Oakman Inns reports ‘transformational’ year, set for exponential growth: Oakman Inns and Restaurants, led by Peter Borg-Neal, has reported a ‘transformational year’ to 6 April 2014 in which turnover grew 21% to £10,861,993 from £8,977,533 and new equity of £3.67m was raised. Like-for-like sales grew 2.4%, gross profit was up 15.3% to £4.1m and two sites were opened. The company invested £2.48m in the two new sites while repaying bank debt aggressively – it reduced by £302,000 from £1.45m to £1.15m over the course of the year. Group Ebitda declined to a loss of £806,000, affected by closure and pre-opening costs at three sites, a company restructuring with the arrival of two new directors and exceptional costs related to the fund-raising process. Losses before tax increased to £1.99m from £843,891 the year before. The company stated: “Although the financial results were disappointing the group made significant progress and 2013-2014 can be seen as a transformational year. The group is now geared to make impressive growth in the coming years. The balance sheet continues to reflect a business with growing tangible asset base, with fixed assets up from £5.641m to £7.382m. Furthermore, it should be noted that we have not, at any point, revalued any of our trading assets and, as a consequence, the book value does not reflect the underlying value of or high quality estate.” Average sales per core Oakman site exceeds £30,000 per week net and the company is set to grow to 13 sites this by May this year with four new openings, subject to completion of negotiations on one site. Borg-Neal said: “In our current financial year, the company has achieved 12.2% like-for-like sale growth and total turnover across eight Oakman sites is 21% up as of Week 38. Site Ebitda is set to be around £2.2m this current financial year with Ebitda of around £350,000 to £400,000. Oakman is now profitable and each new opening allows our Ebitda to grow exponentially. We think trading conditions toughened slightly from October 2014 onwards but we’re very optimistic that real disposable income is now growing thanks to lower food costs and the reduction in fuel prices.” Oakman is set to appear as a Top 100 UK Company in the Sunday Times Best Company to Work for 2015 list published in March. 

 

James Horler calls for restaurant ombudsman: James Horler, the industry veteran currently running 3Sixty Restaurants and the Red Hot World Buffet chain, has called for a restaurant ombudsman on the lines of the new Retail Ombudsman, an independent watchdog set up to deal with disputes between shoppers and stores. Writing in The Nottingham Post on Friday, Horler said: “For issues relating to hygiene and food safety, the Food Standards Agency is on hand to receive complaints. If your complaint concerns service, however, you’re at the mercy of whichever manager is at the restaurant that day and how they’re feeling. Most restaurants nowadays are more than happy to resolve any problems that might arise during a meal, but the presence of a body that restaurants can commit to sends out a clear message to people that we’re on their side. It might even help make up a diner’s mind when they’re choosing where to eat if they know that they’ll be treated well by an ombudsman member.” Horler, whose Rocket@Saltwater chain has an outlet in Nottingham, said a restaurant ombudsman could help solve the problems restaurateurs sometimes had with social media criticism: “Social media can be a great tool for restaurants and bars to engage with customers. However, it can also turn nasty when someone decides to take to Twitter to fix an issue instead of speaking to a member of staff who could have helped. This will remain a challenge as long as social media exists but perhaps people would be less likely to vent in public if there was a body available to support them in their complaint. The idea of more legislation is never on anyone’s wish list. That said, anything that helps customers have a better restaurant experience and promotes good overall service is something we should collectively embrace.”

 

Lovely Pubs reports December like-for-likes up 5%: Lovely Pubs, led by Paul Salisbury and Paul Hales, who oversaw the roll-out of Mitchells and Butlers’ 80-strong Premium Country Dining Group of country gastro-pubs, has reported that like-for-likes sales in December were up circa 5%. Paul Salisbury said: “We did well with corporate bookings – we do a lot of business with Jaguar LandRover, in particular.” The company opened its eighth site in November 2014, The Moat House Inn, Kings Coughton, Alcester, Worcestershire, a former Spirit leased pub with 4.5 acres of land, which it bought off an asking price of £300,000. The pub has 160 covers and Lovely Pubs invested around £700,000. It has a wood-fired oven installed serving a range of gratin dishes. It has a strong cider focus, being in the middle of an apple-growing area, and rooms based around a shooting theme, with names such as Holland & Holland and Purdey. The new site averaged between £60,000 and £70,000 in takings each week in December. “It’s taking about double what I thought it would take,” said Salisbury. “Christmas Day was fully booked before we even opened. There are still a lot of people riding out to take a look at it this month – takings are around £45,000 a week.” Salisbury also reported that he and his business partner Paul Hales have been approached to do consultancy work for an upmarket retirement home business, advising on design of public areas and the food offer.

 

Busaba Eathai to open most ambitious site yet – with bar evolution: Thai restaurant group Busaba Eathai is opening its most ambitious site in its 15-year history in Shoreditch. Following on from the group’s launch at The O2, Busaba Eathai Shoreditch, the brand’s thirteenth site, will open its doors this February. It’s spread across two floors accommodating 164 covers in the dining room bar and two terraces. The Shoreditch branch will introduce the modern Thai Kinnaree Bar to the Busaba Eathai brand. The Kinnaree is an angelic half-woman, half-swan creature that adorns many temples and palaces in Thailand. The Kinnaree Bar in Shoreditch will be adorned with a hand-picked selection of Thai art, from khon dance masks and bronze temple bells to the centrepiece - a hand-carved kinnaree statue created by craftsman ‘Lert’ from the far north of Thailand. The Kinnaree Cocktail list will include modern Thai twists and popular classics all influenced by the flavours and aromas of Thailand. The extended list includes; the Jasmine martini, a fragrant mix of gin, cloudy sake, jasmine and guava; the Mussaman Sour, a twist on the New York sour inspired by the earthy spices of Southern Thailand; and Busaba’s tribute to the best mango sticky rice street food stall in Bangkok, Ning’s Mango Colada. Chief executive Jason Myers said: “This launch marks a pivotal moment in the Busaba Eathai story. Our new site here in Shoreditch brings together all of the magic of its predecessors as well as representing our evolution as we celebrate our 15th birthday and look forward to our expansion across the UK.” To celebrate the opening and Busaba Eathai’s 15th birthday, Busaba will be hosting a succession of free live events starting in mid-February. On Friday and Saturday nights Shoreditch locals Hoxton Radio will be joining the Busaba team as resident DJs in the Kinnaree Bar. Busaba will also host six weeks of Sookjai events, focusing on creating a ‘happy heart’. Free yoga classes, meditation sessions, and wellbeing talks will be hosted at Busaba Eathai Shoreditch.

 

Starbucks to lay off workers at Seattle HQ: Starbucks is to lay off or reassign what it called a “relatively small number” of employees at its Seattle headquarters, the company has announced. Company spokeswoman Linda Mills declined to say how many employees will be affected. She said Starbucks was eliminating positions that were no longer aligned with its growth strategy, or were redundant with other roles within the company. The company will try to find other positions within the company for affected workers, where possible. “Thousands of net new jobs are being created as we open new stores,” Mills said. The company has projected about 1,650 new cafe openings during the 2015 financial year.

 

New Scots drink-drive limit sees sale of low alcohol beer rocket: Sales of low alcohol beer in Scotland have rocketed since the introduction of a lower drink drive limit in December, according to retailers. The new rules mean the average man can have just a pint of normal-strength beer before driving, and a woman only half a pint. The supermarket Tesco said sales of low-alcohol products had increased by 80% since the law came into force, while bars have also witnessed a higher demand for low-alcohol products, as well as smaller measures such as 125ml glasses of wine, the trade body for Scottish pubs said. Paul Waterson, chief executive of the Scottish Licensed Trade Association, said no figures had yet been made available on the effect of the legislation, but pubs had anecdotally noticed a change. He said: “Businesses certainly have been quoted as saying the drink-driving laws are having more of an effect than the smoking ban. People’s habits and attitudes to alcohol are changing as a result of the new legislation – they are drinking less even if they are not driving, as they are worried about if they have to drive the next morning.” Peter Sherry, owner of the Beerhive shop in Edinburgh, which stocks 200 different kinds of beer, said he had noticed far higher demand for low-alcohol products. “We have always stocked a certain number of beers which are under four per cent alcohol,” he said. “We also have a 2% stout which, when it was released about a year and a half ago, was very hard to sell. Now, however, it is much easier and we have a lot of people coming into the shop to ask about it particularly.” The new rules lowered the alcohol limit for drivers from 80mg to 50mg in every 100ml of blood, bringing Scotland into line with many other countries in Europe. The limit remains higher, at 80mg, in England and Wales.

Jamie Rollo – we expect Wetherspoon like-for-likes to have slowed: Morgan Stanley leisure analyst Jamie Rollo has forecast that JD Wetherspoon will report a drop in like-for-like sales growth next week. He said: “JD Wetherspoon will announce its Q2 trading update on 21st January. We expect the company to report like-for-like sales growth of 3-4%, a slowdown from the strong +6.3% reported in Q1, as trends weakened in October and comps are tougher this quarter (Q2 2014: +6.7%). On a two-year basis, this would be like-for-like sales growth of 10.2%, similar to 10% in Q1. As cost inflation remains high we expect operating margins to drop to a new low of 7.4% in Q2. At its Q1 results the company reduced its operating margin guidance to 7.2-7.8%, down from its prior range of 7.7-8.1%, and we forecast 7.7% for the full year, at the higher end of guidance. We continue to see Wetherspoon as a well-run operator, benefiting from strong trading trends and a rollout of new pubs. However, trading on 14.9x calendarised 2015e P/E, the valuation is at the higher end of its range in recent years as well as at the top end of the peer group, and we rate the stock Underweight.”