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Tue 1st Oct 2013 - Enterprise, M&B, Novus, Leon, Spirit |
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Story of the Day:Jamie Rollo – Enterprise Inns is now one of our five top share tips: Morgan Stanley leisure analyst Jamie Rollo, who was bearish on Enterprise Inns' prospects for a sustained period, has named the company as one of his five top share tips. The other four are not pub or restaurant companies. Rollo said: “We are upgrading our price target from 140p to 200p, as we now incorporate an element of its book value into our valuation. The UK property sector is seeing a strong performance, and Enterprise’s asset value seems relatively robust to us, suggesting its 50% net asset value discount is too conservative. Leased and tenanted pub companies are also slowly seeing their like-for-likes move back into positive territory, with encouraging recent comments from both Enterprise and Punch. Enterprise has the benefit of weak H1 comparatives, given the collapse of wholesaler WaverleyTBS and poor weather, and the company should benefit from the improving UK economy, RPI-linkage of most of its rental income, and its greater focus on helping failing pubs. We think there is a good chance that like-for-likes are positive in H1 2014, which should be taken well, and we see the 19 November final results as a key catalyst. With 1% on like-for-like income 3% to EPS and 7% to FCF, returning to positive like-for-likes is critical, in our view. At the same time, we think the convertible bond eliminates any residual risk over the bank debt and may even allow modest share buybacks.”
Industry News:Propel to undertake technology survey today: Propel Info has partnered with the online purchasing specialist iTradeNetwork to create a survey to understand how technology is used within the UK hospitality sector. Propel managing director Paul Charity said: “A short five-key-question survey, and an opportunity to win an iPad mini, will be sent out later today and we would be grateful for readers’ participation.”
Restaurant consultant says Michelin guide may have had its day: Restaurant consultant Adam Hyman has argued that the Michelin Guide may have outlived it usefulness. In his weekly e-mail update, he wrote: “The newest Michelin guide came out last week, leading to the usual cries of outrage or apathy at the tyre manufacturer’s esoteric ratings. Most people I speak to feel the red books’ appeal is diminishing: they no longer want fiddly food served in silent rooms. I find the Bib Gourmands far more enticing than one-star places, and one-stars more enjoyable than twos. On the same day the guide was published, the Soho Literary Festival hosted a debate on whether or not 'foodies' have 'taken the fun out of restaurants'. The panel, which included Tom Parker Bowles and Russell Norman, was almost unanimous in saying they had, however ill-defined the word 'foodie' is. I would argue that Michelin is more to blame for stripping the fun from restaurants. By funding the recent boom in eating-out and encouraging restaurateurs to be bolder, 'foodies' are restoring it.”
Shake Shack chief executive – brands need a slow start: Shake Shack chief executive Randy Garutti has argued that brands should avoid excessive ambition at the start of their development. He said: "To grow a brand you can't seek to go out there at the beginning and try to grow this monumental thing. All we wanted to do was sell a few hot dogs to support an art project. And we did it the best way we knew how. And because of that it grew organically."
‘Dirty’ restaurant has fines overturned at Crown Court: A restaurant in Teignmouth, Devon, has had a £9,000 fine overturned for dirty premises after impressing a Crown Court judge with its efforts to clean up. Earlier this year, the restaurant was branded "filthy" by Teignbridge District Council and owner Maria Webb was ordered to pay more than £10,000 in fines and costs. But a judge at Exeter Crown Court has overturned the fines because Webb has made so many improvements. She said: "The judge recognised the major improvements since I have taken a more hands-on approach with the restaurant.”
Company News:Geof Collyer – M&B needs to deliver on its business re-engineering: Deutsche Bank analyst Geof Collyer has argued that the time has come for Mitchells & Butlers to show results on its business culture changes. He said: “M&B needs to deliver on its business re-engineering. It has more exposure to the resilient London region than some of its peers (Greene King, Spirit), but the real drag on overall performance remains with the Crown Carveries and Oak Tree estates (circa 12% of group managed pubs). There is now a lot riding on the chief executive’s commitment at the final results in November to some harder targets now that he has been in situ for over a year. Management strategy is not to chase aggressive like-for-likes growth through pricing and marketing (helpful for medium-term sustainability of profits), could mean FY’14E like-for-likes growth may continue to lag the peer group. This situation will place more demands on the rollout programme (30 more pubs in 2014, rising to circa 50 more in 2015) to drive incremental profits growth. M&B has ended its 2013 financial year with like-for-likes performance among the lowest in the sector.”
Le Bistrot Pierre secures new finance: The ten-strong restaurant group Le Bistrot Pierre, headed by Robert Beacham and John Whitehead, has secured circa £4m of new funding from NatWest to allow the company to double in size. Turnover in the year to 31 December rose 10% to £11m and pre-tax profit grew from £425,500 to £889,000.
Town with just one ‘very busy pub’ to encourage Wetherspoon to open: Community planners in the garrison town of Tidworth, Wiltshire, which has 10,000 residents and just one ‘very busy pub’, is to approach JD Wetherspoon to request it opens a pub in the town. Members of the Tidworth Community Area Partnership have agreed to approach the town council to join them in inviting the company to build a venue on the site of the former Naafi Spar at the top of Station Road, Tidworth’s main shopping street. Many of Tidworth’s residents are young soldiers and their families.
EPOS challenge meant Tax Parity Day extended at Steamin’ Billy: An EPOS problem meant that Tax Parity Day, scheduled for Wednesday 25 September, went on a little longer than expected at the seven-strong pub operator Steamin’ Billy Brewing Company. Company founder William Allingham told Propel: “Our EPOS provider set our Tax Parity Day prices and we couldn’t change them back in the site hierarchy at the touch of a button. We needed to adjust all 2000 lines we stock manually so the party went on over the weekend – we updated our best-selling lines at all units so it wasn’t too bad."
Novus human resources director steps down: Karen Davies has stepped down as human resources director at the London bar operator Novus after eight years with the company. Before joining Novus, Davies was retail HR director at the Spirit Group and served as personnel and training director at Scottish & Newcastle Retail. Her departure follows that of chief executive Steve Richard, chief operating officer Jason Thorndycraft and the head of acquisitions, Kevin Norman, this year.
Mark Hix to open City of London restaurant: The chef and restaurateur Mark Hix, the man behind restaurants including the Hix Oyster and Chop House in Farringdon, London, is to open a 5,000 square foot restaurant and bar in the City of London in November. The site on Devonshire Square will serve chicken and steak, with a Mark's Bar in the basement.
Poulet Rouge and Café Rouge in trademark dispute: Tragus, which owns Café Rouge, has moved to try to block trademark registration for Poulet Rouge, the chicken-focused restaurant opened by Cattlegrid’s Steve Novak in Balham, South London in August. Novak told Propel: “We have a good relationship with Tragus, sub-letting a site in Leeds. Tragus tried to invalidate my trademark. Round One on this has gone to us – no preliminary indication has been issued, which means the IPO office agrees with us. I understand that a big company like Tragus has to be seen to do something.”
Kent pub owner plans £1.2m project at fourth pub acquisition: Kent entrepreneur Julian Leefe-Griffiths plans to invest £1.2m into his fourth pub acquisition, the 16th-century Leicester Arms in Penshurst. He already owns the Tunbridge Wells Hotel on the Pantiles, the Black Pig in Grove Hill Road, Tunbridge Wells and the George and Dragon in Speldhurst. The £1.2 million project to revive the Leicester Arms started this week when he took ownership of the High Street pub from Enterprise Inns. Plans include a refurbishment of the pub’s 13 bedrooms. Leefe-Griffiths said: "When the pub went up for sale I had people ring me every two weeks at the George and Dragon asking me to come and buy the Leicester Arms. It will become a gastro-pub and the menu will feature roast meat cooked over smoking wood, as it did in the 1700s. The basic structure of the Grade II listed building is beautiful, but inside it has some 16th century electrics and more recent dry rot.” He hopes to open the refurbished pub in time for Christmas.
Autogrill Group extends partnership with Leon: Autogrill Group, through its subsidiary HMSHost, has extended its partnership with Leon Restaurants by securing a feature site at the new Heathrow Terminal 2. The new restaurant will be Leon’s largest location, with over 2,600 square feet and featuring 130 covers and is expected to open its doors next spring. It will be the second and largest airport opening for HMSHost and Leon Restaurants, and follows the successful openings of their restaurants in London’s newly renovated Kings Cross station and at Heathrow Terminal 3. The brand new restaurant will be situated in the post-security area of Terminal 2, catering to more than 20,000 travellers per day. The purpose-built restaurant will feature fabrics and materials that tell a story of aviation history through the use of reclaimed bricks from the old Heathrow Control Tower, which made way for the new Terminal 2. This latest opening will take Leon’s total estate to 14. Henry Dimbleby, Leon’s co-founder and chief executive, said: “When we started Leon we wanted to revolutionise fast food. We wanted to make it easy for everyone to eat good food. We are thrilled that Leon is the only fast-food restaurant in T2 and occupies such a prominent spot. It proves that it is possible not only to serve fast food that tastes good and does you good, but to do it at a price that is accessible to everyone.”
Spirits producer William Grant reports turnover up: Spirits producer William Grant & Sons has delivered a record turnover, topping £1bn for the second year in a row. Turnover of £1.06bn is up 1.4% on the previous year in total. Turnover on the company’s core brands increased by 7% year-on-year. Grant's delivered a group operating profit of £124.8m for 2012, down from £126.3m in 2011. It said: “Whilst the tough global economic conditions made 2012 a challenging year, with consumer confidence in Europe in particular remaining low, the company continued to strengthen its business by investing in core brands and global infrastructure for the long term, which explains the slight reduction in profits.
Luminar rebrands Tamworth nightclub after £100,000 investment: Nightclub company Luminar has re-opened its Tamworth nightclub, Trinity, as Kuda after a £100,000 investment. It has new dance floor, lighting effects and refurbished decor. The investment has created an additional 10 jobs to the 30 already employed at the club.
Best pub in South West London to undergo £250,000 investment: Punch Taverns’ The Foresters in Kingston-upon-Thames, which has just been named Best Pub in South West London for a second year running, is to undergo a £250,000 refurbishment. Licensee Thomas Furber has been running the Foresters since July 2005. He said: “We pride ourselves on creating high-end versions of classic modern British dishes. All of our food is locally sourced with the emphasis on freshness and quality. It’s wonderful to be rewarded for our efforts.” The pub is expected to reopen later this month.
Fat Cat Cafe in Hanley re-opens as New York-style speakeasy: The former Fat Cat Cafe in Hanley, Staffordshire has re-opened as a 1920s New York speakeasy called The Exchange. Mark Askew, one of the five former staff members who formed a consortium and signed a six-year lease for the building after Fat Cat went into administration, said the group has stayed true to the essence of the Fat Cat ethos. He said: "We know how important Fat Cats was to people here. There's no sense in hiding from the past of the bar when people loved it so much, including us. We have kept a few tributes to Fat Cats, particularly in the menu, and just given the bar a bit of a facelift. We had a truly excellent interior designer who put together a shabby chic look for the place that is very popular in Manchester.”
Miller & Carter launches new menu: Miller & Carter, the steak house brand that Mitchells & Butlers has identified as an area of growth, has launched a new menu. New dishes include a bourbon-glazed pork belly bites starter, and new main courses include a chilli and lemon roast Shropshire chicken and a maple-glazed lamb rump. The brand has introduced a choice of blue cheese or olive tapenade butter to eat with steak dishes. New desserts include a chocolate and raspberry pot and a sticky date and ginger pudding.
Spirit first ‘premium’ Chef & Brewer stuck in planning: Spirit’s first premium evolution of Chef & Brewer, called ‘New World’ internally, The Bear Inn in Berkswell, Coventry, is currently stuck in planning, according to a company source. The company has previously said: “We are currently developing a new premium food pub that will offer outstanding food, drink and service, in an independent and stylish pub environment. Located in affluent areas, our pubs will attract a discerning guest that has high expectations. The food offer will be fresh and seasonal, and will not only attract people for special occasions but also tempt in for an evening of great food and drink.”
Coronation Street actor buys fourth pub: Coronation Street actor Rupert Hill has bought his fourth pub – and is looking to buy more. Hill, who works with business partner Jonny Booth, is breathing new life into each of his acquisitions by restoring them to a traditional trading style, ridding them of TV screens and replacing them with a piano and quiz nights. He has also thrown his weight behind the Sunday Mirror’s Save Our Pubs campaign, which he hails as “brilliant”. Hill has acquired Gullivers in Manchester city centre, The Eagle Inn, Salford, The Castle in Manchester’s trendy Northern Quarter and The Parlour in Chorlton.
Champagne bar to open second site in Brixton: The champagne bar concept Champagne + Fromage is to open its second site in Brixton, South London on 15 October. The original is in Covent Garden, central London. Owner Stefano Frigerio said: “I love Brixton Village because it is a very exciting, special place in London, with traditional shops where you can try things from all over the world. From a business point of view, it’s a trendy, booming market with small restaurants like us that are trying to do new things.” As well as a bistro serving 40 covers, the premises will have a shop with fresh artisanal products from France.
Boost Juice Bars to open 13th site in Peterborough, plans six more openings: Boost Juice Bars will open in Queensgate shopping centre in Peterborough this Saturday (5 October) and has six other openings lined up. Boost Juice Bars was launched in the UK in 2007 by Richard and Dawn O’Sullivan after their daughter saw it take Australia by storm. The couple, who sold their Millies Cookies chain in 2003, have opened Boost Juice stores across the UK, including Manchester, Oxford and Brighton, and plan to spread the Boost name further with seven new store openings planned in the coming months. Dawn O’Sullivan said: “The reaction to Boost in the UK just keeps getting better and better. Customers really love our smoothies and often describe them as a ‘meal in a cup’ as they are a much healthier option than most ‘on the go’ meals.”
Whitbread executive – “water is the next oil”: Whitbread’s head of energy and environment, Chris George, has claimed that "water is the next oil." Last month Whitbread became the first company in the hospitality industry to receive the Carbon Trust Water Standard after putting in place a series of robust measures to monitor and reduce its water footprint by a quarter. So far, the measures have saved the company 450 megalitres, the equivalent of 180 Olympic-sized swimming pools, each year. Whitbread now claims to be the only company in the UK that has rolled out real-time water metering technology at every one of its sites. The system not only identifies leaks, but also sends a text message to engineers to fix the problem. The monitors saved Whitbread about £400,000 by spotting 11 major leaks last year. George said: “Water is the next oil. Water is the next big environmental challenge for us with a rising global population. In the UK we're used to seeing water as an abundant resource but that has to change."
Stratford pub near Olympic Park sells for in excess of £1.25m guide price: The Manby Arms in Stratford, East London has sold in excess of its guide price of £1.25 million through the agent AG&G. Michael Penfold of AG&G said: “On the one hand, it’s a big, handsome building dating back to the 1870s and it lies on an even bigger plot – four times bigger – so it’s a prime candidate for change of use or redevelopment. On the other, it’s close to what will be the new Crossrail station at Maryland, the Westfield shopping centre and the Olympic Park and is in a very up-and-coming area, so keeping it as a pub, perhaps with a good food offering, could be equally attractive and take advantage of the demographic changes in the neighbourhood.”
Ex-Waxy O'Connor's to become pan-Asian restaurant and bar: The site at the Five Ways leisure scheme in Birmingham's Broad Street that ran as one of Glendola Leisure's Waxy O'Connor's outlet until 2008 is to be turned into a pan-Asian restaurant concept and lounge bar under the name of Masakki. Pan Asian Restaurants Ltd, run by Birmingham businessman and restaurateur Mohammed Hussain, has taken the 17,000 sq ft, three-storey property, next to the new Hampton by Hilton Hotel, on a 15-year lease at an annual passing rent of £70,000. The deal was struck by Colliers International on behalf of the landlord, UK & European Investments. It is the third restaurant deal Colliers has negotiated for Broad Street in recent weeks. The property consultancy secured a letting for the Restaurant Group in a 8,700 sq ft unit on Broad Street, at 9 Brindleyplace for its American restaurant and bar concept Coast to Coast for the remaining 21 years on an existing lease at a rent of £190,000 a year. Colliers also advised UK & European Investments on another new letting at the Five Ways leisure scheme, Tiger Bills, an "East meets West" neighbourhood dining concept launched by Lifestyle Hospitality Group, which took the 3,600 sq ft former Bud-ha Blue unit on a 12-year lease at a passing rent of £40,000 a year. The new outlet will be the third Tiger Bills to set up in the UK after launches in Torquay and Exeter and will be operated by Midlands-based franchisee Craig Lewis. Paul Hands, a director in the licensed and leisure team at Colliers International in Birmingham, said: “Birmingham has a growing reputation as a real culinary destination and these three new restaurants will really enhance the increasing diversity of the city’s restaurant offer.”
Businessman buys village pub from Brakspear to guarantee its future: Brakspear has sold one of its pubs in South Oxfordshire to a businessman who grew up in the village and wanted to guarantee its future. The pub operator advertised for new tenants for the Sun Inn in Whitchurch when the long-standing landlords announced last month that they would be leaving. It has now been bought by Richard Hazell, 70, the owner of the tarmac contractor Hazell and Jefferies, for an undisclosed sum. He said: "When you’re tied to a brewery, it’s quite hard. Free house pubs have a better chance of surviving because they can buy their beer where they like and get better deals and they can do their own food if they like. The landlord will be able to run it as their own business – they will be running it for themselves, not for me. I will be the proprietor and will draw some rent, but I didn’t buy it with the intention of making a profit. I guarantee it will remain a pub for as long as I’m alive and hope my family will continue to support that when I’m no longer here. My family all used to go to the Sun when I was a child and I know it very well. If it closed, there would be nowhere else for people in the village to go.” David Nathan, finance director at Brakspear, said: “It was never our intention to sell the pub at any time. When the current tenants told us they would not be renewing their lease, we started looking for new tenants as we do with the vast majority of our pubs. However, we were made an offer which made commercial sense, so we accepted it.”
Two-times Michelin star chef names new Newcastle restaurant: Kenny Atkinson, the Newcastle upon Tyne-born chef who won Michelin stars at two different venues, as well as the Chef of the Year title at the 2009 Cateys, is to open his own restaurant in his home city under the name House of Tides. Atkinson, 36, who was awarded Michelin stars for his work at the St Martin's on the Isle restaurant in the Scilly Isles and the White Room restaurant at Seaham Hall in County Durham, is opening his restaurant in the first two floors of a five-storey listed former merchant house dating back to the 16th century on Newcastle's Quayside. It is expected to house between 70 and 80 covers, and should be opening later this year. The interior will include private booths overlooking the quay as well as an open kitchen. Atkinson told the Newcastle Journal: “Eating habits have changed. People are eating in more relaxed, informal venues that are more accessible and affordable. I will be using fine-dining elements like execution, finesse and quality ingredients, but serving the food in a more relaxed environment. The new restaurant will be about great food using great ingredients and creating a fun environment that people what to come back to.” Atkinson was food director at Rockcliffe Hall in County Durham before leaving in April.
Jongleurs firm collapses after site closures: Jongleurs operator Momo Leisure, which ran five comedy clubs, has collapsed into administration after losing two sites which it sub-leased from operators that have gone under. Momo Leisure ran sites in Birmingham, London and Bristol independently, as well as nights in Nottingham and Cardiff alongside the nightclub owner Luminar. By going into voluntary liquidation, the firm becomes the third company linked to Jongleurs to go under in four years. Regent Inns, which owned the chain at its peak, collapsed in 2009, with the rights to the brand name reverting to original founders Maria Kempinska and John Davy. In 2011 Luminar, which was running Jongleurs clubs in 12 of its venues, was put into administration. Several of the comedy clubs were subsequently closed. Luminar unveiled a "major partnership" with Momo in July to open more Jongleurs clubs and "revitalise the much-loved brand", starting with Cardiff. A site in Nottingham opened subsequently. The Jongleurs nights at the Bliss nightclub in Birmingham and the Sports Cafe in central London closed last month when the venues’ owners went under. Anyone owed money by Momo has been given notice under the Insolvency Act that the Birmingham-based corporate recovery specialist Rod Butcher, of Butcher Woods, has been appointed as insolvency practitioner. Creditors have been invited by an official notice issued on 23 September to a meeting on 4 October to discuss the company’s affairs, and the appointment of a liquidator. Luminar chief executive Peter Marks told Propel: “We will be continuing with Jongleurs and would like to do more. Momo had issues with closures in Birmingham and London, which knocked them for six. They are starting afresh with a new business.”
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