Star Pubs & Bars

Story of the Day:

Patisserie Holdings could sue auditor over £40m black hole

Luke JohnsonPatisserie Holdings is considering taking legal action against its auditors Grant Thornton for its alleged failure to spot a £40m black hole in the cafe and cake operator’s finances. Grant Thornton, which has been auditor to Patisserie Holdings since 2006, has faced questions over how it remained ignorant of what the operator described as “significant, potentially fraudulent, accounting irregularities” discovered last week. Its actions are likely to be scrutinised by the accountancy watchdog the Financial Reporting Council, reports The Times. It emerged yesterday (Sunday, 14 October) the Patisserie Holdings board, with forensic accountants from PricewaterhouseCoopers, had found overdrafts of £10m were run up on two secret facilities with Barclays and HSBC. The company revealed on Friday (12 October) that, far from having the £28.8m of cash declared in May, it had net debt of £9.8m, a deficit of £38.6m. Speculation over the potential legal action, which could be backed by investors, came as Luke Johnson (pictured), the executive chairman and 37% shareholder, promised to scale back his other commitments to focus on restoring Patisserie Holdings. Johnson, who on Friday led a last-ditch rescue, has reportedly been criticised for spreading himself too thinly, contributing to his “ignorance” of the black hole that precipitated the arrest of chief financial officer Chris Marsh and the launch of an investigation into his activities by the Serious Fraud Office. In addition to Patisserie Holdings, Johnson is on the board of two other quoted companies – Elegant Hotels Group, the Caribbean luxury hotel operator, and Brighton Pier Group, where he is executive chairman. He is also chairman of Bread Holdings, owner of Gail’s bakeries, and chairs the board of trustees of the Institute of Cancer Research. In yesterday’s Sunday Times he said: “There was criticism that I was stretched too thin – fair criticism. We have to dramatically improve systems and controls at Patisserie Valerie, we have to make new appointments in the leadership team and things can’t carry on as they have, obviously. I’m going to get much more involved.” Patisserie Holdings traces its origins to the opening of the first Patisserie Valerie in Soho in 1926. Johnson acquired it in 2006, floating it in 2014, and today it operates 206 outlets. Johnson, who called the fraud “a betrayal”, did not refer to suing Grant Thornton, which declined to comment, but said “a number of things” would come out when accounts for the year to September were published and they would “not be a pretty sight”. On Friday, Patisserie Holdings announced a financial rescue package led by Johnson. He provided a £10m interest-free loan plus a £10m bridging facility to be repaid on completion of a £15.7m share placing with institutional shareholders, including Hargreave Hale, Schroders and Invesco Perpetual. The placing, in which Johnson is expected to buy about £5m of shares, will be priced at 50p compared with the 429½p at which the shares were suspended last week, slashing its market value from £446m to £68m. Describing last week as “rather surreal”, he said the first he had known of the problems was when he sat down at 11am last Tuesday (9 October) with Patisserie Holdings chief executive Paul May for what he thought would be a routine update. Instead, May told Johnson the group’s bank accounts had been frozen and it was close to being insolvent. He said that while putting in money reflected his belief in “the business as an economic entity”, he also felt “a moral obligation”. He said: “There were 2,800 jobs at stake – and the board were determined not to allow the business to go into administration.” Meanwhile, May has stepped down as a non-executive director of The Restaurant Group with immediate effect. The Restaurant Group chairman Debbie Hewitt said: “On behalf of the board, I would like to thank Paul for the very valuable contribution that he has made since joining the business. We understand and accept his decision to step down and wish him all the best for the future.” The Restaurant Group said the search for a new non-executive director had begun.

Coaching Inn Group seeks funding to double size of business

Kevin Charity, founder, Coaching Inns GroupCoaching Inn Group, which has 431 bedrooms across 15 venues in market towns in England and Wales, has told Propel it will seek funds for investment to grow the business in the coming months to “build on the strong platform that has been created”. The company said it had already identified a number of suitable coaching inns to “accelerate its development and double the size of the company”. Coaching Inn Group has appointed Sapient Corporate Finance to assist in finding suitable investors. Last month, Coaching Inn Group reported a 39.1% rise in group Ebitda to £2.1m from turnover up 17.2% to £20m in the year to 31 March 2018. Turnover is forecast to pass £24m this year. Drink sales rose 17% to £5.9m, food was up 19.2% to £8m and room sales rose 17.7% to £5.8m. Profit before interest was £506,000 (2017: loss £146,000). A post year-end debt facility of £16.5m was put in place to secure future growth. Coaching Inn Group founder Kevin Charity (pictured) said it cost between £3m and £5m to buy and refurbish venues. The company has added nine sites in the past three years, the most recent being the Feathers Hotel in Ledbury, Herefordshire, and the Swan Inn Hotel in Stafford. Coaching Inn Group is backed by the Business Growth Fund.

Other News:

Tim MartinJD Wetherspoon has launched a poster campaign in its pubs calling on the prime minister to get rid of tariffs post-Brexit. The poster is headlined What don’t you like about free trade, Mrs May?, and states free trade means getting rid of tariffs. It is being displayed in 880 Wetherspoon pubs across England, Scotland, Wales and Northern Ireland. Wetherspoon founder and chairman Tim Martin said: “There will be a huge gain for business and consumers if the UK copies the free trade approach of countries such as Singapore, Switzerland, New Zealand, Australia, Canada and Israel, by slashing protectionist EU import taxes (tariffs) on leaving the EU in March next year. It is not often the government can enrich the electorate without losing tax income, however, this is a rare example. These invisible tariffs are charged on more than 12,000 non-EU products, including rice, oranges, coffee, wine and children’s clothes. The proceeds are collected by the UK taxman and sent to Brussels. Ending tariffs will reduce shop and pub prices, improve living standards and will help non-EU suppliers, currently discouraged by tariffs, quotas and the extensive paraphernalia of EU protectionism. If parliament votes to end tariffs and rejects the ‘Chequers Deal’, consumers and business will benefit additionally by avoiding a cost of £39bn, or £60m per UK constituency, in respect of the EU ‘divorce payment’ – for which there is no legal obligation. Parliament can also regain control of UK fishing waters, where 60% of the catch is currently taken by EU boats. Unfortunately, some individuals, businesses and business organisations have mistakenly, or misleadingly, repeated the myth that food prices will rise without a ‘deal’ with the EU. In fact, the only way prices can rise post Brexit is if parliament votes to impose tariffs. The EU will have no say in the matter, provided that the government does not sign away the UK’s rights in a ‘deal’ in the meantime.”

D&D London founders David Loewi and Des GunewardenaD&D London has reported like-for-like sales are up 4% in its current financial year but said England’s run to the Fifa World Cup semi finals cost the company £250,000 each time the team played. The company, which owns restaurants including Bluebird Chelsea and the recently opened 20 Stories in Manchester, reported strong trading over the summer, but admitted its upmarket dining rooms had remained empty during big matches as supporters flocked to pubs and bars. Chief executive Des Gunewardena (pictured on right with fellow co-founder David Loewi) told The Times: “The summer heat was positive overall for us, as we have a lot of restaurants with terraces, but every time England played, we lost a quarter of a million of revenue.” He said the upturn in sales over the summer had continued since, notably in its City eateries. Gunewardena said Coq d’Argent and Madison, in particular, had “shrugged off Brexit worries and are trading significantly ahead of last year”, with the former heading for a record year on the back of like-for-like sales growth of 17%. D&D London was launched in 2006 via a buyout of Conran Restaurants led by Gunewardena and in 2013 it secured backing from LDC, the private equity division of Lloyds Banking Group. Today it has 40 restaurants. As well as London restaurants, it has a presence in Manchester, Leeds, Paris, New York and Tokyo, plus the 80-room South Place Hotel in London. Gunewardena said trading this year had been “a different story” to last year, with like-for-like sales up 4% for the present financial year to date. In the year to 31 March 2018, D&D lifted turnover by 6% to £132.2m, but like-for-like sales excluding openings grew by only 1%. Underlying earnings last year fell 11% to £11.6m on the back of soaring business rates, labour and food and wine costs, while Gunewardena said earnings also had been hit by initial losses of new outlets, which had been “a bit slower to kick in”. He said the company continued to seek new sites, however, and had committed to a new rooftop restaurant in the City, at 120 Fenchurch Street, and in the Hudson Yards development in Manhattan. He said he was looking at potential sites in Shanghai and Beijing and had been “inundated with offers on sites in New York and on the west coast of America”. “After the Brexit referendum we took the view that we would continue to expand,” he said. “I still remain of view the UK will remain a good place to invest, but we’re also expanding overseas to make sure all our eggs are not in one basket.”

Cake Box, the specialist retailer of fresh cream cakes, has reported revenue for the six months ended 30 September 2018 is expected to be up 40% to £8.3m with profits “ahead of expectations”. The company, which floated on AIM in June, stated: “The group traded strongly during the period with average sales per store continuing to grow and a record number of new store openings. The group expects to report revenue for the period up circa 40% to circa £8.3m compared with the same period last year. Following the strong first half of the year, the board now expects profits for the full year to be ahead of current market expectations. A total of 15 franchise stores were added during the period, bringing the total number of stores to 102. Recent store openings included Bletchley, Northampton and Derby. The group will report its half-year results for the six months ended 30 September 2018 on 26 November 2018.” Chief executive Sukh Chamdal said: “We have delivered a strong trading performance for the period, during which we successfully completed our initial public offering in June. We continue to build momentum with a record number of new franchise store openings, and an increase in the average sales per store. We look forward to the second half of the financial year with confidence, with a strong pipeline of new franchise stores putting us on track to match the number of stores opened during the first half.”

Dominos pizzaPeel Hunt leisure analyst Douglas Jack has said he expects Domino’s Pizza to return £800m to £950m to shareholders over the next seven years. Issuing a ‘Buy’ note on the shares with a target price of 350p, Jack said: “Store split economics are key to the company’s prospects. So too are new and smaller franchisees, which, importantly, are very keen to expand. The largest franchisees operate within fixed territories, within which they have undertaken a significant number of store splits. To expand, they have bought out neighbouring franchisees (there were 112 franchisees in 2013; but only 67 as at August 2018), typically paying 65 times average weekly unit sales (£1.4m-plus per store), and then suffered short-term cannibalisation from store splits. Expansion opportunities are arguably greater in other territories, where expansion has been less rapid and where franchisees have fewer stores. Overall, franchisee incentives are being held, but with a greater bias to helping new/smaller franchisees. Franchisees have a significant economic incentive to support the brand based on the amount of wealth they have tied up in Domino’s and the fact their operational gearing is four times that of the company. UK/Republic of Ireland supply chain centre Ebit margins fell by 200 basis points in 2017 and 130 basis points in the first half of 2018 despite franchisee food cost inflation exceeding volume growth by 5% and 2%, respectively. This can be explained mostly by higher cheese costs (30% of cost of goods) and inefficiencies in logistics and distribution ahead of the Warrington supply chain centre opening in April. We now forecast £40m of share buybacks in 2019E and 2020E, taking net debt/Ebitda to 1.75 times. We estimate 1.75 to 2.5 times net debt/Ebitda in 2024E would enable £800m to £950m to be returned to shareholders over the next seven years, before possibly £100 to £150m of German disposal proceeds. Softer like-for-like sales in the second half should limit forecast upside until the final results. However, this is also a period when the company should make good progress on cost efficiency, cash flow and overseas profitability. Our ‘Buy’ stance reflects scope for cash, equivalent to more than 60% of the current market capitalisation, to be returned to shareholders over the next seven years.”

Fish and chip chain Harry Ramsden’s, owned by Boparan Restaurant Group, has reported a £4,971,684 loss for the 52-week period ended 31 December 2017, compared with a profit of £1,354,921 for its previous financial year (a 53-week period). The company generated total revenues of £14,866,991, compared with £16,323,453 the previous year. The company blamed the fall on tougher trading conditions and a reduction in store numbers. The underlying Ebitda loss was £293,633 compared with a loss of £1,173,366, according to accounts filed at Companies House. The company stated: “Following the strategy of opening new sites throughout the UK in late 2015 and into 2016, the business continues to review the most appropriate locations and formats for the trading estate. During the year the business made a number of decisions on a number of locations that were not viable in the longer term resulting in an impairment charge provision of £2,390,952 (1 January 2017: £1,547,794). Operating loss excluding impairment charges improved to £2,515,056 (1 January 2017: £3,065,877). The outlook for the continuing estate is on target to deliver on its planned budget in 2018. The company continues its positive franchise relationship with Welcome Break and now operates 19 sites across its network. Internationally, the business operates franchises in two countries and continues to see international growth as an opportunity.”

Association of Licensed Multiple Retailers chief executive Kate NichollsUKHospitality has said plans to shrink the size of dishes and cap calories will be “yet another cost burden” for operators. Public Health England has outlined new guidelines to tackle child obesity, which could force restaurants and pubs to reformulate popular recipes or reduce portion sizes to meet the new limits. UKHospitality chief executive Kate Nicholls said: “We are supportive of efforts to promote healthier eating habits and the sector is already taking decisive, proactive action to reformulate menus to reduce calories, increase transparency and offer healthier dishes for customers. Freedom of choice must remain key to the consumer experience and it is reasonable for people to treat themselves when dining out, while still controlling their calorific intake. As we stated earlier this year, the introduction of mandatory calorie labelling on menus is likely to have a damaging effect – resulting in prices going up for customers and investment in businesses going down; inevitably having a negative impact on the overall consumer experience. The new proposal to shrink the size of dishes and cap calories will be yet another burden for operators and a measure that will ultimately lead to additional costs for many hospitality businesses, as acknowledged by the Treasury. This new proposal arrives at a time when not only is the eating out dining sector experiencing turbulent times but our high streets are suffering. Hospitality businesses such as pubs and restaurants are saddled with excessive and increasing taxation and regulatory costs, which is why our sector needs targeted support in the Budget later this month.”

Sunny weather in September proved good news for Britain’s managed pubs, with collective like-for-like sales up 1.9% on the same month last year, the latest Coffer Peach Business Tracker has revealed. However, restaurant chains continued to experience depressed trading, with like-for-likes down 0.2% on the same period in 2017. Overall, the managed pub and restaurant sector saw a 1.1% uplift in like-for-like trading last month but that was due entirely to strong pub sales – especially from drink. “As ever, the good weather played a big role, and although restaurants as a whole failed to benefit, it provided an overall boost for the out-of-home market as the public were tempted out,” said Karl Chessell, director at CGA, the business insight consultancy that produces the Tracker, in partnership with Coffer Group and RSM. Regionally, London outperformed the rest of the country, with like-for-likes ahead 2.0% against 0.9% for outside the M25. “London pubs and bars also had the best of the trading, with like-for-likes up 3.0%. It’s also worth noting that within those national managed pub numbers food sales were flat, with drink sales up 3.0%,” Chessell added. “Although casual dining chains are collectively finding trading difficult, they are not in wholesale retreat. Despite some high-profile announcements of site closures, many are still opening in new locations, especially out of London. As the data for September shows, while same-store sales outside the capital were down 0.4% for the month, total sales were up 2.4%, fuelled by restaurants opened over the past 12 months. The market remains challenging but some operators – especially wet-led pubs – are trading strongly,” Mark Sheehan, managing director of Coffer Corporate Leisure said. Total sales growth across the whole pub and restaurant sector was 3.5%. Underlying like-for-like growth for the 49 companies in the Tracker cohort, which represents both large and small groups, was running at 0.6% for the 12 months to the end of September, virtually the same as at the end of August and July, showing the eating and drinking out market remains consistently flat.

Rising costs, intense competition and Brexit are creating significant challenges for operators in the sector – but consumer trends including premiumisation and healthier eating and drinking offer opportunities for growth. Those are among the key findings of the fourth edition of Future Shock, the exclusive series of market reports produced in collaboration between UKHospitality, CGA and partners. The Future Shock report has highlighted some of the big consumer trends operators will need to respond to in 2019, including the growing interest in healthier eating. CGA’s BrandTrack research has shown nearly two-thirds of eating and drinking out consumers try to lead a healthy lifestyle. CGA also estimated premiumisation in the on-trade will grow by £3bn a year. Meanwhile, the report also predicted the emergence of the omni-channel and “third space”, including pop-ups and festivals. The fourth edition of Future Shock also analysed the fast-growing delivery market and the rising importance of ethics and sustainability in the sector. It emphasised the value of understanding the habits, needs and motivations of different consumer groups and of providing consistently memorable experiences that stretched beyond food, drink and service. Elsewhere in the report, UKHospitality provides analysis of the future of labour in hospitality, following the creation of the Hospitality Workforce Commission 2030, and reviews developments in important industry issues including collective copyright licensing and primary authority legislation. Karl Chessell, business unit director, retail and food at CGA, said: “Our analysis in the latest edition of Future Shock makes it clear that trading isn’t easy at the moment. With like-for-like sales growth sluggish, key input costs rising and competition fiercer than ever, operators need to be at the top of their game to succeed. Several other trends, such as delivery and the rise of the third space, are adding to the challenges, while Brexit will bring fresh threats in 2019. But as the report also makes clear, there are plenty of opportunities too. Forward-looking operators who properly understand the habits, needs and motivations of different consumer groups and who deliver memorable experiences can still thrive. Responding well to the big trends we identify here – such as premiumisation, technology, healthier eating and a greater interest in ethics – will go a long way towards achieving that.” UKHospitality chief executive Kate Nicholls added: “Businesses are still facing a considerable amount of instability economically and politically as Brexit approaches. It is at times like these that concise, clear and authoritative advice and insights become more valuable than ever. The fourth edition of our Future Shock report provides hospitality with the best advice to ensure it is prepared to meet the challenges ahead and capitalise on trends at the cutting edge.”

CGI of the new JinLi restaurant opening at Central Cross, a 48,000 square foot mixed-use development at the eastern gateway to Chinatown LondonThe first two restaurants have signed to open at Central Cross, a 48,000 square foot mixed-use development at the eastern gateway to Chinatown London. Sichuanese restaurant JinLi (pictured), which won the best in England category at the Golden Chopsticks Awards, will open its second restaurant in the area after taking a 150-cover, 4,300 square foot unit. The venue will open in the winter offering modern Sichuan dishes with traditional core elements. Dishes will include sliced pork with sizzling rice crust, and JinLi fragrant rabbit. New dishes and recipes will be developed every six months. The interiors will feature fittings and tableware imported from China and a digitalised menu. JinLi owner Yi Fei said: “2018 has been a significant year for our brand’s expansion. This Chinatown London location will offer innovative and exclusive new dishes with the aim of playing a big role in redefining London’s Sichuanese culinary landscape.” Meanwhile, casual noodle and dumpling concept Modern Shanghai will open a 4,000 square foot restaurant featuring interiors inspired by Shanghai, including wooden panelling, grey marble tables and gold finishing. Chefs will prepare fresh dumplings and noodles at the front of the restaurant, including roast duck noodles and grilled Chinese tapas. Julia Wilkinson, head of group restaurant strategy at London Chinatown landlords Shaftesbury, said: “JinLi and Modern Shanghai are both creative new concepts from Chinatown operators that perfectly reflect our strategy to introduce new flavours to Chinatown London.”

Chipotle UK has reported losses increased to almost £6m as turnover fell at its six-strong operation, with trading “adversely impacted” by terrorism and food-borne illness incidents associated with its sister restaurants in the US. The company saw turnover fall 7.2% to £7,203,437 for the year ending 31 December 2017, compared with £7,782,351 the previous year. Pre-tax losses increased to £5,875,069 compared with a loss of £4,313,288, according to accounts filed at Companies House. In their report accompanying the accounts, the directors stated: “Comparable restaurant sales for the year were minus 5.4%, compared with minus 6.8% in 2016. Our sales and profitability were adversely impacted throughout 2017 because of many terrorist activities that occurred throughout Europe as well as a foodborne illness incident associated with a Chipotle restaurant in the US. Comparable restaurant sales increases were driven by the menu price increase taken in all our restaurants. Our cost of sales for the full year of 2017 was £8.4m (2016: £9.6m), primarily consisting of restaurant-level expenses. Refining our long-term supply strategy for our European locations remains an important objective. We also continue to focus on labour costs as we strengthen our teams and become more efficient in serving our customers. Gross loss for the full year of 2017 was £1.2m (2016: £1.8m), a decrease in loss of 33.7% from the prior year. Administrative expenses for the full-year 2017 were £5.3m (2016: £2.8m), an increase of 103%, primarily resulting from a non-cash impairment charge to write down a substantial portion of the associated long-lived asset value for several underperforming locations. We will continue to develop opportunistically as our brand gains traction and we create a deep pipeline of future restaurant leaders. We have partnered with Deliveroo and started delivery in our UK restaurants in January.”

Finsbury Park will be home to a new Premier Inn and Bar + Block restaurantWhitbread has secured planning permission for a Premier Inn and steak restaurant concept Bar + Block in Finsbury Park, north London. Adding to its growing portfolio in Zone 2, Whitbread will create an eight-storey, 192-bedroom hotel in Seven Sisters Road with the restaurant operating on the ground floor. Work on the site is expected to start before the end of the year, with a targeted opening date of early 2020. The hotel and restaurant will create more than 80 jobs. Louise Woodruff, acquisition manager (outer London) for Whitbread, said: “Bringing Premier Inn to Finsbury Park is very exciting for us and we are delighted with Islington council’s positive decision.”

Antic, the Downing-backed London pub operator led by Antony Thomas, has put 11 pubs on the market. Antic and Downing have instructed agent Fleurets to market 11 of the 48 London sites the pub company operates. Fleurets said the limited life funding structure in the 11 sites had matured so the pubs were being offered for sale with either vacant possession or on a leased/managed contract with Antic remaining in situ. The remaining Antic sites are unaffected by the marketing process and the company continues to grow with a strong pipeline in place, it added. Andy Frisby, of Fleurets, said: “This is a really exciting opportunity for buyers to acquire commercial property investments underpinned by a proven industry operator or buy the sites with vacant possession and add value through development and trade at the units. There are some really popular locations in this portfolio, including Elephant and Castle, Dalston and Streatham, and we expect demand for these assets to be strong.” Last month, Antic opened the latest pub in its estate, Arkstar, in Holloway Road, north London, close to Arsenal’s Emirates Stadium. The pub is housed in a railway arch, with a restaurant to follow in an adjacent unit in early 2019. Arkstar takes its name from a combination of the words “arch” and Telstar – the hit sixties song written by record producer Joe Meek at a site close to the pub.

Pierre Koffmann and Marco Pierre White outside the Abbey Hotel, BathBlack and White Hospitality, which owns the rights to six restaurant brands belonging to chef Marco Pierre White, has launched a seventh by opening a debut site under its new joint venture with fellow Michelin-starred chef Pierre Koffmann. The chefs, who have six Michelin stars between them, have worked with The Abbey Hotel in Bath to create Koffmann & Mr White’s. The concept is a brasserie-style eaterie offering a mix of English and French classics from the chefs’ repertoire. Black and White Hospitality plans to roll out Koffmann & Mr White’s during the next two years following a year’s exclusivity for The Abbey Hotel. Koffmann was awarded three Michelin stars at his La Tante Claire restaurant in London, where White trained before moving on to attain his own three stars at Harvey’s and The Restaurant Marco Pierre White at the Hyde Park Hotel. Black and White Hospitality chief executive Nick Taplin said: “Nothing like this has happened before and it’s exciting to see the restaurant open. The energy between these great friends is amazing and they are bursting with ideas, while the combined knowledge of these culinary giants is phenomenal. As we approach our 50th restaurant, the opening of Koffmann & Mr White’s heralds another amazing chapter in the Black and White story.” Koffmann & Mr White’s is Black and White Hospitality’s seventh brand alongside Steakhouse Bar & Grill, New York Italian, Wheeler’s of St James, Mr White’s English Chophouse, Bardolino Pizzeria, Bellini & Espresso Bar, and Marconi Coffee and Juice bar.

The London hotel market has seen its lowest average daily rate and revpar levels for a September in four years, according to the latest data from STR. Preliminary results for the month showed average daily rate fell 3.1% to £158.93, while revpar was down 3.2% to £138.04. Both levels were the lowest for a September in London since 2014. Occupancy was down 0.1% to 86.9%, while supply was up 1.9% and demand rose 1.7%. STR analysts noted that although overall performance was negative, London Fashion Week (13-18 September) and the Professional Lighting and Sound Association trade show (16-18 September) boosted performance levels on the days of those events.

Porta founders Joe and Ben WrightNorth west-based brothers Joe and Ben Wright will open a third site for their tapas bar brand Porta, in Salford in November, which will be their fourth venue in total. The Wrights launched the concept in Chester as a sister site for their Altrincham bistro Joseph Benjamin, opening a second Porta, in Altrincham, in 2016. The 60-cover Salford venue will open in Chapel Street at a former bank branch offering the same formula of “laid-back tapas and drinks”. The main dining area will be on the ground floor, with a bar upstairs. The menu will mirror that of Chester and Altrincham, where dishes and bar snacks include salted Catalan almonds, patatas bravas, and fried Andalucian-style squid with aioli. Behind the bar, the venue will offer a range of specially selected Spanish wine, cava, beer and sherry. Joe Wright said: “Opening our third Porta site in Salford will be a dream come true for us. Our head chef, Jose Garzón, is extremely talented and has a brilliant instinct for flavour. We are eager to maintain the vibe of informal and fun, staying true to the ethos of a relaxed, independent neighbourhood restaurant.”

Artisan coffee chain Soho Coffee Co has launched a site in Bristol the company hopes will appeal to students. The company has opened the venue in Queen’s Road in the Clifton Triangle area of the city. Clifton Triangle has a large student population and the new outlet features a “graffiti wall” for them to use. A spokeswoman said: “We want the students to make this their own. They can be far from home and feeling lonely and we have designed the new store with a ‘student Soho social’ in mind and a sharing ethos.” The outlet also offers the brand’s extended, customised hot food range that was first introduced at its site in Bedford Street, Covent Garden, less than two months ago. The Bristol site also features Soho Coffee Co’s new autumn menu that includes The Hog Roast, which is accompanied by house apple sauce, sage-and-onion stuffing and crackling. Sticky barbecue chicken with homemade coleslaw is also part of the new hot sandwich range. Vegan options include a hot pea and mint falafel sandwich served with pickled red cabbage and crowned by a coconut yogurt and mint dressing.

Pizza Hut Delivery's new concept store in LutonPizza Hut, owned by Yum! Brands, has appointed Vipul Chawla as president of its international division. Chawla will replace Milind Pant, who had held the role for three years and leaves in November to “pursue other opportunities outside the company”. Chawla, currently managing director of Pizza Hut Asia-Pacific, will start on Monday, 3 December and will be responsible for driving Pizza Hut’s strategy and performance outside the US. He will report to Yum! Brands chief executive Greg Creed. General managers of Pizza Hut restaurants outside the US will report to Chawla, who joined Yum! Brands in 2011 after spending 20 years with Unilever. He previously served as general manager of Pizza Hut Asia and chief marketing officer of KFC Asia. Creed said: “Vipul Chawla is an extraordinarily talented leader and highly respected global marketer, with a proven track record of growing Pizza Hut across the Asia-Pacific region with our franchise partners. He’s the ideal person to take Pizza Hut International to the next level.” Pizza Hut’s international division has reported a 2% drop in like-for-like sales for the past two quarters.

The Cheese Bar has hit the £200,000 target on crowdfunding platform Crowdcube on the final day of its campaign. Mathew Carver, who traded at music festivals as The Cheese Truck, opened the first Cheese Bar in Camden Market in March 2017 after raising £126,000 on Crowdcube. He returned to the platform in a bid to open a site in Covent Garden and offered 6.78% equity in return for the investment. A total of 403 investors pledged £204,000 for the project. The ground-floor Covent Garden space will be lined with display fridges showcasing maturing cheese. The varieties of cheese will be British only, while small plates will include smoked mozzarella sticks with chilli jam alongside larger dishes such as blue cheese raclette with salt beef and crispy leeks. In a nod to The Cheese Truck, the restaurant will also offer cheese toasties. The candlelit basement wine bar will offer cheese boards and charcuterie alongside a 70-bottle wine list to complement the cheese.

Thai Leisure Group has launched Thaikhun Street Bar at Liverpool ONEThai Leisure Group, which operates restaurant brands Thaikhun and Chaophraya, has launched its Thaikhun Street Bar concept at Liverpool ONE. The 3,000 square foot bar overlooks Chavasse Park with decor paying homage to the company’s roots including traditional bric-a-brac, a tuk-tuk and artefacts imported from Thailand. The concept serves cocktails using Thai spirits, Singha beer on draught, frozen alcoholic cocktails, and a non-alcoholic menu including ice-cream smoothies. The site also offers traditional Thai bar snacks and bowls. Thai Leisure Group founder Kim Kaewkraikhot said: “As the first project of its kind, the new bar concept is very exciting for us all. Offering unique Thai experiences is something we’re hugely passionate about and, with this fantastic offer, I have no doubt it will succeed.”

North London-based Redemption Brewing Company has closed its campaign on crowdfunding platform Crowdcube after raising more than £400,000 to support growth plans. The company, founded in 2010 by Andy Moffat and Sam Rigby, initially looked to raise £300,000 and was offering 13.64% equity in return for investment. It has now closed the campaign, with 591 investors pledging £406,030. The pitch stated: “In 2017 our sales have organically grown to more than £500,000 (net profit minus £48,919). We have built Redemption with our own blood, sweat and tears, our small but tight dedicated team, and the enthusiasm of our growing customer base. Our portfolio has expanded to seven core beers, which we complement with seasonal beers and collaborations with our brewing friends. Now we’re settled in our new, bigger, more efficient brewery we have the capacity and ambition to brew more than two million pints a year. We want to grow our brand and build sales locally, regionally, nationally and internationally by building our team and bolstering our sales and marketing function. We plan to invest in tanks to launch a new keg product and can format. We also want to improve our taproom with the aim of making it a go-to venue for north London’s discerning beer drinkers.”

Mamma Mia! The Party is coming to London next yearAbba star Björn Ulvaeus has appointed food experience brand and events caterer Rhubarb as caterers for his immersive theatrical dining experience Mamma Mia! The Party in London. Launching in a bespoke venue within The O2 London on 29 August 2019, the contract will see Rhubarb cater for more than 500 guests per show across eight performances each week. Diners will sit in a recreation of a taverna on the island of Skopelos, where most of the first film was shot, and tuck into Greek cuisine while a live immersive show plays out in front of them full of Abba songs. Rhubarb has worked with Ulvaeus and producer Ingrid Sutej to devise a Greek menu that will reflect the show’s guest experience. The menu will offer a three-course meal featuring handmade mezze dips; traditional Greek salad; charred octopus and orange cake. Rhubarb chief executive PB Jacobse said: “We are elated to be partnering with Mamma Mia! The Party for this extraordinary immersive venture that combines music, romance and dancing with gourmet food, reflecting the show’s Greek roots. It is an honour to be working with one of the world’s biggest music legends and his production team.”

Yorkshire-based craft brew company Play Brew has closed its campaign on crowdfunding platform Crowdcube after raising almost £160,000. The company, founded by Phil Layton, was offering 20.5% equity in return for the investment. In total, 292 investors pledged £159,510. Founded last year with four core beers, Play Brew has been using contract brewing until now to “help it gain traction”. The pitch states: “To date, we have produced about 5,500 cans and our beers have been sold in 33 outlets. We want to be the first to open a brewery and taproom in our local area, providing our community with a place to drink and socialise while also providing outlets in the vicinity with fresh local craft beers for retail. Play Brew recognises securing the right location is the key to success. Being the only brewery within a 19.5-mile radius, connecting and engaging the local community through a taproom will be instrumental to the business growth and profit. On the back of our soft launch, we have a number of outlets that are keen to become full-time stockists. Having our own brewery and taproom will not only allow us to grow our sales, it will also give us the opportunity to create new flavours to add to our range.”

Wedge Issue Pizza + BeerPizzas and pies in restaurants and pubs are set to shrink under new targets to tackle child obesity. Health officials want chefs to limit their pies to 695 calories and have stipulated pizzas should not contain more than 928 calories. It is thought restaurants and pubs will have to reformulate popular recipes or reduce portion sizes to meet the new limits. The guidelines are to be unveiled by Public Health England (PHE) as part of a package of measures to reduce childhood obesity and promote healthy eating. A consultation this summer recommended mandatory calorie counts on all menus, including takeaways. The Department of Health is understood to be sticking to its proposals despite resistance from some ministers over the potential cost to businesses. Liz Truss, the chief secretary to the Treasury, said she was concerned the proposals would be “burdensome” to small companies and “could result in job losses and higher food prices”. Ministers want to cut calories in ready meals, pizzas and savoury snacks by 20% by 2024. PHE chiefs met food industry leaders this week to set out the proposals on how to meet calorie reduction targets. PHE chief executive Duncan Selbie said: “Excess calories is the next big challenge for the food industry to improve the food we all consume.” Alison Tedstone, the body’s chief nutritionist, said: “The simple truth is, on average we need to eat less. Children and adults routinely eat too many calories. These are early days in the calorie reduction programme but the food industry has a responsibility to act.” Action against childhood obesity has concentrated on reducing sugar in diets, targeting cereals and soft drinks. In September, Tedstone criticised the practice of trying to persuade customers to buy high-calorie foods such as cakes and pastries in coffee shops. The government is holding the threat of legislation over the industry should it fail to fall in line voluntarily. Many campaigners believe it will be necessary. A PHE spokesman said the pie and pizza plans were at an early stage, and targets could change before the publication of the guidance next spring. Figures released today (Friday, 12 October) revealed severe obesity among England’s ten and 11-year-olds is at record levels, affecting more than 24,000 children, while the number in Year 6 deemed severely obese has gone up 8% in a year. Government recommendations are adult women should consume 2,000 calories a day and men 2,500, although PHE suggests both aim for only 1,800 over three main meals to account for the calories in snacks and drinks. Children’s requirements vary by age. A boy of seven should consume about 1,650 calories and a girl 1,500.

CostaNumis leisure analyst Tim Barrett has said the market has yet to fully appreciate the value in Whitbread post-Costa. Issuing an ‘Add’ note on the shares with a target price of 5,400p following the decision by Whitbread’s shareholders to approve Costa’s £3.9bn sale to Coca-Cola, Barrett said: “We believe the market has yet to fully appreciate the fundamental change in risk profile post-Costa. Premier Inn’s customer base is more than 50% business users with a wide distribution across the UK. This is in direct contrast to ‘Old Whitbread’ eg Costa where 60% of the estate was still high street located. Furthermore, Premier Inn has grown Ebitda by a five-year compound annual growth rate of 10%, through self-funded investment. This pure-play, market-leading hotel business with strong stable returns and a five-year pipeline of growth is a step change from the consumer bellwether of old. The high and rising Ebitdar margin sets Premier Inn apart from much of the sector where minimum wage increases and business rates have eroded profits. Premier Inn’s margin has risen every year since FY10 and by a cumulative five percentage points since then (to 40.2%). We believe this reflects a culture of continuous improvements and sharp focus on returns. Reassuringly, as a group Whitbread delivered well on its original cost savings target (£150m), which it increased by £100m and of which £145m now remains (unadjusted for Costa). We are confident it can offset Premier Inn’s £50m of cost inflation this year, which, combined with room openings, modest revpar growth and a smaller head office, should support double digit earnings growth. Also notable is Premier Inn’s consistently high return on capital expenditure, demonstrating strong execution on estate expansion as well as underlying defensiveness of the business. Return on capital expenditure (with capitalised leases) is virtually unchanged from 2010 at 11.4% pre-tax, a healthy premium to weighted average cost of capital and with a peak-trough range of just 90 basis points, making it considerably more defensive than the wider owner-operator hotel universe and the market’s perception of a typical hotel cycle. In this note we run sensitivity analysis around three scenarios for distribution of Costa proceeds (from £2.7bn to £3.8bn), revpar growth (minus 2% to +3%) and downsizing of central costs post-disposal (from flat to minus 50%). That suggests a blue-sky earnings per share of 407p and implies a best case price-to-earnings ratio of 11.3 times. Even on a base case EV/Ebitda of 8.9 times and price-to-earnings ratio of 14.0 times the company looks undervalued relative to the visibility of returns, pipeline of growth and asset backing. We recently published a detailed analysis of Premier Inn’s real estate backing, which we believe is critical to unlocking value. A total of 60% of the estate is freehold backed, which at a 5% yield and five times operating company value supports our 5,400p target price.”

Koh Thai founder Andy LennoxAndy Lennox, who founded the Koh brand and owns Lion Consultancy, is to launch an all-day restaurant venture, Propel has learned. The concept, which will be unveiled next week, will be a new “food frontier” that offers a “distinct style” of cooking. The first venue will open next month in Ashley Cross, Dorset, with further sites currently under negotiation in the county. Lennox founded the Koh brand, which began in the Bournemouth area and now has 13 restaurants across the south of England, almost a decade ago and has decided it is the perfect time to introduce his next concept to the market. Lennox told Propel: “Ten years ago we opened Koh in a recession with a bold, innovative concept and were able to expand quickly and profitably because we tapped into customers’ demand for experiences and authenticity. In a flat market the same is true today. Landlords are looking for the next big concept and are willing to offer competitive incentives to secure good tenants. It’s all to play for.” He added: “I have the keys to the first premises, we have boots on the ground and I’m looking forward to seeing my latest vision take shape. I have secured a great first site – the perfect blank canvas to breathe life into my new concept. I’ve chosen Dorset to launch the concept as it’s my home and I’m familiar with its vibrant foodie market. I have all my family here and think it’s appropriate for the concept to be born where I first began ten years ago. I have great confidence in the new concept and the heights I can take it to – this new foodie revolution is set to open minds and tantalise taste buds with a whole new dining frontier. It will offer a unique blend of flavours brought together by trading links over the centuries. I am confident Dorset will love the seasonal, fresh produce and its hidden depths as much as I do. Not only do I aim to transport my customers to this new foodie frontier, I’m also looking forward to growing the brand from its small roots into different areas of the hospitality trade. We will be open for breakfast, lunch and dinner, with three very defined menus and atmospheres.”

Stonegate Pub Company's Ian Payne (right) picks up the chairman's award at this year’s British Beer & Pub Association (BBPA) annual awards from BBPA chairman Simon EmenySt Austell Brewery, Joseph Holt, SA Brain, Molson Coors and Stonegate Pub Company chairman Ian Payne scooped the honours at this year’s British Beer & Pub Association (BBPA) annual awards held in London. Cornwall-based St Austell Brewery won the pub champion award for investing in communities, including the provision of meeting spaces and strong links to schools and colleges. North west brewer Joseph Holt and Wales-based SA Brain were joint winners of the heart of the community award for their commitment to charity. Molson Coors received the beer champion award for its training scheme, while Payne (pictured on right with BBPA chairman Simon Emeny) won the chairman’s award. BBPA chief executive Brigid Simmonds said: “The awards serve to highlight the continued achievements of our industry and rewards the commitment to our sector and local communities. I have known Ian Payne for the past 25 years – through Rank, Stakis and back to his much-loved pub trade. He thoroughly deserves the chairman’s award for the huge contribution he has made to the leisure sector. Visiting every one of his 333 pubs in 2011 is just one example of his dedication.”

Birmingham-based cider-maker Aston Manor has paid tribute to its founder Sir Doug Ellis who has died at the age of 94. Sir Doug, who set up Aston Manor Cider in the 1980s, was still the owner until its takeover by French food and agricultural group Agrial in August. His grandson James remains with the company as its chief financial officer. A statement on Aston Manor Cider’s website said: “We are deeply saddened that Sir Doug Ellis has passed away. Our thoughts and condolences are with his family and friends today. He will be remembered fondly for his passion and commitment, not only at Aston Manor Cider, but throughout the local community and across the country. As a sprightly 59-year-old in 1983, Doug invested in a newly formed and struggling regional brewery. It was with great pride that he oversaw the company grow from such small beginnings to one of the world’s largest independent cider makers.”

One of the bedrooms at The Arrow Mill, Brunning & Price's first pub with roomsBrunning & Price, the gastro-pub brand owned by The Restaurant Group, paid a consideration of £900,000 to acquire Ribble Valley Inns from Northcote Leisure Group earlier this year, newly filed accounts have shown. The figure paid for the four pubs in May was undisclosed but accounts for Brunning & Price for the year ending 31 December 2017, filed at Companies House, revealed the amount. They also showed turnover increased to £72,540,000 compared with £64,323,000 the previous year, while pre-tax profit was up to £10,085,000 compared with £5,375,000 the previous year. During the period the company opened three pubs. In their report accompanying the accounts, the directors stated: “Our business is well positioned in the market with a compelling, differentiated food-led offer that consistently outperforms the pub restaurant sector. Strong operational execution, along with locally sourced produce, has attracted a loyal and increasing customer base that rates the offering highly. The business delivers consistently good and growing returns, with recent openings consistently delivering Ebitda returns in excess of 20% (on an assumed leasehold cost base). Our estate is largely freehold asset backed with a book value in excess of £80m and requires, relative to fast-changing casual dining formats, relatively modest levels of ongoing maintenance capital spend. We see opportunities to increase like-for-like sales through optimising our menu pricing architecture and developing better offerings for previously considered non-core occasions such as breakfast and afternoon tea. We will continue to look for ways we can maximise the use of technology, building on the success we’ve had in driving bookings. We are finding new ways to maximise available spaces in our sites by creating private dining areas and making our first foray into accommodation.” Its debut pub with rooms – The Arrow Mill in Alcester in Warwickshire (pictured) – opened last month while it has secured a second – in Goring, West Sussex. The group currently operates 67 sites across the UK. In August, Brunning & Price acquired 11-strong London gastro-pub operator Food & Fuel for £14.91m. The Restaurant Group bought Brunning & Price for £32m in 2007.

Former ETM Group operations director James Lyon-Shaw has teamed up with ex-Ivy head chef Jamie Dobbin to launch a countryside venture. Their newly formed Brucan Pub Company has taken over The Greene Oak in Oakley Green, near Windsor, from Greene King. The pub now offers a daily changing menu using rarebreed meat and day-boat fish often shunned by other venues. Lyon-Shaw and Dobbin said they would only cook British food at The Greene Oak with an emphasis on “regionality”, reports Harden’s. Dishes include roast white onion soup with croquettes, pressed wild rabbit and mallard terrine with runner bean chutney, and cod tongue and cheek on toast with garlic butter. Brucan Pub Company already brews its own IPA while there are also plans to create a kitchen garden.

People & Training ConferenceThe People and Training Conference, organised by the British Institute of Innkeeping (BII) in association with Propel, is open for bookings. The event, which will showcase outstanding people culture among companies in the sector takes place at Bafta Piccadilly on Tuesday, 20 November. Speakers will feature BII chairman Anthony Pender; Susan Martindale, human resources director of Mitchells & Butlers; Charley O’Toole, head of HR at Bill’s; Edward Barlow, managing director of 16 Hospitality; Kenny Blair, managing director of Buzzworks Holdings; Jamie Campbell, chief commercial officer of online training and staff engagement business CPL Online, which is now part of CGA; Rob Liddiard, founder of hospitality chat app Yapster; Joe Cripps, managing director and founder of Trail; Colonel Mike Tanner, commandant of the Royal Marines Commando Training Centre; and Linda Moir, who created the customer services strategy at the London Olympics and was director of customer services at Virgin Atlantic. Propel managing director Paul Charity will also talk to JD Wetherspoon founder Tim Martin about his “people philosophy”, touching on rewards, longevity, inclusiveness, training and applying his time to the front end of retail. 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

The Restaurant Marketer & Innovator Awards has been launched. The awards, in their second year, recognise outstanding marketing and innovation in the sector. Finalists will be invited to an awards ceremony, which will be held at Cafe de Paris in London on Thursday, 17 January, which is 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 last year and had 850 people, coming from across Europe, attend over the various segments. The awards recognise the very best within the spheres of foodservice marketing and innovation.” Awards co-founder James Hacon (pictured) added: “We’re back after a stellar inaugural awards in 2018 that attracted more than 90 entries. We set out creating the awards to recognise the growing importance of marketing, innovation and strategy professions within the restaurant and foodservice sector. We saw a superb calibre last year and have amazing momentum with our events throughout the year. We’re expecting an even more impressive list of entrants this year.” Entries are now open. The closing date is 11.59pm on Monday, 5 November. Entry information and criteria can be found here.

Propel and Think Hospitality are launching the Immersive Experiences Conference, designed to bring together the community of operators, landlords and investors in the UK’s emerging immersive experiences sector. The half-day event takes place on Friday, 9 November at One Moorgate Place in London and is open for bookings. James Hacon, of Think Hospitality, will provide an overview of global innovation and trends in creating immersive experiences. Virgin Experience Days will outline its overview of the immersive experience sector, sharing key trends and potential growth areas. Matt Greco-Smith (pictured), co-founder of Swingers, will talk about the company’s progress opening two crazy golf venues in London, its food and beverage model and plans to open in New York. Frankie Edwards, head of the Jamie Oliver Cook School, will share how it has maximised sales from a large site through the addition of a hands-on cooking experience, effectively representing one of the UK’s most successful celebrity chefs. Jozef Youssef, founder and chef at Kitchen Theory, will discuss the principles of experience design in gastronomy based on joint research into the field with the University of Oxford. Tiffany Ng, co-founder and chief executive of RSVP, founder of Silver.Spoon, and co-founder and partner of Vinatic, will talk about the global pop-up and underground dining scene, and share her learnings of driving awareness and commercial returns from her experience running an online booking platform for the sector and a number of branded experiences in Copenhagen. Toby Harris, chief executive of Social Entertainment Venues, will introduce its concepts, share how it has differentiated from key competitors and where it sees the growth opportunities for its brands. Propel managing director Paul Charity said: “With consumers now demanding truly memorable experiences, the immersive market has become a key battleground for operators in an ever-challenging environment. This conference will provide valuable insight into making the most of that opportunity.” Tickets are £345 plus VAT for operators, £445 plus VAT for suppliers, and £295 plus VAT for Propel Premium subscribers. To book a place, email or call 01444 817691.

Propel Multi ClubA new speaker has been added to the schedule for the Propel Multi-Club conference on Thursday 1 November. Daniel Davies, founder of CPL Training and chairman of the Institute of Licensing, will outline his plans to breathe new life into his local coastal community with his latest venture Rock Point Leisure. Multi-site operators of pubs, restaurants and foodservice outlets can book up to two free places by emailing Anne Steele at The other speakers are James Nye, managing director of award-winning, nine-strong Anglian Country Inns; Matt Snell, managing director of 19-strong Gusto; Good Life Eatery founder Yasmine Larizadeh; John Upton, former managing director of Leon, member of the McDonald’s UK leadership team and now board member of Motherclucker and Naked Deli; Mark Jones, chief executive of Carluccio’s; Joe Grossman, founder of 12-strong Patty & Bun; David Singleton, area vice-president, franchise operations and development EMEA/south Asia, Hard Rock International; Christie & Co managing director of pubs and restaurants Neil Morgan; Zonal marketing director Clive Consterdine; Andrew Ball, of sector accountancy specialist haysmacintyre; and Martin Dinkele, deputy managing director of Morar HPI.

The Icon award recognising outstanding contribution to the sector was given to Tokyo Industries managing director Aaron Mellor, at Dusk 'til Dawn 2018

Dusk ’til Dawn

8th October 2018

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Propel Quarterly Autumn 2018

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