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Morning Briefing for pub, restaurant and food wervice operators

Wed 20th Sep 2023 - Update: Ten Entertainment H1, Wingstop, Adnams, Tiger Woods
Ten Entertainment Group year to date like-for-like sales up 4.7%: Ten Entertainment Group, the operator of 51 bowling and family entertainment centres, has said that year to date its like-for-like sales to 10 September were up 4.7% on the back of an “excellent” summer. For the 26 weeks to 2 July, the company reported sales of £65.3m, 3.3% ahead of H122, with like-for-like sales growth of 1.6%. Group adjusted Ebitda stood at £28.5m (2022: £28.8m), while group adjusted pre-tax profit stood at £15.8m (2022: £15.7m). It said that since 2 July, the performance over the summer has been “excellent” with like-for-like sales growth of 12.8% versus last year bringing the year-to-date like-for-like growth to 4.7% up to 10 September. It said: “Our value-for-money entertainment model continues to deliver for our customers. A unique blend of high-quality centres and attention to detail enables us to continue our growth.” The business has opened three new sites so far in 2023, with at least one more new centre to open this year, with a strong pipeline for 2024. The company said: “An ongoing focus on refurbishment, customer service and digital communications gives us confidence that we can continue to deliver like-for-like sales growth from the existing estate through addition of new activities and focus on the core entertainment experience. Cost inflation remains manageable, and we expect a slightly lower than the UK headline rate as a function of our long-term supplier strategy. We have secured energy cost security at sustainable levels beyond our current contract out to the end of September 2026. These factors give us the ability to drive modest profit growth from our underlying like-for-like sales growth. We are delighted with the quality and initial performance of our three new centres and look forward to adding our city-centre development in Sheffield by the end of the year. We have a good pipeline and anticipate adding at least four more new centres during 2024, with runway for further expansion within the UK. This pipeline forms the platform for significant profit progression. The group’s £25m RCF facility was due to expire in April 2024 and we are pleased to announce that we have refinanced this facility with RBS for a further three years at an increased level of £30m. Management expects to end the year with a modest cash positive position. This renewed facility supports the clear growth strategy while offering protection against any potential downturn or providing headroom for accelerated investment opportunities as they arise.” Graham Blackwell, chief executive, said: “We have delivered like-for-like sales growth in every reporting period since we reopened in May 2021 and have converted that into growing profitability. The fact that we can continue to deliver these results is testament to the quality of our product offering and the hard work of our teams throughout the UK. Our business continues to increase in scale and is in better shape than ever. We had already achieved 2019’s full year sales by August with acceleration of like-for-like sales over the summer and our profit for the first half of this year is greater than our total 2019 full year profit. We will continue to focus on delivering value for money for our customers, with best-in-class bowling and entertainment across each of our 51 bowling centres.”

Café and bakery concepts among 56 new businesses joining updated Premium Database of Multi-Site Companies: Café and bakery concepts are among the 56 new multi-site companies being added to the next edition of the Propel Premium Database of Multi-Site Companies, which will be released on Friday, 29 September, at midday. The updated Propel Multi-Site Database, which is produced in association with Virgate, features Centenary Lounge, which has opened its latest sites in Bicester and Solihull. The company’s concept is inspired by a 1930s Great Western Railway refreshment room and currently has five sites, with a sixth opening in Coventry soon. Bournemouth operator Aviary Hospitality Group has opened its second Flamingo Café Bar just a stone’s throw from the beach at Boscombe Spa, while Cake House Bakery, which sells cakes that are free from eggs, has grown to nine outlets. Premium subscribers will also receive a 4,000-word report on the new additions to the database. The comprehensive database is updated monthly and provides company names, the people in charge, how many sites each firm operates, its trading name and its registered name at Companies House if different. The database now features 2,983 companies. Premium subscribers are also to receive access to all the videos from this month’s Propel Multi-Club Conference and summer party. They will be sent 12 videos on Friday, 29 September at 9am. Premium subscribers also receive access to five other databases: the New Openings Database; the Propel Turnover & Profits Blue Book; the UK Food and Beverage Franchisor Database; the UK Food and Beverage Franchisee Database; and the Who's Who of UK Food and Beverage. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email jo.charity@propelinfo.com to upgrade your subscription. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before; regular video content and regular exclusive columns from Propel group editor Mark Wingett.

Wingstop joins campaign aiming to help lonely university students: The government is teaming up with charities, student groups and restaurant chain Wingstop UK to try to combat loneliness at universities. The new campaign aims to tackle the stigma of loneliness, after a YouGov survey suggested loneliness is experienced by 92% of students. A government commissioned YouGov survey of more than 1,000 students suggested worries about loneliness before starting their university courses affected 52% of students. This came ahead of other major concerns including managing money (49%), course difficulty (49%), finding suitable housing (26%) and fitting in (48%). The government will be partnering with the Wingstop in a campaign encouraging students to get together at meal times and directing them to the Better Health Every Mind Matters website, which has resources and support for loneliness and mental health issues. This will be featured on the chain’s in-store digital screens and social media channels. The government is also partnering with the Student Radio Association, accommodation provider Student Roost and mental health charities Student Minds and Sporting Wellness, to raise awareness of the campaign and its resources through their channels and university-focused activities. Malachy O’Keeffe, head of marketing, Wingstop UK, said: “As so many of our customers are Gen Z, we’re happy to support the Department for Culture, Media and Sport to reach young people through our restaurants. We know a lot of our customers are highly engaged young people, and we hope this campaign will help them support one another with some of the issues they face when moving away from home or to a new city for the first time. Sharing food with friends is a passion of ours and we hope many new friendships are formed over a love of food in our restaurants.”

Adnams – pubs and hotels continue to be in the eye of the storm: Jonathan Adnams, chairman of Suffolk brewer and retailer Adnams, has said that the group’s pubs and hotels continue to be in the eye of the storm, and that its half year for both should be viewed as two distinct quarters. The company said its hotels and pubs have traded well in terms of room occupancy although lower footfall in key coastal locations had meant walk-in food and beverage sales have been impacted. It said: “Further, the unwinding of the staycation phenomenon that occurred during the pandemic and immediately following has also been a factor in levels of footfall in key locations.” It said sales of beer to pubs outside of its own estate have also been more challenging and the company notes many rural pubs remain closed in the early part of the week. The company said: “Additionally, recent media reports are indicating two pubs per day (400 year to date) having closed for good in the first half of the year. Consequently, sales volumes to supermarkets have become a greater proportion of the company’s output and its lead product Ghost Ship 4.5% and low alcohol sibling Ghost Ship 0.5% have benefitted from increased distribution. Cashflow remains consistent and in line with expectations. In March the company reduced its debt position by £0.5m as part of its banking arrangements. The facility stands at £19.5m comprising of a £10m term loan, £6.5m RCF and £3m overdraft. Early in the year the company undertook a cost reduction exercise that looked at all costs and this unfortunately saw some job losses and changes to the way the company operates particularly in its production operation. This initiative is delivering ahead of plan as the company looks forward to its key trading period.” In reporting the group results for the six months to 30 June 2023, Adnams said: “Consistent with the rest of the business the half year for pubs and hotels should be viewed as two distinct quarters. In quarter one Managed Inns and Hotels were level with last year however, in quarter two sales growth of 10% was delivered and this pattern of trading was replicated by the leased and tenanted channel delivering 9% sales growth in the second quarter. Whilst encouraging, allowance needs to be made for systematic price inflation contributing some of the sales uplift. Therefore, pubs and hotels continue to be in the eye of the storm with food inflation, the return of foreign holidays and for Adnams, a dependence on good weather due to the coastal location of many of our properties. In February, The White Hart, Blythburgh reopened after a short refurbishment and kitchen upgrade. The pub is now managed and focusing on a great welcome for locals, walkers and visitors to the bar and gardens. In March we added a new experience for Adnams guests and visitors by adopting the Southwold Lighthouse. Working with Trinity House we are putting on daily tours up the 113 steps to the top led by our tour guides. Great views, some Southwold and Adnams history followed by a drink in The Sole Bay Inn has proved a successful and enjoyable formula. In June we received the Craft Guild of Chefs Sustainability Excellence Award, recognising the excellent work our teams have done to reduce food waste, work with local suppliers and making the most efficient use of cooking techniques and energy use. One year on from the removal of covid restrictions, the UK economic situation remained challenging in the first six months of the year with inflationary pressures continuing to persist and interest rates remaining stubbornly high. This has led to sales across the sector remaining almost 15% below pre-pandemic levels (source UK Hospitality). Lower levels of consumer confidence endure with around 35% of people saying they were going to spend less on going out (source: UK Hospitality) and KPMG citing in April this figure may be as high as 65% (source: KPMG, April 2023). Consequently, we continue to see the number of UK pubs continue to fall with the current 46,000 down some 15% from a decade ago (source: British Beer and Pub Association) and the cask beer market around 25% smaller than 2019. In June the accountancy firm Mazars reported some 45 breweries ceasing to trade in the 12 months to March 2023. It is against this backdrop I report turnover for the first half of the year remaining at £30m consistent with the first half of last year. Operating losses increased to £2.4m on the back of continued pressure on input prices and reduced demand particularly in quarter one of the year. Cash generation remains a focus for the company alongside managing levels of borrowing in the current higher interest rate environment. We therefore cannot commit to paying an interim dividend at this stage, but as is always the case the board keeps the matter under regular review and intends to return to paying dividends as soon as practicable. Although trading conditions continue to be uncertain. We are encouraged by the growth in new on-trade customer numbers, new listings in the off-trade and the performance of Ghost Ship 0.5%. Finally, our recent customer research gave an indication of a younger cohort of consumers discovering Adnams.” 

Fast food items will be banned from next month in new takeaway law: Takeaways will no longer be able to serve food with certain items including plastic cutlery and polystyrene cups from the start of next month. It comes as ministers hopes the move will help better protect the environment. The Press Association reports that fast food bosses will be stopped from serving items on single-use plastic materials including bowls from 1 October. The government says you can prepare your business for the new rules by using up existing stock before 1 October, finding re-usable alternatives to single-use items and using different materials for single-use items. If you continue to supply banned single-use plastics after 1 October, you could be fined. Local authorities will carry out inspections to make sure the rules are being followed. If you break the law, inspectors can order your business to cover the cost of the investigation. Environment secretary Thérèse Coffey said previously: “I am determined to drive forward action to tackle this issue head on. We’ve already taken major steps in recent years – but we know there is more to do, and we have again listened to the public’s calls. This new ban will have a huge impact to stop the pollution of billions of pieces of plastics and help to protect the natural environment for future generations.”

Tokyo Industries re-opens Liverpool’s iconic Arts Club: Aaron Mellor’s Tokyo industries reopened the Liverpool Arts club last weekend. Built in 1814 the Arts Club served as the Royal Institute of Arts & Literature being granted Royal Charter in 1821, at that time, one of the only Arts Institutes outside of London. Charles Dickens himself even lectured here during his time in Liverpool. Over the years the building has been a series of venues from Barfly, through to the Masque and most recently Mama Group and Academy Music Group, the venue mysteriously closed earlier this year leaving the city without one of its most loved Live Music Venues. The new version of Liverpool’s Arts Club will be operated by Tokyo Industries, the Manchester based team behind Gorilla, The Deaf Institute and Factory251, The Welly in Hull, Riverside and Digital in Newcastle and most recently Zumhof in Birmingham. It reopens with a 1,100-capacity with three live stages/club rooms (the theatre space at 550-capacity, the treehouse at 450 capacity and a new embryo stage at 100 capacity). Mellor, founder and managing director of Tokyo Industries, said: “Venues like the Arts Club are fundamental to a city’s cultural tapestry, without these grassroots music venues we don’t have our cities’ next emerging talent. It’s vital we keep these venues alive. Liverpool has a deep history in music and Liverpool needs to support and push its creative industries.” Aaron Mellor continues in assuring: “Venue wise we are preserving a lot of the building’s original character, whilst adding improved light and sound, better flow and circulation. A mix of big-name bookings and regular club nights. We relaunched with an epic double headline show from The Wombats – the band usually perform in huge arenas so it was great to see them in such an intimate homecoming setting.” Tokyo Industries was formed in 1997 by DJ and architect Aaron Mellor. It currently operates 47 clubs, music venues, hotels and restaurants in the UK and 16 sites Internationally in Los Angeles, Palm Springs, New York, Dubai, Croatia, Barcelona and Ibiza.

Tigers Woods teams up with Justin Timberlake to launch sports bar concept: Golfer Tigers Woods has teamed up with popstar Justin Timberlake to launch a new sports bar venture in the US, which they hope to roll out nationally and internationally. The 15-time major champion and the singer are opening T-Squared Social Club on East 42nd street in Manhattan, later today (20 September). The sports bar, with a title that’s a nod to Woods’ first name and Timberlake’s last, is 22,000 square feet and covers an entire city block. Woods and Timberlake are collaborating with Nexus Luxury Collection and 8AM Golf, the parent company of Golf Magazine, in the launch. T-Squared will feature four Full Swing golf simulators, more than 35 televisions, four dining areas and bowling lanes. “We knew a concept like T-Squared Social would thrive in New York,” said Timberlake. “It’s a beautiful space that transcends the typical sports bar experience. You can go to be entertained without sacrificing quality or comfort. We’re excited to be partnering with 8AM Golf on this incredible opportunity right in the heart of one of the greatest cities in the world.” Christopher Anand, chief executive and managing partner at NEXUS Luxury Collection, said: “The timing for our flagship location in Manhattan feels right, and we believe this concept can easily grow to other major cities around the world. While we’re laser-focused right now on our inaugural location, we can’t wait to see what the future of the business holds.” “We’ve partnered with Nexus, Justin and Tiger to create T-Squared Social, and we all bring different strengths to this business,” said Hoyt McGarity, president of 8AM Golf. “Our goal is to establish more T-Squared Socials in great locations across the United States and internationally.”

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