Papa John’s CEO – we continue to be confident in long-term potential of the UK market: Rob Lynch, president and chief executive of Papa John’s, has said the business continues to be confident in the long-term potential of the UK market, and that its efforts to reposition its UK portfolio is paying dividends. Earlier this summer, the business announced a shift in its UK strategy with the acquisition of 91 sites previously operated by the M25 division of Drake Food Service International to form a portfolio of company-owned restaurants. It subsequently added a further 27 sites to its company-owned estate in the UK, bringing its total ownership to 118 restaurants. Lynch was speaking after the brand’s third quarter update, which showed that despite strong sales growth in North America, the company’s adjusted operating income was just in line with the third quarter last year due to the dilutive impact of its recently acquired restaurants in the UK. Lynch said: “Our efforts over the past year have also focused on repositioning our UK portfolio in a way that ensures our franchisees in the total market will drive healthy growth over the long-term. This has led to the rotation of some franchise entities to other more proven franchisees. These efforts are paying dividends, as we continue to see improved performance from these locations quarter-after-quarter. In June, we announced the purchase of a portfolio of franchise restaurants, with the goal helping to realign this market for long-term profitable growth. Although we expected and communicated that these stores would be dilutive to earnings during our first year of operations, they are slightly more dilutive than we anticipated, as evidenced in our third quarter results, and they will continue to be a drag on profits in the fourth quarter and into 2024. However, we anticipate sequential quarterly improvements in profitability, and we are making the necessary investments to improve their sales and profitability with a focus on labour optimisation, product innovation and e-commerce enhancements. We continue to be confident in the long-term potential of the UK market. We are also pleased to see our UK comps turn positive this quarter as we reposition this market and expect to see sequential improvement looking forward.” From a development perspective, the company expects to open between 245 to 260 net new units this year, which it said was strong growth, but below its prior guidance of 270 to 310 net new units. It said that this new range reflects a “higher degree of uncertainty in the Middle East, potential closures in the UK and a more cautious outlook in Asia for the remainder of the year”. Last month, Propel revealed Papa John’s UK & Ireland posted a pre-tax loss of £2,908,000 in the year ended 25 December 2022 (2021: £6,704,000) as it reported a 21.8% decline in like-for-like system sales during the period, which saw the exit of its second largest franchisee. Papa John’s features in the Propel Turnover & Profits Blue Book, the latest edition of which was sent to Premium subscribers on Friday (13 October). Its turnover of £95,149,000 for the year to 25 December 2022 is the 91st highest in the database. The Blue Book ranks companies by turnover, profit and profit conversion, listing directors’ earnings for the past five years. 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 kai.kirkman@propelinfo.com to upgrade your subscription.

Interest rates to remain high and may rise again as Middle East conflict creates energy prices risk: Interest rates will remain high for an “extended” period of time and may have to rise again, the Bank of England has warned. The Bank voted to hold interest rates at 5.25% as it warned that the war between Israel and Hamas could drive up energy prices again. It forecast that interest rates will not start falling until the summer. The Bank also suggested that there was a 50-50 chance that the economy could enter into a recession next year, reports The Times. Andrew Bailey, the Bank’s governor, said that there was “no room for complacency” and that the monetary policy committee, which sets interest rates, will be “watching closely to see if further rate increases are needed”. He added that “it’s much too early to be thinking about rate cuts”, indicating that they are more likely to rise than fall. He added: “Inflation is still too high. We will keep interest rates high enough for long enough to make sure we get inflation all the way back to the 2% target.” The Bank published projections showing that economic growth will flatline next year with 0% growth in 2024, down from a 0.5% increase predicted in August. Even in 2025, the economy is only predicted to grow by 0.25%. The monetary policy committee also warned that there were “upside risks to inflation from energy prices” from the conflict in the Middle East. “The events in the Middle East are tragic in terms of the human cost,” Bailey said. “We have to view it through the economic lens. It does create uncertainty, it does I think create a risk of higher energy prices. So far, I would say, that hasn’t happened and that’s obviously encouraging, but the risk remains.”

Removal men move in after Tramp closes, new owner understood to be ‘former bank credit analyst turned hospitality entrepreneur’: Removal men have been pictured emptying exclusive Mayfair club Tramp following the resignation of five key directors of its holding company. The legendary celebrity hangout opened in 1969, hosting the likes of Mick Jagger, Peter Sellers, Michael Caine and Richard Harris on its opening night. The playground for the rich, famous and royalty of more than 50 years now appears to have been secretly sold, reports the Daily Mail. The directors – including Guy Sangster, son of the late horse breeding tycoon Robert Sangster, and Kevin Doyle, who acquired the club for £4m in 1998 – resigned in unison from the holding company which now owns Tramp. Its new owner appears to be Luca Maggiora, who is described as a “former bank credit analyst turned leading hospitality entrepreneur”, reports the newspaper. But little is known about what Maggiora will do with his acquisition. A fashion show, which was to have been held there this week, appears to be the first casualty. “I got a call saying the club was sold and cancelling my event, unless I could pay £2,000 up front,” an organiser told the newspaper. “It’s very sad. I’ve had a great relationship with Tramp for years.” Calls to the club are being answered but only to confirm that Tramp is closed.

Dough&Co founders launch new tech business: Dough&Co founders Chris and Hollie Sharman have launched a new tech company to help streamline operations. They said CircleHRM has been designed to use technology to attract teams and manage staff, suppliers and payroll all in one place. Chris said: “I have tried many technologies over the years and became increasingly frustrated with what I felt were key elements missing. I decided to work with a team to build something to work for my 15 restaurant sites through the frustration and an ambition to save money on multiple softwares we and many other businesses in the industry used at the time. CircleHRM will help frustrated operations, frontline and C-level staff really understand the state of play in their business at any time.” A former Marco Pierre White chef, Chris Sharman founded woodfired pizza concept Dough &Co in 2018, operating initially out of a horsebox at events and festivals. Having opened his first restaurant in Sudbury that same year, he now operates sites across Suffolk, Essex, Norfolk, Hertfordshire and Northamptonshire. He is also the chief executive of Burger Amour, which has several locations in Norfolk and Essex.

Molson Coors raises full year underlying pre-tax growth guidance by 10%: Molson Coors has raised its full year underlying pre-tax growth guidance by an additional 10% since its previous guidance, from +23% to +26%, to now +32% to +36%. The company reported the change with its third quarter earnings results, noting that the change was driven “by a healthier US beer industry than previously anticipated, more robust brand volume performance, higher than expected pricing primarily in Canada” and “lower net interest expense due to higher cash balances generating increased interest income.” The company maintained its net sales growth guidance of high single digits but tightened it to “the high end of the range.” Molson Coors said it continues to benefit from Anheuser-Busch InBev’s (A-B) declines following a boycott of Bud Light in the US. Coors Light and Miller Lite are both up double-digits in the last four weeks in Circana-tracked off-premise channels and both are on track to “collectively deliver net sales revenue growth for the third straight year,” something that has not happened “since Miller and Coors came together in 2008,” chief executive Gavin Hattersley told investors. Coors Banquet volumes were also up nearly +30% in the quarter, while Keystone Light and Miller High Life also gained dollar and volume share, making Molson Coors the number one volume-share gainer in the US beer industry, Hattersley said.