Propel Newsletter Archive Page

Admiral Taverns returns to Scotland with 111-site Heineken acquisition: Admiral Taverns has returned to Scotland with the acquisition of 111 pubs from Heineken. Admiral disposed of its last Scottish outlet in 2010, but the portfolio bought from Heineken has 18 sites north of the border. The deal means that Admiral now operates 985 pubs in total, having sold around 100 pubs in the past year, site-by-site. The company has a further 47 sites on the market and a handful of other disposals to make. Admiral’s chief executive, Kevin Georgel, described the Heineken package, part of the brewer’s Star Pubs and Bars business, as a “very good fit” with his company’s existing estate. “They play to our core competency and we do not anticipate a significant number of disposals,” he said. The vast majority are let on a substantive tenancy or lease basis, with no pubs currently closed in the package. “This transaction is an indication of our intention to develop the Admiral business and reinforces our position as the country’s leading community pubs group,” he said. Georgel told Propel that the company’s existing estate was producing a “very stable performance” with net income growth. “We are in line with our business plan and generally very pleased,” he said. Admiral is also seeing its highest ever level of enquiries about joining the company, Georgel said. Of future expansion plans, he said: “It’s not about numbers, it’s about buying the right pubs at the right price.” Sapient Corporate Finance advised Admiral Taverns on its acquisition. CBRE advised Heineken.

Industry News:

Deadline looms for sector benchmarking survey: This is the final week for operators to take part in the haysmacintyre Propel Benchmarking survey, which has a deadline for entries of Monday 21 September. Propel is partnering the chartered accountant and tax advisor haysmacintyre to produce the most comprehensive benchmarking survey ever undertaken in the hospitality sector. Those taking part will have access to the full results. Propel’s managing director, Paul Charity, said: “We think the results will prove invaluable in allowing sector businesses to understand how they compare to industry averages in key areas of the business. All information provided to us will be treated in strictest confidence, and the results go straight to haysmacintyre without Propel seeing them. However, we would like to list the companies who took part in the study (if you wish to be kept totally anonymous please tick the box at the end of the survey).” To take part in the survey go to: https://www.surveymonkey.com/s/ZKBXRRR

Grub Club to launch crowd-funding campaign: New food start-up Grub Club, which brings adventurous dining experiences to Londoners through an online pop-up network, will launch a crowd-funding campaign next week (25 September) seeking between £250,000 and £500,000 of funding through Crowdcube. Grub Club founders Olivia Sibony and Siddarth Vijayakumar hope to expand internationally. Grub Club has £100,000 pledged by their network of diners ahead of the launch. Revenue in their first year was over £200,000, and is set to double in 2014. In the first 18 months, Grub Club has hosted 1,000 events with 200 chefs cooking for over 20,000 attendees in 450 unique venues across London. A spokesman said: “We want to build a platform that allows chefs to seamlessly create the adventurous dining experiences that Londoners and people all around the world are really hungry for. The investment which we raise will allow us to develop our tech platform and nurture our growing community of chefs, which includes new talent and established names alike.” The crowd-funding campaign will be open for approximately two weeks, with investors receiving equity in return. Those who invest £10,000 or more will also have the opportunity to see Grub Club’s atmosphere of sociability, adventure and open-mindedness brought to life in an exclusive event hosted by a Michelin-trained chef in London.

ALMR adds its weight to campaign for business rates reform: The Association of Licensed Multiple Operators is one of more than 100 businesses from a cross-section of UK industry, including hospitality brands, who are co-signatories to a full page open letter in today’s Daily Telegraph, calling for fundamental reform of the business rates system. The ALMR’s chief executive, Kate Nicholls, said: “Over the past year, the ALMR has been vocal in calling for the government to carry out a reform of business rates, and that has borne fruit in terms of the current regime and the 2015 valuation process, but we need to see even more action to ensure that the tax is consistent, proportionate and fair. The costs of property in our sector have spiralled out of control over recent years and we are more highly taxed than any other property market in Europe. As we begin to look forward to next year’s general election, all parties need to be aware that this is a pressing matter for licensed hospitality businesses. If we want a sustainable high street, then the status quo is not an option. We will continue to press for business rates reform in order to promote a fair and flexible market, which allows our members to grow and prosper.”

Thousands of pubs, restaurants and cafes benefit from business rates discount: Almost 300,000 restaurants, cafes, pubs and shops across the UK have taken advantage of the government’s £1,000 business rates discount since it was introduced six months ago, a minister has announced. The scheme, which gives a reduction for premises with a rateable value of up to £50,000, is estimated to provide more than £272m of tax relief this year. It is part of a range of measures meant to support the UK’s high streets which also includes a reoccupation discount of 50% for new occupants of retail premises which have been empty for more than a year and the doubling of the extension of the small business rate relief until 31 March 2015. High streets minister Penny Mordaunt said: “We announced the biggest package of business rates support in over 20 years to support local shops, pubs, cafes, and restaurants. Overall, this is worth £1bn to business, with half of that backing high street shop and retailers in England.”

Company News:

Pret A Manger reduces US operating losses: Pret A Manger has reported its losses in the US as it grew sales 31% to £63,587,000 (2011: £48,459,000) in the year to 3 January 2013. The company opened 11 new stores in the US, an 28% increase in the size of the estate. Gross profit margin remained at 62%. Operating losses reduced to £1,255,000 compared to £1,613,000 the year before. The loss before tax amounted to £2,576,000 (2011: £1,804,000) because of exceptional legal costs in relation to employment litigation of £1,099,000, of which £570,000 has been provided in respect of future claims and associated costs. Meanwhile, the UK business has reported, in newly filed accounts, that like-for-like sales growth was 4.9% in 2013, up from 4.2% in 2012. Gross profit margin in the UK was 65.8% compared to 65.6% in 2012. The average mystery shopper score in 2013 was 94.5% compared to 92.4% the year before.

Mountain Range Restaurants explores funding options, increases wage rates: Mountain Range Restaurants, the Alpine-based food concept led by Greg Mangham and chaired by Stephen May, is exploring funding options to supports its growth. At the same time the company is raising wage levels across the business. With effect from 1 October, the company will no longer use the apprentice wage, while the minimum wage for under 18s of £3.79 will be replaced by a rate of £4.75. Mangham said: “In the past, MRR have had a rate for 18-21 and over 21s. This will now be combined to a rate of £7 per hour, which will be above the minimum wage.” In addition the company has reviewed and updated its contracts while introducing a new team handbook and training plan for all team members. Mangham said: “One of the key determinates in the company’s development was to increase its focus on the development of all members of the team. We have also just run our first incentive initiative for the team. Front-of-house staff in each site had the opportunity to win an iPad while the back-of-house winner was rewarded with a Red Letter Day of their choice. This will be reversed in November when the back-of-house team will challenge for an iPad ad the front-of-house team have a Red Letter Day as the prize. Further incentive programmes are planned.” Mountain Range Restaurant added the Chequers at Slaugham, West Sussex to its estate this week, the first site sold by Laine Pub Company since Luke Johnson’s Risk Capital Partners acquired a stake.

All Our Bars pledges support for Tax Equality Day: All Our Bars, led by Paul Wigham, has pledged its support to Tax Equality day on Wednesday 24 September, when pubs and restaurants will reduce prices to show the benefits to consumers of a Vat cut for the sector. Wigham said: “We are participating in order to raise awareness of the dichotomy between off-trade and on-trade. I am not naive enough to think that the government will do anything that is not at best tax-neutral but the public are unaware that in every aspect of our business – food sales, alcohol sales, et cetera – we have our hands tied behind our back. Yet we are a massive employer of young people and provide high quality, safe, controlled environments in which people can enjoy food and drink. This needs to be recognised, and last year, this event raised that awareness among our customers.”

Weir Inns eyes growth as trading profit rises: The north east of England and Yorkshire pub operator Wear Inns is considering expanding again after seeing its turnover rise from £11.75m to £13.4m, an increase of 14.5%. The company is planning to organically grow its existing estate of 26 pubs while potentially acquiring more pubs early next year. Wear Inns has reported total losses of £204,000 for 2014 due to the final consolidation costs of the 11 pubs it bought in 2012; an increase in depreciation charges of £198,000; and the completion of work to refurbish all its pubs and investment in new kitchen equipment as the business looks to move further into the expanding food market. Gross trading profit was £4.9m, up 12.5% on the previous year, and driven by a rise in food sales of 26.2%. Wear Inns has also been notified that it has made it on to the inaugural Investec Mid Market 100 list, ranking the fastest growing companies in the UK with a turnover of over £10m. Managing director John Weir said: “Overall, we are very satisfied with the performance of the company over the year and look forward to further improvements in the year to March 31 2015. We have just completed the refurbishment of all the pubs, the last being the Porter Cottage in Sheffield, and we may be looking to buy around three pubs in the first quarter of 2015 and two further later in the year.” Weir said the 11 pubs acquired in 2012 had seen like-for-like sales grow by 8%, with further like for like growth in the other pubs. “Growing our cask ale offering has been a great success – we are supplied by 12 microbreweries in the north east, and a further six in Yorkshire – while the growth in our food trade has been particularly pleasing,” he said. “We are looking at adding more premium products plus a selection of American craft ales in some of the pubs and improving further our food offering – the range of dishes and the way it is presented, but still in keeping with our mantra of providing great value all day, every day.” Wear Inns, which has its headquarters in the old offices of the Castle Eden Brewery in County Durham, is the biggest independent freehold managed operator in the region in terms of volume of beer sold. Since Weir and the company’s chairman, John Sands, formed Wear Inns in 2006, the workforce has grown from 105 to 265.

Punch Taverns offers free pint at 700 pubs as part of Cask Ale Week: In celebration of this year’s Cask Ale Week, Punch Taverns is offering pub-goers a free pint in over 700 of its pubs throughout England and Wales. The pubs included are part of Punch’s successful rotational cask scheme, Finest Cask, where Punch partners have access to over 100 regional beers throughout the year. Anyone can visit the website (www.freedrinkpubs.co.uk) from 22 September and enter their email address on the site in order to receive a free pint voucher. The website will also show all of the 700 participating pubs where the voucher is redeemable throughout Cask Ale Week. Supporting the Free Pint Promotion will be the Daily Telegraph, who will be featuring an article during the week where readers will be able to cut out a free pint voucher and redeem it in participating pubs. In its sixth year running, Cask Ale Week takes place from 25 September to 5 October as a celebration of great British beers in British pubs.

Yummy Pub Company praises partner Charles Wells: Tim Foster, co-founder of the award-winning Yummy Pub Company, has praised his landlord, the brewer and pub operator Charles Wells, in the wake of the opening, three weeks ago, of the third Yummy pub owned by the Bedford-based firm, the Victoria in Bow, East London. Foster said: “It’s brilliant to see the passion Charles Wells have retained as a business in their people. I meet different people everyday who complain about being part of the ‘big organisation’ or ‘just a number’. I know the business is not huge, but it’s big enough. To have an entire property team, sales team, one of the fellas in change of it all, mucking in at the last minute to get everything looking shipshape as we opened the doors was not done because they were told to, it was done because they genuinely care.” Foster also revealed plans to create a roof garden at the site. He said: “The flat roof gardens are next. No point planting as we head into the middle of autumn, but this time next year, the view from Google Earth (or maybe one of those little drone things) will be a green oasis of veggies, salads, chickens and flowers. It’s going to give a whole new meaning to the ‘kitchen garden’ but it will be locally sourced, that’s for sure.”

Tim Martin – Wetherspoon will invest €100m in Ireland: JD Wetherspoon founder Tim Martin told the Irish Independent tat the company will invest €100m opening 30 pubs pub in Ireland. Having already bought three pubs in Dublin and two in Cork, his company is now looking at sites in Galway, Martin said. “We are putting a lot of money into the country,” he said. “But the speed at which we can open these 30 pubs depends on how Irish customers respond to us.” Martin also explained his decision not to buy the chain of pubs developed by the Capital Group which were recently put up for sale. They include Dublin institutions Cafe en Seine and Howl at the Moon. Those pubs’ recovery over the past year means their sale price will include a large amount of goodwill, he said, which would be too costly for Wetherspoon given that it plans to totally revamp Irish acquisitions to fit its own style. Meanwhile, the dispute over prices that has prevented Wetherspoon from selling Guinness or any other Diageo product in its newly opened Dublin pub is unlikely to be resolved in the short to medium term, Martin said: “We are one of Diageo’s biggest pub customers in the world. We don’t think its fair that we pay far more for their products in Ireland than we do in the UK.” There is “quite a big difference” between what Diageo charges in Ireland and the UK, Martin said, declining to reveal the exact price difference for commercial reasons. He said there had been no progress on a deal with Diageo and there was unlikely to be one in the short to medium term. However, he said, “It is possible to do without Guinness in Ireland.”

Hard Rock Cafe wins biodiversity award: Hard Rock Cafe and its landlord in Manchester, The Printworks, have been awarded Manchester City Council’s prestigious Biodiversity Hotspot Award for their positive contribution to local biodiversity. The award, which is only allocated to five or six different project each year, focuses on small conservation areas that champion wildlife and environment improvement in the city. It has been made in recognition of work carried out at The Printworks’ sustainable urban rooftop garden. The venture, which started two years ago, now features an allotment, herb garden, Hard Rock Cafe’s beehive, and the most recent additions – six chickens. Produce from the roof has previously been donated to a local charity, the Booth Centre, which provides support for homeless people in Manchester, while the first yield of honey from the bee hives, due to be harvested this month, will be sold to raise money for the Booth Centre and Forever Manchester. Emma Livingstone, sales, marketing and events manager at Hard Rock Cafe Manchester, said: “We are delighted to be recognised for all our hard work, and we are honoured to receive the Biodiversity Hotspot Award for our involvement in the rooftop garden and especially our bees.”

Floating restaurant opens in Northampton: A floating restaurant and bar on the Nene in Northampton finally opened to the public yesterday, four years after the family behind it first sought planning permission. The Patel family, who previously ran the Clicker pub in Abington and the Five Star Bar in Wellingborough Road, Northampton, said their new venue, The Ark, will have a traditional English menu, including steaks and pub classics such as fish and chips. The 75ft boat was custom-built at a factory in Worcester and delivered to Northampton in two pieces. Plans for the floating restaurant were first submitted to Northampton Council in 2001, but became bogged down in protests, as members of the gay community said it would disrupt an area where gay people had met in the evenings for more than 50 years. In addition, part of the delay in winning planning permission, owner Hema Patel said, was because such a project had never been attempted before. “No one had ever been to the council to ask, ‘Can we put a boat on the river and open it as a restaurant?’,” she said.

Tinned fish restaurant opens in London: A pop-up restaurant selling only tinned fish has opened in Upper James Street, Soho, London. The restaurant, Tincan, is the brainchild of the architecture company AL_A (sic), whose team apparently came across a similar restaurant in Lisbon. The menu at Tincan features 28 different types of tinned fish, all of which are served with bread and salad. Prices start from £7 for more common tinned fish, and rise to £28 for a tin of wild red tuna, or blue-fin tuna. Other tins include anchovies, baby sardines, calamari in ink, clams, cockles, cod liver, mackerel, mussels, octopus and scallops. Everything from the tables and chairs to the light fittings has been specially designed for the restaurant by AL_A, which describes Tincan as “bringing the culture and sensibility of an architect’s studio to a restaurant”. The restaurant is open for the next six months from midday to 11pm Monday to Thursday, and 11am to midnight on Fridays and Saturdays.

KFC working with charity to bring in hedgehog-friendly milkshake cups: KFC is working with an animal charity to try to make its “Krushem” milkshake cups less dangerous to hedgehogs. The British Hedgehog Preservation Society, which is based in Dhustone, near Ludlow, says hedgehogs are becoming stuck fast in cups discarded by customers. The problem could be avoided by making the lids smaller, it says, and talks are taking place between the charity and KFC, which says it is looking to find a “feasible solution” and asked its engineers to come up with a new hedgehog-friendly design. Fay Vass, chief executive of the British Hedgehog Preservation Society, said initial talks with KFC had been “encouraging”. The society has already persuaded McDonald’s to change the design of its McFlurrys cups. Vass said: “The lids on top of the Krushem milkshake cups are large enough for a hedgehog to put its head in, but when it tries to pull it out again their spikes get stuck and push back against them. Once the hedgehog is trapped, they can die, because they cannot get any food and water. Others sometimes drown after walking into ponds because they cannot see where they are going. The lids on the Krushems are about five centimetres wide, which is just big enough for a hedgehog’s head. We’re hoping the size will be reduced to about 3.5 centimetres, like the McFlurrys.” Meanwhile, KFC is putting the “Red Tractor” farm assurance logo on its packaging in the UK from this week. The chain is also running a national press advertising and social media campaign this week, Red Tractor Week, to highlight its assurance credentials.

Brewers Fayre and Premier Inn approved for Rhyl: Councillors have approved an application to build a 70-bedroom Premier Inn and a Brewers Fayre restaurant on the West Parade in Rhyl, North Wales. The developer Chesham Estates put in the application to redevelop the derelict space left by the former Honey Club, which was demolished earlier this year. Hugh Evans, leader of Denbighshire Council and cabinet lead member for regeneration, said: “The site is a prime location on the promenade and the regeneration project forms part of wider efforts to breathe new life into West Rhyl. This scheme will provide much needed visitor accommodation that will enhance the local tourism offer. We also want this development to be a catalyst for further inward investment. We have already received numerous enquiries about companies interested in locating in Rhyl. We are confident that this quality development will contribute to the local economy and create new jobs in the town.”

Supermarket chain signs up with Starbucks: The Swedish supermarket giant ICA is to establish Starbucks cafes next to its grocery stores, after signing an agreement with Starbucks Coffee Company. The retailer, which runs around 1,300 stores in Sweden, ranging from convenience stores to hypermarkets, plans to open three Starbucks cafes in 2015, which will be evaluated prior to launching others. Starbucks currently has an extremely limited presence in Sweden. Per Strömberg, ICA’s chief executive, said: “By adding the new businesses that complement the ICA store and retail centre, we can generate growth in our core business; grocery stores. Cafe industry is growing and this is part of our plan to strengthen, our customer offering.” Starbucks has had a partnership with the Danish grocery retailer Dansk Supermarked since 2012 which has seen nine Starbucks cafes open in Dansk Supermarked stores. The latest branch opened in August. In the UK, there are Starbucks outlets at 27 Sainsbury’s supermarkets.

Orderella forms partnership with the ALMR: Orderella, the market leading mobile ordering app, has partnered with the Association of Licensed Multiple Retailers (ALMR) to help develop its existing operator relationships, build new ones and cement its reputation as the very best app of its kind in the sector. As part of its strategic development plan for the next 12 months, and on-going support of our vibrant and exciting hospitality industry, Orderella will now be working with the ALMR throughout the remainder of 2014 and during 2015 across a broad programme of activities. Kate Nicholls, chief executive of the ALMR, said: “Licensed hospitality is one of the most exciting and innovative sectors in the UK, always ready and eager to embrace the newest trends and technology. We are pleased to be working with Orderella and looking forward to bringing their know-how to our members over the next year.” Dennis Collet, Orderella chief executive, added: “The last quarter has been a particularly strong one for Orderella, with a host of excellent operators launching the app at their sites. We’re now looking ahead to the next 12 months and to build on our industry relationships and demonstrate our commitment to supporting the hospitality sector. We are confident our partnership with the ALMR will keep us top of mind in the industry and help us get in front of people who haven’t yet used the app for themselves, or seen the benefits it can bring to sites.”

Pelican launches food allergen tool: Pelican Procurement Services, the procurement and supply chain management specialist, has launched a cloud-based system that provides food allergen information to organisations serving food to the public, in readiness for new food labelling legislation. Piranha is a free menu-costing system that provides Pelican customers with a live, detailed breakdown of portion costs and offers allergen and nutritional information. From 13 December, the Food Information for Consumers Regulation legislation comes into force, which requires any operation that provides food to the public, whether a restaurant, take-away, school, college, hotel or hospital, must be able to provide details of any allergens contained within a dish, on request. A financial penalty will apply if the new legislation is not adhered to.

Richard Caring sells Wentworth golf club: Richard Caring, owner of Caprice Holdings, whose restaurants include The Ivy, Le Caprice and J Sheekey, and who is a backer of the Bill’s, Grillshack and Jackson & Rye chains, has sold the Wentworth golf club in Surrey, home to the annual PGA tournament, in a deal worth £135m. Wentworth was bought by the Chinese conglomerate Reignwood Investments from Caring’s WG Acquisition. Caring said he had received a “multitude” of offers in the nine years that he owned Wentworth: “However, I have always looked for an owner with integrity, a recognition of the iconic nature of Wentworth, an understanding of the special place it keeps in so many people’s hearts, an owner who wants to develop the club ever further, improving on what is already a masterpiece, someone with knowledge and experience of the sport and with premium quality international connections and, last but not least, long-term vision.” Caring will remain with the club as non-executive director. It was while negotiating with the then owners of Caprice Holdings in 2005 to try to strike a deal to improve the food at Wentworth that Caring decided to buy the restaurant company, for £31.5m.

Brian Whiting – ‘Harvey’s has acted disgracefully over pub’: Whiting & Hammond founder Brian Whiting has accused the Lewes-based brewer Harvey’s of acting disgracefully over Old Dunnings Mill in East Grinstead, Sussex, which the brewer has decided to take under management as Whiting & Hammond’s lease expires this month. Harvey’s is planning to take half of its tenanted estate under management but has spoken of its regret that negotiations over the Whiting & Hammond pub have been “not as amicable” as it would have liked. The brewer has claimed that it was not prepared to continue to lose money on the site and the two sides were unable to agree a rent. Whiting, breaking his silence on the subject, said: “Ten years ago, when we took the site on, it was in a pretty poor state. The building hadn’t been open full-time for approximately two years, opening occasionally on the weekend. Harvey’s had tried to sell the site but had failed to offload it as nobody was interested. After a joint investment by Harvey’s and Whiting & Hammond, the site was reopened. In the past decade, the area where the Old Dunnings Mill is sited has gone through a major development, which has meant that the pub has been run in this time on a building site. [The work] has now been completed and the area itself is much better [but] this has taken over five years. I think it’s a disgrace the way Harvey’s has acted. Now things are rosy, the greed factor has stepped in. Landlords who are frightened that an operator is making a penny more than them do not deserve to succeed. Harvey’s have stated in the press that it is looking to take back most of their sites to managed. Ironically, they’ve never run the site in the past so this should be quite interesting. I thought that landlords acting in this way had become a thing of the past, [but] sadly I’m mistaken. If we [had] ever thought ten years ago Harvey’s would want to take this site back at the end of its term we would have never done the deal. It’s a real kick in the teeth to build up a site from absolutely nothing. If I was a Harvey’s tenant right now and this was my livelihood I’d be looking for something else. It’s quite clear there is no loyalty and [tenants] will be out on your ear at the end of [their] term. My heart goes out to the team at the Old Dunnings Mill who have based their lives in East Grinstead and are now left with a novice operator with no food skills whatsoever. If I could find the pub in the area I would take [the staff] and set up in competition – you never know, this might just happen. As a company, I will be boycotting Harvey’s products from now on. Ironically, I’ve had phone calls from other operators on hearing the news [to say[ that will also be boycotting their products. One of my biggest disappointments regarding this matter is that you hear tales in the past of big pub companies treating their tenants in this manner. You would never have expected a regional family-owned brewer to behave in such a way, may they hold the head in shame.”

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