Beds & Bars in ‘robust financial shape’ as it reports record turnover and Ebitda and returns to profit, ‘UK uncompetitive to invest in’: The pan-European hostel company Beds & Bars, led by Keith Knowles, has said it is in “robust financial shape” as it reported record Ebitda and turnover and a return to profit. But Knowles told Propel that business rates and the rate of VAT made the UK “uncompetitive to invest in” and said it was “sad” the government lacked the ambition of its European counterparts to be competitive. He said: “For example, we found a building in Vauxhall that could be 800-beds plus. As an office, business rates payable are £375,000. If we put our model in the same building, it’s £2.1m of VAT on bed and food income because of the 20% rate. The same site in Madrid would be the same property tax as other commercial buildings – 10% VAT rate on beds and food income. There’s also tax incentives to invest in Spain of no corporation tax for ten years. The UK government needs to wake up. But we have a vision and the ambition, along with the team to deliver it.” It comes as the group, which operate 4.500 beds in nine countries, reported revenue increased to £68,852,382 for the year ending 25 March 2023 compared with £29,868,256 the previous year. Of that figure, £22,822,794 came from the UK (2022: £14,060,380) and £46,029,588 from the rest of Europe (2022: £15,807,876). Ebitda was up to £10,083,898 from minus £234,747 the year before. The group posted a pre-tax profit of £5,615,036 compared with a loss of £4,996,667 the previous year. In his statement accompanying the accounts, Knowles stated: “2023 was a spectacular recovery year, but the build-up of debt incurred during the pandemic has to be repaid and the board is grateful to our sole UK bankers, HSBC, for its continued support and by agreeing more flexible loan covenants, which we continue to meet. Despite the best endeavours of the board, curtailed trading meant that combined losses of the pandemic years totalled £15.5m that were replaced with both bank and government-backed loans. But pent-up demand ensured a very quick recovery. We were able to react instantly to the increased demand because of decisions made during the pandemic to retain key personnel across the group while keeping our properties in good repair. We saw an immediate return to pre-covid levels of trade and as the year progressed, the relative weakness of the pound and euro made Europe a ‘go to’ destination for US travellers. Our cash reserves increased commensurately so we start the financial year to March 2024 in robust financial shape. Investment in our new unit in Vienna, opening in April 2022, has been a success with occupancy and net bed rates above forecasts. Our large integrated units – ie combined St Christophers Inns and Belushi's branded bars in London, Edinburgh and European capitals performed exceptionally – led by our accommodation revenue. The UK traditional units had challenges as food and beverage was particularly impacted by rail strikes, a change of office work patterns and work from home while competition for trained staff intensified. Management continues to invest in the existing portfolio and seeks opportunities to complement our existing city footprint and lo seek new sites in the major capital cities in Europe.” The business did not receive any government grants (2022: £4,439,170). No dividend was paid (2022: nil). Beds & Bars features in the Propel Turnover & Profits Blue Book. Its turnover of £68,852,382 is the 136th 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.

Starbucks’ largest UK franchisee reports record turnover of £83.5m, takes portfolio to 105 sites with four openings in a month: 23.5 Degrees, the UK’s largest Starbucks franchisee, has reported turnover increased to a record £83,539,389 for the year ending 31 August 2023 compared with £74,979,078 the year before. Pre-tax profit was down to £1,628,035 from £8,032,900 the previous year as costs increased by more than £7m. In December 2023, the business opened its 105th site, in St Hilary retail park in Basildon, Essex, which was its fourth new store in less than a month. In their report accompanying the accounts, the directors stated: “In the context of the wider inflationary environment, management chose not to fully pass on the large increases in cost of goods and energy to the group's customers, which dampened in-year profitability. Inflationary pressures have eased since the start of the new fiscal year (September 2023) and the group is already beginning to see a reduction in commodity prices, and has enjoyed the benefit of a better value new electricity contract from November 2023, which has halved the cost per kwH previously paid. In January 2023, the group settled the HSBC term loan and investors loan notes plus accrued interests from cash reserves.” A dividend of £1,662,653 was paid (2022: nil). 23.5 Degrees has long stated ambitions to triple its estate to 300 stores by 2027 and has said it has a strong pipeline of approved stores. The business currently has the rights to develop in Oxfordshire, Berkshire, Hampshire, Wiltshire, Cambridgeshire, Norfolk, Hertfordshire, Essex, Dorset, Norfolk, Suffolk, Nottinghamshire, Leicestershire, Staffordshire, Lancashire, Yorkshire, Cumbria and Northumberland.

Masala Zone owner sees turnover rise to £26.3m but remain below pre-covid levels: MW Eat, which is behind nine Indian restaurants including the Masala Zone chain, has reported turnover increased to £26,330,743 for the year ending 26 March 2023 compared with £17,189,742 the previous year. Revenue remained below the £27,958,564 reported for the year ending 31 March 2019 – the last full year before the covid pandemic. Pre-tax profit was up to £1,198,278 from £460,858 the year before (2019: profit of £3,955,479). In his report accompanying the accounts, chairman and co-owner Ranjit Mathrani stated: “In line with the vast majority of businesses in the hospitality sector in central London, the after effects of covid-19 in respect of staff shortages and the work-from-home culture, as well as energy price increases have had a significant impact on the company and resulted in the business being affected adversely in the financial year ending March 2023. However, we are significantly more profitable and cash flow positive than the previous year, and we are confident that we will have sufficient resources available to trade comfortably for the foreseeable future.” The business did not receive any government grants (2022: £659,495).

Manorview reports strong forward bookings for 2024 as it sees record turnover and profit: Scottish independent hotel group Manorview has said it has a strong forward bookings for 2024 as it reported record turnover and profit. Revenue increased to £23,539,137 for the year ending 31 March 2023 compared with £16,659,529 the previous year. Pre-tax profit at the 11-strong group was up to £1,958,027 from £1,509,889 the year before. In his report accompanying the accounts, founder Steve Graham stated: “It has been a very successful year of growth across many fronts where the team has shown great character and resilience navigating all the challenges of operating a hospitality business with significant headwinds. The company was delighted to add two new hotels to the Manorview stable with the acquisition of Brisbane House Hotel in Largs and The Bothwell Bridge Hotel in Bothwell. Investment plans are progressing for both properties with Brisbane House due to reopen with a full refurbishment in March 2024. Planning and building consents for Bothwell Bridge are due to be lodged in early 2024. Despite severe challenges to recruit particular roles, our overall performance around recruitment has been strong with relatively minor impact on business trading levels. The immediate future still has a degree of some uncertainty but as we move forward into 2024 there is a very positive outlook with a strong forward bookings pipeline, principally around wedding delivery. Recent acquisitions, property portfolio quality, our diverse offering and ongoing investments all contribute to the positive outlook.” A dividend of £1,263 was paid (2022: nil).