to a more general audience. Like its debut site, the new venue will be free from single-use plastic and be almost 100% carbon neutral. Building work on Erpingham House Brighton will begin once funds have been raised, with an aim to open in early 2020. Blake also operates all-day vegan cafe concept Kalifornia Kitchen.

Propel insights editor Mark Wingett will look at why US brands are eyeing UK launches and whether they might have finally learned from each other’s mistakes in his latest opinion piece, which will be sent to Propel Premium subscribers on Friday (18 October) at 5pm. Meanwhile, Premium Diary will look at the latest industry rumbles and rumours.

Propel Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out, discounts to attend Propel conferences and events, regular video recordings of key speakers from Propel events and conferences, and regular columns from Mark Wingett. They also receive access to our database of multi-site companies, which has grown to 1,500 businesses.

An annual premium subscription costs £345 plus VAT for operators and £445 plus VAT for suppliers – plus £50 each for additional team members. Email anne.steele@propelinfo.com

Loungers' Establo Lounge site in Rustington, West SussexLoungers, the operator of 157 neighbourhood cafe-bar restaurants that trade under the Lounge and Cosy Club brands, has reported like-for-like sales grew 5.4% for the 24 weeks ending 6 October 2019.

Total revenue for the period was up 22% over the prior year, to £79.8m. Over the course of the period, the group opened ten sites, comprising eight Lounges and two Cosy Clubs, taking the portfolio to 156 sites as of 6 October 2019.

Since then, the group’s 27th Cosy Club opened in Basingstoke last week, and a further three sites are scheduled to open before the end of the month. These comprise of a Cosy Club in Plymouth and Lounges in Carmarthen and Buxton. The group said it was on track to open 25 sites in the financial year and the pipeline remains “strong”.

Chief executive Nick Collins said: “Both Lounge and Cosy Club have continued to perform well, reflecting the growing appeal of our customer offer in the communities in which we serve. Our broad, value for money proposition across multiple occasions underpins the resilience of our trading and leaves us well placed to continue to outperform the market. We remain confident of delivering another year of positive progress for the group and are encouraged by the performance of our new openings.”

Loungers said it expects to announce its half-year results on Wednesday, 4 December.

D&D London in legals on two new UK sites, waiting on Brexit outcome before shaping long-term expansion strategy

Des Gunewardena, chairman and chief executive of restaurant operator D&D London, has told Propel the company is in legals on two UK sites.

Speaking on the back of D&D London’s full-year results, where turnover rose 13% to £145.6m for the year ending 31 March 2019, Gunewardena said a new site in London was planned for autumn 2020, while another UK regional city launch was on the cards for 2021. The company is already set to open 14 Hills in London’s Fenchurch Street next month and a restaurant and events venue in the Quakers Friars building at Cabot Circus in Bristol around Easter.

Gunewardena (pictured on left with David Loewi) said: “We remain focused on UK expansion and we’re actively looking at other UK opportunities.” However, he admitted the lie of the land post-Brexit would determine whether its long-term expansion strategy would focus on the UK or the US and other international locations. Gunewardena said the company had been approached to open in a number of US cities on the back of its launch of Bluebird and Queensyard in New York.

However, he said: “We have not yet formed a view on where else our restaurants could be successful. Short term, establishing ourselves as long-term players in New York is our priority.” Gunewardena said trading on a like-for-like basis had been down in April and May due to the timing of Easter and “much better weather” last year, given a lot of its restaurants have terraces. Since June, established restaurants are up 2% on a like-for-like basis.

Regarding the outlook, Gunewardena said: “We are expecting a tough October and early November whatever the outcome of Brexit. We are obviously hoping for a positive conclusion to the EU negotiations and think there could be a bounce-back in confidence and a strong crucial pre-Christmas period – but we can’t be certain about that. Long term, our expansion strategy – ie focus on UK or US/overseas – will be based on how the UK economy performs and how we’re able to deal with issues surrounding staffing, cost of ingredients etc in a post-EU UK.”


Deliveroo logoThe Competition and Markets Authority (CMA) has begun a merger investigation into Amazon’s investment in Deliveroo.

The CMA issued an initial enforcement order against the companies in July after Amazon bought a stake in Deliveroo. Now the CMA has announced it has launched a full merger inquiry.

Amazon was the lead investor in a $575m (£457m) financing round announced in May, which valued Deliveroo at more than £4bn. Amazon bought a minority stake in the company.

The CMA stated: “The CMA is considering whether it is, or may be the case, this transaction will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the UK for goods or services. The CMA announced the launch of its merger inquiry by notice to the parties and has a deadline of 11 December for its phase one decision.”

At the time of the enforcement order the CMA said it had “reasonable grounds” for suspecting Amazon and Roofoods, which trades as Deliveroo, had “ceased to be distinct” or were planning to merge, which would break competition rules. Amazon was tipped as a potential buyer for Deliveroo after its own effort at hot food delivery, Amazon Restaurants UK, shut in December barely two years after its launch.

Deliveroo, which was founded in London by former investment banker Will Shu, had also been cited as a possible takeover target for Amazon amid heavy investment in technology. Under the enforcement order, Deliveroo was banned from taking any actions that could lead to its integration into Amazon’s business. Both businesses were forced to maintain their current level of service in the UK and were not allowed to make changes to big contracts or senior management without prior written permission from the CMA.

Earlier this month, Deliveroo reported sales grew 72% to £476m for the year ending 31 December 2018, compared with £277m the previous year. Gross profit increased 42% to £91m, compared with £64.3m the year before. In 2018, loss before tax increased 16% to £232m, compared with £199m the previous year.


Ralph Findlay, Chief Executive, Marston'sMarston’s chief executive Ralph Findlay told Propel it has become tougher to find and retain chefs and general managers. The company is increasing investment in training in the coming year to strengthen its pipeline of internal general managers.

Speaking following the company’s full-year trading update, Findlay said: “Cost pressure has remained pretty relentless for a number of years. One area were it has got tougher is in relation to people – the sector has a real challenge in finding good labour. We are operating in an environment where we pretty much have full employment – people have got choices.”

Findlay told Propel the company has been working to ensure continuity of supply ahead of Brexit, with a focus on identifying alternative suppliers in the event of problems. Meanwhile, Findlay reported he was seeing strong market demand for assets the company was lining up for sale, with sales proceeds expected to be £70m rather than the £40m previously targeted. However, Findlay indicated he didn’t expect to sell Pitcher & Piano, which has been on the market and operates circa 20 sites in England and Wales.

Reflecting on Marston’s results, Goodbody leisure analyst Rachel Fox said: “The group now expects 2020 profit before tax to be at a similar level to 2019 (£101m) given increased disposal activity, additional pub investment and higher interest charges. This results in a circa 9% downgrade to our 2020 forecasts. Despite the acceleration in disposals the downgrade to forecasts means our FY20 leverage forecasts remain broadly unchanged (net debt/Ebitda circa six times).

“Trading on 9.5 times EV/Ebitda, with limited profit growth and high leverage, we view Marston’s as expensive relative to other pub groups in our coverage and continue to see better opportunities elsewhere in the sector. We reiterate our ‘Sell’ recommendation.”

Findlay will talk to Propel insights editor Mark Wingett about the company’s approach to recruitment and retention at this year’s People and Training Conference. The event, organised by the British Institute of Innkeeping in association with Propel, will take place on Tuesday, 26 November at Bafta Piccadilly and is open for bookings.

Other speakers include Charlotte Kemp, head of people and culture at Mission Mars, who will reveal how the company is placing team engagement at the centre of the company’s culture; Jo Fleet, managing director of Flat Iron, who will talk about the company’s approach to giving its staff a fair deal; and Katy Moses, managing director of KAM Media, who will present the findings of exclusive research on how businesses are incentivising their staff in innovative ways.

Tickets are £65 plus VAT for operators who are BII members and BIIAB members and £200 plus VAT for operators who are non-BII members. Supplier tickets are £95 plus VAT for BII members and BIIAB members and £245 plus VAT for all other organisations. To book, email anne.steele@propelinfo.com

Karen Jones, founder, Café RougePrezzo executive chairman Karen Jones has said turning around a big company is not dissimilar to starting your own business from scratch. Speaking at the Women’s Entrepreneur Conference organised by Propel and Elliotts chief executive Ann Elliott, Jones revealed her methods for starting and turning around hospitality businesses.

She told delegates: “Firstly, you must be able to sum up your business in one sentence. It’s difficult but important because if you’re not exactly clear what you are and what you want to do, you’re never going to get that across to your customer. If that’s your strategic ‘what’, you then have to define your ‘how’ – the values on which your company will operate.

“It’s an invaluable management tool because it focuses on building a culture that, if led properly, will give you a competitive advantage. You know that culture has caught fire when those values enter the company vernacular and get talked about all the time. That means they need to be short and simple.

“When I got to Prezzo, the brand definitely needed some direction. Everything aligns behind the ‘what’ and ‘how’ – the strategic pillars, the people, the plans and, most crucially, the energy. If you’re not intensely aligned you lose power and building and turning around businesses takes positive energy every second of every day of the week.”

Talking about the secret to turning a business around, she said: “Having had the privilege of building two businesses from scratch – Pelican and Café Rouge – it is no less fascinating sorting out a big company. The defining jobs aren’t that different – sort the strategy, have a clear goal, find the right people, build a culture, execute brilliantly, don’t forget hospitality is at the heart of what you do, and look after your people and customers. Social media and online gives us so much access to customers’ reactions. If we don’t listen forensically all the time and do something better with that feedback, we’re fools.”

This month Prezzo reported solid like-for-like growth from April 2019, while the company hopes to have 50% of its 185-strong estate revamped by the end of this year and to return to like-for-like growth in its current financial year. Prezzo’s company voluntary arrangement was completed in May 2018, leading to the closure of 109 sites and exit from the group’s Chimichanga, Caffe Uno, Cleaver and MEXIco brands. Jones said: “Our turnaround plan is at an early stage but I’m delighted with the initial results and the positive feedback from our customers and teams.”

Crosstown Doughnuts and Slerp founder JP ThenCrosstown Doughnuts founder JP Then has told Propel he believes there’s “loads of room” in London for the omni-channel retail and bakery brand to grow but he is focusing attention on driving revenues in-house, particularly through digital channels.

The company operates 11 sites and two food trucks, while it also has a presence at nine markets in the capital. Following a period of rapid growth, Then has decided to focus in the short term on growing corporate events and online sales, which is driving 20% of the business’ revenue. He believes the move will also help boost brand awareness as it grows its audience through online channels.

Then said: “We have been continually growing in the five-and-a-half years we’ve been going. We still think there’s loads of room to grow in London but, with the current macro-economic conditions and political uncertainty, we’re pausing with further expansion for the rest of the year and looking to drive revenue growth through existing channels.”

Part of that drive is looking to grow digital sales using on-demand ordering technology Slerp, which Then launched in the summer following three years’ development. Slerp offers a “viable” direct-to-consumer solution for on-demand pick-up and delivery. The technology integrates with a retailer’s website, enabling the business to retain complete control of its brand, customer experience and customer data.

Then said: “We have more than 50 brands signed up and a significant pipeline of companies coming on. We’re now looking to roll it out into the retail sector as I think it could be a real boost to retail operators that are suffering and a tangible solution to digitalise their analogue retail stores.”

CGI of the new restaurant quarter at the St George's shopping centre in PrestonGraphite Capital-backed pub restaurant group New World Trading Company will open a site for its The Botanist brand at St George’s Shopping Centre in Preston.

It will be joined by Indian street food concept Mowgli, which is backed by Foresight Group, in a new restaurant quarter at the complex. Both brands have agreed deals with landlord InfraRed Capital Partners through its asset manager Sovereign Centros.

Work is under way on the 28,000 square foot restaurant quarter, which will create five units fronting Friargate ranging from 3,000 to 10,000 square feet.

The New World Trading Company has signed a 15-year lease on 10,000 square feet to anchor the scheme, adding to its 19 The Botanist sites across the UK.

Meanwhile Mowgli, which was founded by Nisha Katona and operates ten sites, has signed a 15-year lease on 3,400 square feet and will open alongside The Botanist in autumn 2020, when the restaurant quarter is completed. Tom Powell, of Metis Real Estate, advised Sovereign Centros.

WrapchicWrapchic collapsed into administration after shareholders refused to lend further funds as franchisee liabilities resulted in continued losses

Fusion fast food business Wrapchic collapsed into administration after shareholders refused to lend further funds as it continued making losses as a result of being responsible for franchisees’ liabilities.

A statement of administrators proposal by Nicholas Cusack and Rishi Karia, of Parker Andrews, revealed Wrapchic was further hampered by attempted enforcement action by major creditors in respect of outstanding liabilities that remained unpaid. The pressures led Wrapchic founder Mahesh Raikar to seek insolvency advice and to the appointment of administrators.

The report showed Wrapchic turned over £2.5m for the year ending 31 May 2018, with Ebit of minus £230,800. For the year ending 31 May 2017, the company had turnover of £1.4m with Ebit of minus £570,000 and, for the year ending 31 May 2016, turnover was £882,000 with Ebit of minus £278,000.

The report stated: “Despite the fact the majority of the units were operated by franchisees, the leases for 14 premises were in the name of the company rather than the relevant franchisees. The company, therefore, began to experience financial difficulties as a result of franchisees ceasing to trade due to an overcrowded market and lack of footfall or not paying the necessary rent when due.

“As a result, the liability would fall on the company as party to the lease rather than the relevant franchisee, which began to put financial strain on the company and its shareholders. In addition, the overhead costs associated with the central production unit were high compared with the margins the company was making, even when taking into account the royalties due to the company from franchisees.”

The report showed three offers were made for the business, which was sold to Zampor with the company’s intellectual property assigned to Fairway Commerce, for £70,500. Both companies are registered at the same address as Wrapchic. The director of the companies is Atul Patel, who is also a director of Wrapchic.

Vivek Singh, Cinnamon CollectionCinnamon Collection, the company that operates four restaurants in London and a site in Oxford, reported like-for-like sales grew 4.5% for the year ending 30 December 2018.

The company also revealed its positive operating cash flow enabled the settlement of its bank loan and the company now has no bank debt. Turnover in the period was £11.4m, compared with £11.5m the previous year.

Underlying Ebitda fell to £24,000 compared with £614,000 the year before as Cinnamon Oxford and Battersea both matured. Like-for-like Ebitda was up to £760,000 from £684,000 the previous year.

The company incurred exceptional costs of £1.1m, compared with £242,000 the year before, and closed its Soho restaurant during the year. In the period the company made an operating loss of £2.1m, compared with a profit of £562,000 the previous year. The new stores made a loss of £735,538. However on a cash basis, adjusting for the rent-free periods, the loss was £545,277.

In their report accompanying the accounts, the directors stated: “Once there is clarity post-Brexit and the new openings have settled down, Cinnamon Collection will look to expand at a sustainable rate, with restaurants suitable for the environment continuing in its ethos of evolution, innovation and creativity.” The company is a subsidiary of Boparan Restaurant Holdings.

Leon has launched a grocery range following a tie-up with Sainsbury'sNatural fast food brand Leon has launched its first range of groceries following a tie-up with Sainsbury’s as it grows the business beyond restaurants.

Leon has struck an exclusive deal with the supermarket to stock 14 products at more than 600 stores, including sauces from its menu, newly developed condiments and sourdough bread.

The group has been working with Sainsbury’s for the past 18 months. The first range will pave the way for future Leon launches, with further products scheduled to follow in 2020 and beyond. Leon’s deal with Sainsbury’s will see the group exclusively sell products in its stores, although it’s also free to supply independent shops and secure deals with other retailers globally.

Leon co-founder John Vincent said: “Sainsbury’s is a supermarket that, like us, puts food and flavour first so teaming up together makes sense. Now we’re embarking on a partnership that champions food innovation, alongside our values. This new range is an important step for us as a business as we grow beyond restaurants and continue to live out our ambition to help people access naturally fast food every day.”

Rachel Eyre, head of future brands at Sainsbury’s, added: “We are constantly looking for ways to offer our customers new and innovative products and Leon’s flavour-first philosophy can help us do just that.”

Honi Poké's vegan bowlsHawaiian poké specialist Honi Poké has secured its fifth site in London by acquiring a unit in Islington.

The company, which is led by founder Vladimir Martynov and Richard De La Cruz, formerly of two Michelin-starred Sergi Arola and three Michelin-starred Quique Dacosta, has secured a site at 63 Upper Street.

The acquisition complements Honi Poké’s sites in Soho (Dean Street), Fenchurch (New London Street), Marylebone (Margaret Street) and Hammersmith (Lillie Road). The Upper Street unit comprises 794 square feet on the ground floor and is held on a new five-year sub-lease. The site is next to Chick ‘n’ Sours and was a sub-let of surplus space. Davis Coffer Lyons advised Chick ‘n’ Sours on the deal.

Sally French, associate director at Davis Coffer Lyons, said: “Honi Poké is going great guns at the moment, capitalising on the growing trend for healthy raw food and modern flavours. Upper Street is one of central London’s most fertile dining locations. Honi Poké has amassed a great following and I’m sure we will hear news of more acquisitions from the company before the end of the year.”

Millennials / Students enjoying soft drinksLike-for-like sales at Britain’s managed pubs and restaurants grew 1.2% last month despite the retail sector reporting its worst September trading since 1995, according to the latest Coffer Peach Business Tracker.

Wet-led pubs had the best of trading in September, with like-for-like sales ahead 1.9% year-on-year boosted by warm weather, while restaurants and pub restaurants saw like-for-likes up 0.4%. In contrast, figures from the British Retail Consortium (BRC) showed total retail sales down 1.3%, with year-on-year like-for-like trading falling 1.7%. Regionally, outside London traded better in September, showing year-on-year like-for-like growth of 1.3%, compared with 1.0% inside the M25.

“If Brexit worries have put the public off shopping on the high street, they don’t appear to have stopped them going out to eat and drink,” said Karl Chessell, director of CGA, the business insight consultancy that produces the Coffer Peach Tracker in partnership with Coffer Group and RSM.

“Just looking at retail as a barometer of the nation’s well-being you would be forgiven for thinking we were deeply depressed but the eating and drinking-out numbers paint a very different picture. It may be pubs and restaurants are providing welcome relief from the constant news of Brexit uncertainty. The warm weather at the end of the month certainly boosted wet-led pubs and bars, which together recorded a 2.6% like-for-like jump in sales, but it wasn’t just about the weather with restaurants and food-led pubs both seeing growth, if admittedly more modest.”

Trevor Watson, executive director, valuations at Davis Coffer Lyons, said: “The figures show generally encouraging trends across the sector. The comparison with retail illustrates the extent to which consumers are opting for intangible experiences with their disposable leisure spend. This shows a move towards sustainable consumerism, where purchasers shun superfluous fashion goods in favour of experiences and are increasingly looking for sustainably sourced food and healthy-eating menus. We continue to see appetite for good-quality sites nationwide.”

Total sales across the 58 companies in the Tracker, which include the effect of net new openings since this time last year, were ahead 4.3% compared with September 2018. Underlying like-for-like growth for the Tracker cohort, which represents large and small operators, was running at 1.8% for the 12 months to the end of September. This compares with average monthly sales growth in the retail sector of only 0.2% during the past year, an all-time low according to the BRC.

People and Training ConferenceThe British Institute of Innkeeping (BII) has launched this year’s People and Training Conference, which will showcase outstanding people culture among companies in the sector. The event, organised in association with Propel and open for bookings, will take place on Tuesday, 26 November at Bafta Piccadilly.

Yapster co-founder Rob Liddiard will explore how hospitality brands can build company cultures that can thrive in 2020 and beyond. Jackie Moody-McNamara, managing director of Turn the Key and founder of Brilliant Women, will examine seven critical success factors to accelerate the growth of talented women in the sector. Katy Moses, managing director of KAM Media, will present the findings of exclusive research on how businesses are incentivising their staff in new and innovative ways. Charlotte Kemp, head of people and culture at Mission Mars, will set out how the company is striving to place team engagement at the centre of the company’s culture.

Royal Marine major Scotty Mills, who mentored the England football team on how to cope with pressure prior to last year’s Fifa World Cup, will provide his personal perspective on selection, training and team cohesion. Jo Fleet, managing director of Flat Iron, will talk about the company’s approach to giving its staff a fair deal. Kevin Charity, founder and chief executive of Coaching Inn Group, winner of last year NITAs for a managed company with fewer than 50 sites, will talk about creating a people culture, training, staff incentives and encouraging well-being to improve staff retention.

Ralph Findlay, chief executive of Marston’s, talks to Propel insights editor Mark Wingett about the company’s approach to recruitment and retention. Conor Shaw, chief executive of Bizimply, will look at strategies to maximise the performance of site general managers. David Smith, former HR director for Asda, which achieved the number one position as the Best Place to Work in the UK in the annual Sunday Times survey, sets out his seven principles for building a high-performance culture.

There will also be an HR directors’ panel, where Krishnan Doyle, founder of COREcruitment, will talk to Janine Pretorius, people director at The Ivy Collection, Claire Clark, HR director at Casual Dining Group and Tim Painter, HR director at Stonegate Pub Company about the challenges of recruitment and retention in the sector.

Tickets are £65 plus VAT for operators who are BII members and BIIAB members and £200 plus VAT for operators who are non-BII members. Supplier tickets are £95 plus VAT for BII members and BIIAB members and £245 plus VAT for all other organisations. To book, email anne.steele@propelinfo.com

Propel Multi Club June 2019The full speaker schedule for this year’s final Propel Multi Club Conference has been revealed. The full-day event takes place on Thursday, 14 November at the Millennium Gloucester hotel in London. Multi-site operators of pubs, restaurants and foodservice outlets can book up to two free places by emailing Anne Steele at anne.steele@propelinfo.com. The speaker line-up is Christie & Co managing director of pubs and restaurants Neil Morgan, who will set out key trends in the pub, restaurant and hotel mergers and acquisitions market, while Andrew Ball, of sector accountancy specialist haysmacintyre, will report on the key metrics multi-site companies are reporting in this year’s haysmacintyre benchmarking survey. Alison Vickers, owner of Auriac Associates and former business development director for YO!, who is working with Dum Dum Donuts, Island Poke, Barburrito and Black Sheep Coffee, will look at the opportunities for UK brands in transport hubs and international markets through franchising, while Bibendum chief executive Michael Saunders will talk about the key steps in returning the company to health after being saved from the administration of Conviviality. Ali Aneizi, founder of Tamweel, will discuss investor appetite for new and disruptive leisure formats such as crazy golf concept Swingers, pilates and physio operator Ten Health & Fitness, and exercise and entertainment brand Gymbox, businesses Tamweel has raised capital for to finance expansion and/or buy out shareholders. Lorraine Copes, head of procurement at Corbin & King, will offer her top ten insights on how to control the supply chain to maximise quality and value, while Ed Devenport, co-founder of Incipio Group, will talk to Propel insights editor Mark Wingett about how the business, which secured £5m this year to open six sites, creates bespoke consumer venues with an unforgettable atmosphere. Loui Blake, managing director of the UK’s largest vegan restaurant Erpingham House and co-founder of Kalifornia Kitchen, will discuss his business, menu trends and experiences in the US after being awarded the Restaurant Marketer & Innovator scholarship for 2019. Sector entrepreneur Mat Lake will talk about his brands including Junkyard Golf, which is looking to expand into more UK regional cities, late-night dive bar concept Bunny Jackson’s, and record store and cocktail bar Wilderness Trading. Propel managing director Paul Charity will talk to Wagamama and Hakkasan founder Alan Yau about his career in restaurants, current and future trends, and gaps in the market, while Andy Lewis-Pratt, who launched Xscape and is now chief executive of Market Halls, will talk about the three-year global research that went into his reinvention of the food hall concept, how the offer is evolving, and plans to open sites across the UK.

Restaurant Marketer & InnovatorThe Restaurant Marketer & Innovator Awards is open for entries. The awards, in their third year, recognise outstanding marketing and innovation in the sector. Finalists will be invited to an awards ceremony at Cafe de Paris in London on Wednesday, 22 January, which will be the grand finale of the Restaurant Marketer & Innovator European Summit, which takes place over two days.

Awards are open to any eating or drinking out brand or outlet in Europe. There are 13 categories – Integrated Campaign of the Year, Digital Campaign of the Year, Innovation of the Year, Launch Campaign of the Year, Best Use of Technology, Best New Website, Best Use of Video, Best New/Improved Visual Identity, Best Use of Social Media, Best Use of Research/Insight/Data, Marketer of the Year, Innovator of the Year and Future Marketing Leader of the Year.

Propel managing director Paul Charity said: “We launched this event two years ago and now have 850 people from across Europe attend the various segments. The awards recognise the very best within the spheres of foodservice marketing and innovation.”

Awards co-founder James Hacon added: “We are back after an incredible awards programme in 2019 that attracted more than 120 entries. We created the awards to recognise the growing importance of marketing, innovation and strategy professions within the restaurant and foodservice sector. We saw a superb calibre of entries last year and have amazing momentum with our events throughout the year. We’re expecting an even more impressive list of entrants this year.”

The closing date for entries is 11.59pm on Thursday, 31 October. Entry information and criteria can be found by clicking here

Casual Dining SummitPropel has launched the Casual Dining Summit in which some of the sector’s leading operators – big and small, new and established – will share expertise and insights into how they are seeking to win in one of the toughest trading environments ever experienced.

The full-day event takes place on Friday, 8 November at One Moorgate Place in London and is open for bookings. The event will see a wide spectrum of company leaders and entrepreneurs from across the industry talk about the strategies they have put in place to make sure their businesses have been able to survive, thrive, evolve or pivot.

Speakers will include YO! chief executive Richard Hodgson, who will explain the group’s move away from being a pure restaurant-focused business to becoming a global multi-format, multi-channel company; Tom Molnar, founder of Gail’s, who will chart the brand’s growth trajectory and evolution into a growing force on the high street; Shereen Ritchie, UK managing director of Leon, who will set out how the healthy-eating chain has focused on its core offer to remain relevant; and Byron chief executive Simon Wilkinson, who will discuss the steps being taken to turn the brand around and how it plans to differentiate itself from the pack.

The day will also see Giggling Squid’s Andy Laurillard discuss how the Thai brand’s trading model is proving successful in the regions, its expansion strategy and potential; Red’s True Barbecue co-founder James Douglas talk about the rise, fall and re-emergence of the smokehouse concept and the lessons he has learned during that time; and Brasserie Bar Co chairman Mark Derry explore the steps the group continually takes to make it future-proof, its daily quest to control costs and improve NPS scores.

They will be joined by Prue Freeman, founder of fledgling group Daisy Green, who will discuss how the independent business has managed to grow a presence in London in the highly competitive all-day dining market; and Phil Eeles, co-founder of Honest Burgers, who will talk about how the business has avoided getting caught up in the wider issues the better burger category has faced, its culture and whether now is the time for it to diversify.

There will also be a panel session featuring Thom Elliot, co-founder of Pizza Pilgrims, Dan Houghton, co-founder of Chilango, and Gavin Adair, managing director of Rosa’s Thai, who will explore the benefits and challenges that come with offering a delivery option, its impact on business models, staff and expansion opportunities. NPD Group insights director Dominic Allport will highlight the underlying rude health of the sector despite the well-publicised challenges.

Propel managing director Paul Charity said: “I am delighted to launch the Casual Dining Summit. The sector’s woes have been well publicised but it’s time to shine a much-needed light on how it continues to produce award-winning businesses, industry-leading innovation and national success stories. It is also an opportunity to show how broad a church the sector is, from brands with a global presence to those with aspirations of having a nationwide presence and ones on the comeback trail.”

Tickets are £295 plus VAT for Propel Premium subscribers and £345 plus VAT for all others. To book, email anne.steele@propelinfo.com or call 01444 817691.

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