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Nightcap – trading expected to remain challenging until later in 2024 but believe hospitality has seen worst of the downturn: Nightcap – owner of the Cocktail Club, the Adventure Bar Group, Dirty Martini and the Barrio Familia group of 46 bars – has said trading is expected to remain challenging for the remainder of the financial year before seeing a gradual recovery later in 2024 with hospitality now “having seen the worse of the downturn”. The company stated: “As announced on 20 February 2024, trading since the start of 2024 has been challenging, in line with reports from across the hospitality sector; we expect this to continue until the end of FY2024. We then expect the start of a gradual recovery later on this year as lower inflation, lower energy costs, lower interest rates and higher disposable income begin to embed in the economy and improve the financial outlook for our customer base. The group is trading in line with market expectations.” It comes as Nightcap reported revenue increased 42.1% to £33.4m for the 26 weeks ending 31 December 2023 compared with £23.5m the previous year “driven by the acquisition of Dirty Martini, the successful collaboration with The Piano Works over the Christmas period and the maturing of sites opened in the previous year”. Adjusted Ebitda increased 5% to £2.1m from £2m the year before “despite the train strikes and higher than expected Dirty Martini integration costs”. Like-for-like sales fell 10.0% in the period, which the company said was largely due to the ongoing train strikes and the impact of the cost-of-living crisis. Pre-tax losses rose to £1.8m from £0.9m the year before. A total of 46 bars traded throughout the period following the acquisition of Dirty Martini at the end of the last financial year. As at 31 December 2023, the group had cash of £3.1m (excluding cash in transit) and total bank debt of £8.6m resulting in net debt of £5.6m (excluding IFRS 16 lease liabilities and convertible loan notes). Since the half year end, the group has extended the maturity date on the B convertible loan notes by a further 12 months to mature on 9 September 2026 (as announced on 20 February 2024) and has recently reset its banking covenants to more favourable terms. The Piano Works acquisition completed on 19 February 2024, “securing the Piano Works presence at our Covent Garden site, adding a new site at Farringdon and providing the opportunity for Nightcap to roll out The Piano Works concept further”. The company said the group will consider the opportunity for further roll outs of its brands “should compelling opportunities arise”. However, it said the short-term focus remains on “optimising existing brands and sites”. Chief executive Sarah Willingham said: “I am pleased that we continue to show great progress in building the UK’s leading bar group. Five acquisitions and 13 openings in just over three years is an incredible achievement. To deliver an increase in revenue of 42.1% and an increase in IAS 17 Adjusted Ebitda of 5% for the half year during such a tough period for the hospitality industry is down to the dedication of our incredible team. We set out to build a great business at the back end of covid and the economy has moved through several additional challenges from the energy crisis and rail strikes to interest rates, inflation and cost of living crisis – throwing just about everything at us. I believe this environment is where some of the best businesses are built. With a rapidly changing landscape away from nightclubs and sticky dancefloors to late night party bars which are safer, more flexible and more inclusive environments, I believe that no other bar group is as well positioned to take advantage than Nightcap with the brands and estate that we have acquired and built over the last three years. While we have entered the next stage of our development where we will start to enjoy the benefits of the scale we have built in a short time, I continue to see great opportunities for growth in the market. Our ambition to double the size of our estate in the medium term is achievable. We expect the second half of FY2024 to continue to be uncertain and challenging, but I believe hospitality has gone through the worst of this downturn with many economic indicators showing a likely recovery later on this year. In the meantime, we continue our focus on leading our sector in terms of quality, innovation and training. Our ambition to become a leading company from a digital perspective is gathering pace, with several new systems and integrations launching this quarter. These are all initiatives that will position Nightcap well for further acquisitions and organic roll-out of our leading brands when the market allows. I remain very excited about the future prospects for Nightcap and look forward to the next year of fun and hard work, surrounded by the most brilliant people, as our synergies bed in, the economy settles and we start to benefit from the successful integration of all of our businesses.”

Next Propel Multi-Site Database to be sent to Premium Club members on Thursday, 28 March, grows to 3,075 businesses: The next Propel Multi-Site Database of multi-site companies, produced in association with Virgate, will be sent to Premium Club members on Thursday, 28 March, at midday. The database has now grown to include 3,075 multi-site operators, which operate 72,186 sites. An additional 16 companies, which operate 492 sites between them, have been added. The database has been redesigned so Premium Club members are able to search the data segmented into key industry sectors. This new straightforward segmentation allows users to search quickly in key categories such as pubs and bars, cafe bakery, quick service restaurants, casual dining, fine dining, hotel and experiential leisure. Premium Club members also receive access to five other databases: the Turnover & Profits Blue Book, the New Openings Database, the UK Food and Beverage Franchisor Database, the UK Food and Beverage Franchisee Database and the Who's Who of UK Hospitality. Plus, all members will be offered a 20% discount on tickets to five Propel paid-for events – The Excellence in Pub Retailing Conference (14 May), Social Media for Profit (18 July), the Talent and Training Conference (1 October) and Restaurant Marketer and Innovator (two days in January 2025). Operators will also be able to send up to four members of staff to each of our four Multi-Club Conferences for free. Premium Club members receive their daily Propel Info newsletter 11 hours earlier than standard subscribers, at 7pm the evening before. They also receive videos of presentations at eight Propel conference events two weeks after they are held. This represents around 100 videos of industry insight over the course of the year. Premium Club members will be sent a dedicated monthly newsletter that will highlight key updates in the sector and direct subscribers to all the vital content their membership offers. Premium Club members also receive exclusive opinion columns every Friday at 5pm, which include the thoughts of Propel group editor Mark Wingett and a host of industry leaders from across the sector. A Premium Club subscription costs an annual sum of £495 plus VAT for operators and £595 plus VAT for suppliers. Companies can now have an unlimited number of people receive access to Premium Club for a year for £995 plus VAT – whether they are an operator or a supplier. Email kai.kirkman@propelinfo.com today to sign up.

Knoops CEO – no reason why the business can’t build a billion-dollar brand, secures first international partners and plans 300-strong UK estate: William Gordon-Harris, executive chairman and chief executive of luxury hot chocolate shop concept Knoops, has said there is “no reason why the business can’t build a billion-dollar brand” and has pushed the button on international expansion. The company, which has 17 shops in the UK, now has an eventual aim of up to 300 across Britain having previously targeted 200 sites here by 2027. Gordon-Harris is targeting 40 outlets by this time next year. Knoops, which started in the East Sussex town of Rye as an outlet “at the wrong end of the high street with absolutely no commercial impetus at all”, has again stated its ambition to have 3,000 shops globally by 2030. Gordon-Harris told The Times that Knoops has secured a partner in the Middle East and initiated discussions in the United States and China. Unusually for a rapid brand scale-up, Gordon-Harris and founder Jens Knoops are pursuing their expansionary ambitions by developing a wholly owned model rather than a franchise format, traditionally regarded as the optimum way to achieve rapid expansion. “We have so much support from capital providers and landlords, I don’t think it’s an impediment,” Gordon-Harris said. “We’re building a brand and creating a category rather than just maxing out the revenue per store.” The group has raised about £12m, including an £8.3m fundraising last November, but Gordon-Harris, who has invested some of his own money in the business, said that “at some point we will pivot to debt, though whether that is now or in 12 months I can’t say”. On average, Knoops shops produce revenue of about £650,000. Of that, roughly 90% is chocolate (with the rest made up of tea and coffee), but they sell almost as much iced chocolate and milkshakes as hot chocolate. By the end of this year, Gordon-Harris reckons that half the company’s revenue will be from home consumption. “The growth levels are absolutely enormous,” he said. “The Chinese partners we’re talking to at the moment scaled 3,000 to 4,000 units in one particular brand in 36 months. We set this up to scale. We’re an affordable luxury business but we are also a mass-market proposition. We’re a category killer. We have no competitors in the world that do what we do and I think that with the right ambition, combined with the right systems and people, I don’t believe there’s any way we can’t build a billion-dollar brand here.”

Only 81p per head spent on promoting tourism in UK: The government has been urged to take action to boost tourism as figures show only 81p per head of population is spent on marketing the UK overseas as a visitor destination. That compares with an average of £5.88 per head across nine other competing destinations, according to Tourism Alliance, an umbrella group for 70 industry bodies that benefit from overseas visitors. The industry body’s research looked at funding for VisitBritain, the UK’s national tourism agency, for international marketing and promotional activities compared with the funding provided for similar functions in France, Germany, Italy, Spain and further afield. Its research found the UK allocated an extra £1.6m per year to help tourism recover from the pandemic, compared with an average of £126m for competing destinations, reports The Times. VisitBritain’s funding before the pandemic was 26% lower than the average for other countries popular with tourists. The Tourism Alliance has calculated that the funding for VisitBritain must rise by at least £14m to £69m a year, with an additional recovery fund of £15m, to compete with international peers. The Tourism Alliance has proposed a number of policy measures to help revive the UK’s tourism sector in a report. The organisation has suggested simplifying the visa application process as visitors filling out the form must answer 87 questions and a further 17 questions if they are under 18 or applying from a country where they are not a national resident. Visitors filling out a Schengen visa application form to visit countries in the European Union must answer only 37 questions on a three-page form. The UK could also reduce the price for a five-year visa entry from £771 to £150 to bring the cost more in line with the United States charge of £135 for Chinese visitors seeking a ten-year visa. The Tourism Alliance’s other suggestions include an extension of passport-free travel schemes available for schoolchildren and working towards a “sustainable resolution” to strikes on the railway.

Nespresso makes return to UK cafe scene: Coffee capsule brand Nespresso is to open its first on-the-go coffee shop on Thursday (21 March) after a previous attempt was abandoned five years ago. The subsidiary of Nestlé, the world’s largest food company, is to launch its “Nespresso bar” concept in Old Broad Street, near Liverpool Street station in London. Anna Lundstrom, chief executive at Nespresso UK, told The Times the test would be the first in Europe but “ultimately we’d like to have different coffee bars across the city or nation”. She did not give an indication of the number of branches. Nespresso was founded in 1986 in Switzerland and sells coffee machines and capsules for home and professional use. The company has grown to more than 800 shops in 76 countries and employs about 13,000 people. Lundstrom said the company wanted to take advantage of the coffee boom in Britain. “While we’re focused on at-home coffee, on-the-go coffee is so big in British culture. There is a real cultural phenomenon around coffee shops and on-the-go coffee, [and] we wanted to participate,” she said. Nespresso opened two sit-down cafes in London, in the 100 Cheapside development near the Bank of England and in Soho, in 2016 and 2017. They followed the successful opening of its first café in Vienna, but it closed the spaces in 2019 to focus on its stores, or “boutiques” as they are known. There will be limited seating in its new bar as the space has been designed to be “in and out”. A hot latte will cost customers £4.15, which Nespresso said compared with £4.40 at Costa Coffee, £4.15 at Starbucks and £4.05 at Pret A Manger. “It’s truly a great moment to be in the coffee business in the UK,” Lundstrom said.