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Thu 4th Mar 2021 - Osmond – For the hospitality industry, unpaid back rent of over a year is now an existential threat |
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Osmond – For the hospitality industry, unpaid back rent of over a year is now an existential threat: Serial sector investor Hugh Osmond has said that for the hospitality industry “unpaid back rent of over a year is now an existential threat”. Osmond said: “160,000 hospitality venues large and small employing three million people have rent liabilities of around £8bn over the 14 months they have been forced to close by the government or trade with heavy restrictions. The government now needs to provide more than a moratorium to solve this. We have to keep pushing for a government-mandated rent solution. Leaving the back debt to be sorted out as a free-for-all will be awful for landlord tenant relations.” Loungers chairman Alex Reilley called for leadership from the government on the rent issue. He tweeted: “We have a roadmap and we now know what we’re dealing with in terms of support but the biggest threat to thousands of hospitality businesses remains rent. We need to accept that the government will not intervene financially and that they are currently simply hopeful that landlords and tenants will be able to work it out. This is a dangerous tactic that is certain to end in catastrophe for many businesses in our sector when debt and forfeiture protection ends. It’s now imperative that the government recognises the urgent need to take the lead and work with landlords and tenants to find a workable solution for all parties. The ‘Code’ needs to be beefed up to include consequences of failing to follow the Code and both sides need to understand the need for compromise. It’s no coincidence that there are very few examples around the globe where this issue has been resolved – it’s extremely complicated but that must not stop us from trying. Kwasi Kwarteng (secretary of state for business) your predecessor was highly skilled at kicking a can down the road – clearly that’s not what we need. This needs to be a high priority for you and your department and we desperately need some leadership and unwavering determination. Failure to do so is going to see hospitality businesses falling at the final hurdle and a lot of taxpayers support going to waste. All these new support measures are great for businesses that can trade through/out of their rent debt but they’re useless for businesses whose premises will be immediately repossessed, by land-grabbing landlords, when the lease forfeiture moratorium expires.” London Union founder Jonathan Downey said: “Thank you for the VAT, furlough and business rates extensions but rent, rent, rent, rent, rent. You’ve got to do something about the billions of pounds of rent debt. All these new support measures are great for businesses that can trade through/out of their rent debt but they’re useless for businesses whose premises will be immediately repossessed, by land-grabbing landlords, when the lease forfeiture moratorium expires.”
Operators Nando’s, Bistrot Pierre and Azzurri discuss getting closer to their customers in Propel and Yumpingo webinar: Propel and Yumpingo, the guest experience management platform, will host a free webinar on Thursday (4 March) with leading operators exploring how they have used lockdown to get closer to their customers, and how they are “surfacing the voice of the guest” in their organisations to drive ever-improving standards and experience. The operators joining the discussion are Nick White, chief executive of Bistrot Pierre, Vikram Badhwar, global head of operations technology at Nando’s, and Joel Robinson, digital and technology director at Azzurri Group. They reveal the changes their companies have delivered in the past six to 12 months, the evolving multi-channel nature of their brands, and how technology is enabling them to get much closer to what their guests think, feel and say. Joined by Yumpingo chief executive and founder Gary Goodman, the discussion also explores how leading brands are harnessing net promotor scores as the leading metric in their businesses to drive their operations, teams and guest experience management, to deliver more happy guests and ultimately higher sales and profits. The webinar will be sent out at 9am this morning (Thursday 4 March). Yumpingo is a Propel BeatTheVirus campaign member
Wetherspoon to open 394 pubs in April: Wetherspoon is to open beer gardens, roof top gardens and patios at 394 of its pubs in England from Monday 12 April. The pubs will be open from 9am to 9pm (Sunday to Thursday inclusive) and 9am to 10pm (Friday and Saturday), although some have restrictions on closing times and in those cases will close earlier. They will offer a slightly reduced menu, to include breakfast, burgers, pizza, deli deals, fish and chips and British classics. Food will be available from 9am to 8pm seven days a week. Customers will be able to order and pay through the Wetherspoon app, however, Wetherspoon staff will be able to take orders and payment at the table from those who don’t have the app. The Wetherspoon pubs will not be operating a booking system. Customers will be able to enter the pub to gain access to the outside area and also to use the toilet. Test and trace will be in operation and hand sanitisers will be available. Wetherspoon chief executive John Hutson said: “We are looking forward to welcoming our customers and staff back to our pubs.”
Revolution Bars Group to open 20 sites in April: Revolution Bars Group, the operator of 66 premium bars, trading under the Revolution and Revolucion de Cuba brands, intends to open 20 bars on 12 April, and with the opening of indoor hospitality on 17 May 2021, all 66 bars will reopen. The company stated: “The subsequent additional support announced for the hospitality sector by the Chancellor in the Spring Budget on 3 March 2021, particularly the restart grants, continued reduction in business rates, low VAT on food and non-alcoholic drinks and other measures are also welcome. This support will give further certainty to all our stakeholders and allow the company, together with the wider hospitality industry, to regain a financial position from which it can again develop and thrive. In December 2020, the group estimated that if it were unable to trade due to enforced closure because of the pandemic and taking into account the various governmental support schemes and its agreements with landlords, the company’s cash burn would be approximately £0.4m-£0.45m per week. At that time, the group had £17.6m of liquidity headroom. The group therefore has more than sufficient liquidity resources available to take the company well through 17 May 2021, the date that its estate will be able to commence trading indoors in line with the government’s phased release of current lockdown measures. This assumes no tightening of government restrictions over that period. Previous experience has demonstrated that when the company is able to trade without restriction, targeted for 21 June 2021 in the reopening roadmap, it is highly cash generative and profitable. Furthermore, the group anticipates that following easing of restrictions there will be significant pent-up demand and the group will enjoy a rapid rebound in trading. At 3 March 2021, the group had net debt of £27.1m with available liquidity resources of £9.8m, as a result of the weekly cash burn detailed above and following the cash outflows related to the previously announced CVA and lease surrenders and the working capital outflow associated with the full closure of the estate on 30 December 2020.” Rob Pitcher, chief executive of Revolution Bars Group said: “With the encouraging progress of the vaccination programme, clarity in the timetable to reopening, and the additional financial support measures announced by the Chancellor, the light at the end of the tunnel is getting brighter. Notwithstanding that good news, our industry remains on the critical list and the continued support announced by the government is required to ensure that we can be in a position to return to growth and be a driver of national job creation once again particularly for young people who are the lifeblood of our industry and who have been severely impacted over the last year. We are excited at the prospect of welcoming back our colleagues and guests and providing fun and memorable experiences for them as lockdown restrictions ease.”
Bill’s Restaurants reports confidence it can out-perform: Bill’s Restaurants, owned by Richard Caring, negotiated an undrawn £10m business support facility with its bank last year to use if needed. The company said it has re-opened restaurants in July last year in a phased manner and all had been profitable – although 11 had remained closed. The parent company, Bill Stores Limited, had breached its financial covenants with an HSBC revolving credit facility – it had received a waiver. The company reported a 3% rise in turnover to £127m in the year to 31 December 2019. An impairment of £8.3m (£4.2m in the prior period) was booked against 29 sites. Underlying Ebitda was £6.8m (prior period of 74 weeks it was £9.8m). The company said the pandemic had allowed a chance to review the performance of sites. It added: “Whilst management is still in the process of finalising strategies for these restaurants, there is confidence that negotiations on reduced rental costs, as well as other cost reductions, will result in the remaining portfolio of site outperforming much of the casual dining market.”
Budweiser to expand Wales and Lancashire breweries: The world’s biggest brewer will today announce a £115 million investment in its two main UK breweries in south Wales and Lancashire as it plans for a post-coronavirus recovery. Budweiser Brewing Group, the Britain and Ireland arm of AB InBev, said the investment would increase capacity by 3.6 million hectolitres — the equivalent of 630 million pints — and create 55 jobs while helping to protect jobs in the wider pubs and brewing sector, reports The Times. The company’s plant in Samlesbury, Lancashire, has been brewing beer since 1972, while Magor in Monmouthshire opened in 1979, and together they employ 1,000 workers. Both were built by Whitbread, which exited brewing in 2000. The company said the investment was “good news for the UK economy after a tough year, and underlines the value of the beer industry”. It cited figures suggesting the beer sector as a whole is responsible for nearly 900,000 brewing and pub jobs worth £22.9 billion to the UK economy. It said the main focus of the investment would be the installation of modern, eco-friendly infrastructure as part of an increase in brewing, canning and bottling capacity. Paula Lindenberg, president of Budweiser Brewing Group, said: “The beer industry is hugely valuable to the UK economy, and we believe our investments in our UK operations will be a catalyst for the recovery post-covid.”
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