Douglas Jack – my key stock picks are M&B, Marston’s, Domino’s, Punch and The Restaurant Group: Numis Securities leisure analyst Douglas Jack has published his annual review of the sector, called Expand and Prosper, in which he chooses his top share tips. He said: “We do not expect much re-rating in the sector until 2016, when Enterprise Inns and Punch Taverns should be in a position to confirm the impact of the Market Rent Only option, and when Mitchells & Butlers should be showing the benefit of its operational/investment initiatives. As such, we are more interested in the capacity to create equity value through Ebitda growth and debt reduction. This measure should favour Mitchells & Butlers, Marston’s and Domino’s Pizza the most in 2015E. Managed pub/restaurant like-for-like sales have grown for 23 consecutive months, averaging 2%. Against this backdrop, operators are stepping up expansion, critically targeting superior segments (such as food-led pubs and casual dining restaurants). Domino’s Pizza and Fuller Smith & Turner have the strongest like-for-like sales; Domino’s Pizza and The Restaurant Group have the strongest expansion plans. Cost inflation is low, helped by falling food and fuel costs. In 2015E, we estimate that 2.5% like-for-like sales (higher if discounting steps up) will be needed on average, before cost mitigation, to maintain Ebit margins. All the quoted tenanted/leased pub estates are in like-for-like profit growth, boosted by investment, a more stable backdrop for wet-led pubs, and the adoption of managed pub disciplines. The Market Rent Only (MRO) option is a disappointment, but we expect less than 10% of leased/tenanted pubs to go free-of-tie, all of which could go into a REIT. The MRO conversion rate and resultant impact should become clearer from May 2016, removing the longest-running regulatory uncertainty in the history of the industry. Average share prices rose 4% over the last 12 months, with 7% average earnings growth partially offset by a 3% de-rating. The big out-performer has been Domino’s Pizza. We believe the licensed retail sector is fairly valued overall at 7.3% equity FCF yield, 9.8x EV/Ebitda (8% above the ten-year historical average) and a P/E of 15.5x. In comparison, for 2015E, we forecast average earnings growth of 8.2%, average dividend yield of 2.3%, and 2% average debt reduction. Overall, our target prices assume minimal re-rating. On this basis, if forecasts hold, there is sufficient debt reduction/Ebitda growth to drive attractive equity upside, particularly for Mitchells & Butlers (Add), Marston’s (Add), Domino’s Pizza (Buy), Punch Taverns (Buy) and The Restaurant Group (Buy).”

SSP opens premium restaurant in Newcastle airport: The transport foodservice specialist SSP Group has opened a premium bar and dine-in restaurant, Bar 11, at Newcastle International Airport’s new £14m departure lounge. SSP worked closely with the Newcastle upon Tyne artist John Coatsworth, whose artwork is the backdrop to the menu, to create a what the company called a "retro-chic" setting where guests can relax in armchairs, surrounded by artefacts and decor that "celebrates" the north east of England. Working with M&J Seafood, Bar 11’s menu offers a variety of fresh fish from the North East of England coastline, handmade breakfast sausages from Drops Well Farm in Durham, and bacon and burger meats sourced from the North East of England butchers Manners and Sons, who have reared cattle since 1913. Simon Smith, chief executive of SSP UK and Ireland, said: “Our local knowledge has enabled us to create this unique concept which celebrates the very best of the North East. Bar 11 will no doubt make a great addition to the airport’s new departure lounge and we are delighted to continue our working relationship with Newcastle International Airport.” The concept is the latest of six outlets SSP has recently brought to the airport. It has already opened an American-style diner, Flying Hippo, and a "chic" bar, Cabin. In addition, the Beer House, an "authentic" pub stocking locally brewed ales, opened its doors in 2013.

  
Pret A Manger opens first transport hub site in New York: Pret A Manger has opened its first transport hub site in New York City, 15 years after arriving in New York. The company has opened at New York's Penn Station its 39th site in the city. The new shop, a 1,900 sq ft location seating for 30-plus people, is on the LIRR concourse. Jo Brett, president of Pret A Manger US, said: "We've been proudly operating in New York for 15 years now and are thrilled to be opening our first transport hub shop in the city. Penn Station is one of the busiest transport hubs in America and presents an excellent opportunity for us to continue serving the people of New York and its visitors."

Distinctive Inns takes third site, first Star Pubs & Bars venue: East Midlands-based multiple operator Distinctive Inns has secured its third site, The Priory in Nanpanton outside Loughborough, its first site with Star Pubs & Bars and will make a co-investment of £650,000. Funds are being spent on a complete overhaul of the interior and exterior of the pub opening up the bar, restaurant and function room to create a large open space with defined eating and drinking areas featuring a mix of parquet floor and tiles with comfy sofas and a large feature wall in the restaurant area. A new bar and a large kitchen are also being installed, allowing the pub to prepare everything fresh on site and cater for 150 covers. Distinctive Inns is run by James Bull and Ross Tunaley, whose other sites are in Cinderhill and Farndon in Nottinghamshire. Bull said: “When we first saw The Priory we recognised its potential. It is a massive pub located on a main road near the Loughborough junction of the M1, and so can attract trade over and above its immediate locality. It has operated under a number of different management companies in recent years and has become tired and run down. Our joint investment with Star Pubs & Bars and new offer for the pub will enable The Priory to reach its potential.” 
Wrap it Up hits crowdfunding target: Wrap it Up, which was founded in 2006 by Tayub Mushtaq and aims to become the "Subway of wraps", hit its crowdfunding target on Crowdcube yesterday, raising £400,000 from 176 investors in return for 6.25% of its equity, with 33 days left. The company forecasts turnover of £5.94m of in the year to December 2017 and ebitda of £781,000. Its exit strategy is via either a trade sale or a stock market listing in around five years.

Costa to roll out lessons learnt with first 'zero-energy' cafe to future new-build stores: Costa Coffee will roll out the lessons it is learning from its first zero-energy "eco pod" cafe at the Wrekin Retail Park in Telford, Staffordshire to future new-build stores, the company says. The 150 sq m cafe, which opened earlier this month, and which has room for 58 people inside and 20 outside, achieves its "zero energy" rating through initiatives such as a timber frame from sustainable sources, a super-insulated façade, "intelligent orientation" of the building for optimum levels of sun and shade, and solar panels on the roof. The building, which is leased by Costa, was built in partnership with Hammerson, the company that owns the retail park. Jim Slater, managing director of Costa UK and Ireland, said: “This is an outstanding new type of test-bed building design which really does have the potential to make a massive difference if rolled out more widely.”

Tasty makes second attempt to win permission for Wildwood in Brentwood: The Tasty group has made a second planning application for a Wildwood restaurant in the former Clement Joscelyne building near Wilsons Corner, Brentwood, Essex, after its first attempt to get the use of the building changed from a shop to a restaurant was rejected by council officers last month. Brentwood planning officials said the design of the restaurant's exterior was "out of keeping", adding that another restaurant would be "further erosion of the character and appearance of the High Street". The new change of use application submitted to Brentwood Council has a "traditional wooden shopfront" as part of the plans. The application also addresses the council's stipulation that no more than 40% of ground floor units in the part of town where the Clement Joscelyne building is situated must be used for non-retail. The design and access statement prepared by chartered surveyors Meeson Williams Phillips says that if council officers give the change of use the go-ahead, the percentage of non-retail in the area will rise from 41% to 43%. Meeson Williams Phillips said: "It was concluded that given the length of time the property had been unsuccessfully marketed for retail purposes and as the 40% non-retail limit would be breached by only 3%, the adverse impact on the vitality and viability of Brentwood town centre would be limited." Tasty has already been given permission for a licence to sell alcohol at the building. Wildwood currently has 21 restaurants across the country.

Ever So Sensible Group sells Bakewell site: Ever So Sensible Group, the pub and restaurant operator led by Chris Bulaitis, has sold its Le Mistral site in Bakewell, Derbyshire. It has been re-opened as Riley’s wine bar and restaurant. The site is now owned by the Armstrong family, who own New Close Farm Shop, in Granby Road, Bakewell, after they joined forces with chef Carl Riley. The butchers are well-known in Bakewell for selling meat in their shop supplied by their own farm, in Over Haddon.

Former Thornbridge Brewery manager opens craft oasis: A former Thornbridge Brewery manager, Tom Harrington, has converted the former Delaney’s music bar in Cemetery Road, Sheffield into a “craft oasis" called the Beer Engine. Harrington says he wants the Beer Engine to become a brewpub in future, with plans to open a brewery next door, if the pub goes well. He said: “The ideal is to own a brewpub. I think it’s the future. I’m still going to keep on supplying beer from other breweries, but it would be great to have beer served which was brewed ten yards away, zero carbon footprint and delivery.”
 
Wetherspoon to open in Hednesford today: JD Wetherspoon is to open in the Staffordshire town of Hednesford today (population: 17,343). The company has invested £1.6m converting the former Anglesey Lodge, once the headquarters of the local property developer Pritchard Group. The new pub, which will bring a total of 60 jobs, has large beer garden at the front which is open until 9pm, as well as a smaller outside area to the side of the new front extension entrance. Historical photos, details of local history, information relating to events, historical buildings and characters of the area, as well as artwork by local artists are on display, including a commissioned sculpture of a jockey by the Cheshire-based artist Simon O’Rourke, who specialises in chainsaw carvings.
 
US celebrity chef signs for first product endorsement, Scotch whisky: The American celebrity chef Anthony Bourdain has become the face of Balvenie whisky, owned by William Grant and Sons. The partnership will focus on craftsmanship and the time and effort injected into producing products such as skillets and whisky. Bourdain said: “Over the years, I have been approached by a lot of companies and brands to work with them on all different kinds of projects but never did it. I was waiting for the right thing and, when I heard from The Balvenie, a brand and company I like, and heard about the concept, celebrating lone-wolf craftspeople, doing things the long, hard, old-school way, I thought, ‘OK, this is it.’”
 
Whole Foods Market halves UK losses: Whole Foods Market nearly halved its losses in the UK last year as it increased sales by 24%. The company lost £7.5m in the year to 28 September 2014, down from a £14m loss the year before, as sales rose to £101m. It has accumulated total losses of nearly £108m in the UK since it opened its first Whole Foods outlet in High Street Kensington, West London, in 2007. Sales in the UK were boosted by the opening of a new store in Richmond, South West London, in October 2013 and one in Fulham Broadway, West London, taking Whole Foods’ total number of UK outlets to nine. The company said it also increased sales at established stores by 6.8%. Whole Foods made its first move into the UK in 2004, when it bought the Fresh & Wild chain whose stores have now either been converted to the parent company brand or closed.

Rooney Anand adds to Greene King shareholding: Rooney Anand, chief executive of Greene King, has exercised rights to 74,751 shares in the company at a price of 528p each. He now owns 542,016 shares in the company, which were worth 841.5p yesterday afternoon, putting a value on his holding of £4.56m.
 
BrewDog re-launches online focus group: The Scottish brewer and retailer BrewDog has re-launched an online focus group, asking its shareholders and customers how it can improve. The company said: “We know there are things we do really well, and others where we can do that little bit better; this is your chance to let us know, officially and on the record. We ran a similar post a couple of years ago, and found it invaluable. Everything we do is dedicated to getting the best beer we can to you, and giving you a network of bars in which you can enjoy that beer (and those of others) in the very best of circumstances. But we can always do better.” One shareholder told the company: “Food is a tough issue. My two cents of advice would be to keep the food offer in bars at a basic level in order not to get lost in a by-product that only complicates the offering. Basic, yet with just enough diversity to satisfy everyone within the clientele profile, which is, by definition, not everyone. When I read all the blog articles and the comments on the subject, I get to wonder if you are planning to open a chain of restaurants. That could be a nice idea, but restaurants are not bars. In the current typical bar configuration, there is hardly enough tables for people to eat on, yet there is a growing food menu. In my view there is an important contradiction here and a clear strategic vision should be defined on this subject.”

Scoff & Quaff re-opens Stourport pub with stone-baked pizza offer: The award-winning gastro-pub operator Scoff & Quaff has reopened the Old Beams, just off Dunley Road in Stourport Worcestershire, after a £150,000 overhaul of the former 16th century farmhouse. The six-week refurbishment has seen the grade two listed in transformed into a 130-cover gastro pub with a new menu, a stone pizza oven and newly designed outdoor terraces. Nick Mossop, director of Scoff and Quaff, said: “The refurbishment of the Old Beams has given a new lease of life to the pub and one of Stourport’s historic landmarks. I think we have created somewhere really special and the feedback, from both locals and visitors to the town, has been exceptional.”

Kent Business names Shepherd Neame chief as county’s most influential person: A panel of independent judges has placed the chief executive of Shepherd Neame, Jonathan Neame, number one in the county’s Power List, published by Kent Business. He is also chairman of the British Beer and Pub Association and due to become chairman of the tourism agency Visit Kent from December. Neame, who became chief executive of Shepherd Neame in 2003, said: “Influence comes from the position you are in and the company or organisation that is behind you.”

Taco Bell Chelmsford to open this month: Taco Bell is to open its sixth UK outlet, in Moulsham Street, Chelmsford, Essex, very shortly, the company has announced. Wooden hoarding currently blocks off the unit with branding which reads "You asked for it. You got it." The hoarding also invites people to apply for vacancies. According to the Essex Chronicle newspaper, Taco Bell has said it will be opening the store, which is next door to a Cafe Rouge outlet, "in the middle of April". It is taking a site formerly occupied by the Futon Company, which moved to a new home in February last year. The new Taco Bell, which was first announced in July last year when the company applied to Chelmsford Council for permission to put up illuminated signs at the Moulsham Street site, will be the chain's third outlet in Essex, following openings at the Lakeside shopping centre and Basildon's Eastgate Shopping Centre. It also has two restaurants in Sheffield and one at the Arndale Centre in Manchester. Worldwide, the chain, a subsidiary of Yum! Brands, owner of KFC and Pizza Hut, has more than 6,500 restaurants.

Draft House goes big on wings: The Draft House chain of craft beer pubs in London, led by Charlie McVeigh, has boosted its wings offer, with the addition of a pound of Buffalo wings for £9.90, and Buffalo wings poutine, with Quebecois-style fries, gravy and curd cheese, for £8.90. Both dishes will be available all day on Wings Wednesdays for half-price. The chain has also added several dishes to the Pub Pie menus at its Hammersmith and Birdcage outlets, including pulled pork rolls, spanakopita (Greek spinach pie), the "Holy F*ck Scotch Egg" from supplier Pig & Hay, and two new sharing items, the Levantine plate for £9.90, which includes aubergine Baba Ganoush, hummous, labneh, harissa and flatbread, and the "perfect pig" plate, including foot-long scratchings, scotch egg, pulled pork roll and slaw, for £12.90.

Punch Taverns adds broker: Punch Taverns has hired Numis Securities as joint corporate broker to work alongside Goldman Sachs International, the company's existing corporate broker and financial adviser.
 
Euro Garages buys 68 Shell service stations: Euro Garages, the petrol forecourt and service station operator that features food outlets such as Starbucks, Subway, Burger King and Greggs on its forecourts, is buying 68 services stations being offloaded in the UK by Shell. The deal is part of the sale of 185 Shell service stations, 90 of which are being bought by Motor Fuel Group, which already manages BP-branded service stations. Shell said it expected to sign contracts for the remaining stations in the coming weeks. The stations will continue to operate under the Shell brand and will sell the oil firm's products for at least five years after the conclusion of the sales. Euro Garages has completed two substantial deals in the past two years, buying a total of 93 sites from Esso.