PizzaExpress reports UK & Ireland lfls up 8.3% as group revenue increases to £454.6m: PizzaExpress has reported group revenue increased to £454,566,000 for the year ending 31 December 2023 compared with £422,057,000 the previous year. Of this, £411,769,000 came from the UK & Ireland (2022: £379,644,000) and £42,797,000 from international operations (2022: £42,413,000). Of the total revenue, £435,886,000 came from restaurant operations (2022: £405,609,00), £10,775,000 from merchandising (2022: £9,728,000), £5,818,000 from wholesale (2022: £4,779,000) and £2,087,000 from franchise income (2022: £1,941,000). Like-for-like sales were up 8.3% in the UK & Ireland and 8.6% internationally. Adjusted Ebitda was down to £52.3m (2022: £59.3m). UK & Ireland adjusted Ebitda fell to £50.8m compared with £57.2m the year before. The group made a pre-tax loss of £7,915,000 compared with a profit of £9,715,000 the year before. The losses were largely a result of footing an interest rate bill of £37,577,000 on £335,000,000 of loans that are due to be repaid in July 2026. The group also incurred exceptional losses of £6,524,000 (2022: £1,996,000). At the end of the period, the group had a total of 460 restaurants (2022: 454) with 358 of these in the UK & Ireland (2022: 362). During 2023, three new company-owned restaurants were opened – one in the UK, and in Hong Kong. The group closed five company-owned restaurants in the UK & Ireland, four in Hong Kong and three in the UAE. In its international franchise market, the company opened 19 new restaurants across Kuwait, India, Indonesia, and Macau and closed four restaurants across the Philippines and Indonesia. At the end of the period, the group operated 383 company-owned restaurants (2022: 392) and 77 franchise restaurants (2022: 62). In her report accompanying the accounts, chief executive Paula Mackenzie stated: “During 2023, our primary market of the UK & Ireland continued to experience strong macroeconomic headwinds. Trading has been challenging with continued consumer caution driven by stubbornly high inflation, rising interest rates and the 'cost-of-living crisis', coupled with cost inflation across food, labour and central costs. The focus has been on upweighting our customer offering through primary customer experience that includes brand, restaurant and food and drink appeal, across all parts of the service journey; together with managing the inflationary cost headwinds and optimising our operational model accordingly. This has involved investment across the business including in our loyalty scheme, our restaurants and our people. In Hong Kong, post-pandemic restrictions were eased and the borders with China reopened in February 2023. As a result, Hong Kong has experienced a significant net outflow of people, impacted by both higher than pre-pandemic outbound tourism and lower than pre-pandemic inbound tourism. This has resulted in a slower than anticipated post-pandemic recovery. In addition, extreme weather conditions over the autumn months, with a higher-than-average number of 'severe' and 'super' typhoons, further contributed to difficult trading conditions. In response, the focus in Hong Kong has been on execution of a turnaround plan, including central cost reduction and achieving lower food and labour costs, as the market begins to normalise post-pandemic. In the UAE the level of tourism continues to be strong with an increase in international visitors compared with 2022, aiding footfall at key retail and hospitality venues. Our strategy remains focused on our iconic brand and business, reaching full potential in existing markets across our restaurant, delivery and retail channels. The UK, with its strong national scale and reach, is expected to continue to be our key growth market, coupled with potential opportunities to expand globally with strong franchise partners. In November 2023, we achieved a milestone of 100 international sites. We are leveraging our key partnerships with Deliveroo, Just Eat and Uber Eats to grow our total brand reach and drive incremental sales. We have expanded ranges available to our retail customers, reinvigorating our chilled range and launching our frozen range in November 2023. In October 2023, we reached a milestone of two million PizzaExpress Club members, less than two years since the loyalty programme launch. We are continuing to invest in our existing UK restaurant estate with a substantial refurbishment programme that uplifts the customer experience across our pizzerias. In 2023, a further 70 sites underwent refurbishment, and this continues at pace into 2024.” The accounts revealed that loyalty club members are sitting on £11,303,000 of benefits (2022: £5,155,000) and customers have £2,473,000 of gift card benefits outstanding (2022: £2,280,000). As at 31 December 2023, the group's total net debt was £431.0m (2022: £437.6m). The group did not receive any government grants (2022: £1,850,000). No dividend was paid (2022: nil). PizzaExpress features in the Propel Turnover & Profits Blue Book, which is available exclusively to Premium Club members and features 958 companies. PizzaExpress’ turnover of £454,566,000 is the 29th highest in the database. 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.

Bill’s MD – Generation Z don’t want to talk to waiters: Generation Z diners do not want to speak to waiters in restaurants and would rather order and pay for food through an app, Tom James, managing director of Bill’s has said. He told The Sunday Telegraph that younger customers increasingly do not engage with waiters and would rather use their phones when dining out. He said: “I just think it’s how they’ve grown up. They communicate through their phones and their devices. There’s no question that you’ve got to then offer that functionality if the new modern guest – Generation Z – are going to be more comfortable ordering, rather than speaking to a stranger.” It comes as Bill’s rolls out a swathe of technological upgrades to its restaurants, including self-service kiosks and QR codes at tables in an attempt to modernise its restaurants and boost their appeal to Generation Z diners. James said in some sites, especially in central London, more than 50% of customers were already choosing to pay digitally. He said: “It goes against hospitality and, as a sort of old-school hospitality veteran, it’s different. But we have to adapt.” James said the self-service kiosks chosen by Bill’s were “much more subtle” than those found in fast food brands such as McDonald’s or KFC, and insisted Bill’s would not lose its focus on traditional hospitality. He said: “That personal interaction, that creating experience in a moment, is the single most important thing for us in the business. However, you have to offer the alternative now.” In a further effort to lure Generation Z to its sites, he said Bill’s had introduced a wider range of non-alcoholic drinks and cocktails to appeal to the growing trend for moderation among younger people, and revamped its tableware and menu to make them more social media-friendly. Bill’s has also begun using artificial intelligence chatbots instead of human staff to take reservations, which Mr James claimed had boosted reservation numbers in the last two years. James’ comments came after Propel revealed Bill’s is to return to the expansion trail with a new iteration of its restaurant format. Following the trial of two new cafe bar concepts earlier this year in Newbury and St Albans, the circa 45-strong company will open up two new sites before Christmas in Milton Keynes and Street in Somerset and is in the process of securing a pipeline of properties for 2025 and beyond. Bill’s also said sales increased 3.4% on a like-for-like basis in the first half of 2024 while Ebitda climbed a further 51% versus the same period in 2023.

Non-alcoholic Guinness ‘could end up outselling original’ as Diageo plans to sell it on draught across UK pubs: Non-alcoholic Guinness could one day be more popular than its traditional counterpart, the brand’s parent company Diageo has said. Anna MacDonald, marketing director at Diageo, has predicted the shift amid a surge in demand for alcohol-free beer among health-conscious younger drinkers. Guinness is already seeking to capitalise on the trend, having rolled out an alcohol-free version in Britain in 2021. When asked whether the alcohol-free alternative could overtake original Guinness, MacDonald told The Sunday Telegraph: “Honestly, I think it’s possible. Already the trend [for non-alcoholic beer] is accelerating more than we thought.” It comes after Diageo, which also owns Baileys, Johnnie Walker and Smirnoff, revealed last month that sales of Guinness 0.0 doubled in Europe over the 12 months to June. Its success has led to it becoming the UK’s best-selling non-alcoholic beer, while also accounting for around 3% of total Guinness sales around the world. MacDonald said continued success for Guinness 0.0 will depend on “how socialising will continue to evolve”, although recent figures demonstrate continued strong demand from teetotal Generation Z drinkers. Diageo is currently plotting an expansion across pubs in the UK that will see Guinness 0.0 sold on draught for the first time. The beer is currently available on draught in its native Ireland but it is still sold in cans across most UK pubs. The rapid growth in demand for Guinness 0.0 has meant Diageo has encountered supply chain constraints, MacDonald said, although investment has been pledged to tackle the problem. It comes amid a wider boom in sales of traditional Guinness, which has shed its reputation as a beer typically sought by older, predominantly male drinkers with more and more women drinking it. In May, Sir Tim Martin, chairman and founder of JD Wetherspoon, credited the popularity of Guinness with driving a surge in sales across his pubs.

Cineworld threatens to rip out seats if landlords reject rent cuts: Hedge fund owners of Cineworld have seized control of film projectors and even theatre seating in an attempt to strong-arm UK landlords into accepting steep cuts to rent. Cineworld is awaiting a High Court verdict this week on whether it can begin negotiations over a restructuring of its UK business. A clutch of local councils are among cinema owners facing heavy losses on taxpayer investments if Cineworld can impose new terms on its landlords. Cineworld, which operates across 128 sites in the UK and Ireland and employs 4,400 people, struck a deal with lenders last year to swap billions of pounds of debt for shares in the business. The names of the new shareholders have been closely guarded and are not even known by some advisers inside the deal. Cineworld announced in July that six of its sites would close after failing to find a buyer. It now says it cannot afford to pay its rent and wants to restructure its leases. Failure to do so will render the UK business insolvent, the company claims. Its US parent emerged from bankruptcy protection last year and has since “provided the group with liquidity and headroom in relation to its financial indebtedness”. The company’s UK operations have become dependent on funding from the US to pay landlords, many of which own properties that are “over rented”, it said. Under proposals to be put before a judge on Wednesday (28 August), six of Cineworld’s multiplexes would move to a “zero rent” agreement. A further ten would switch to turnover rents, receiving about 50p for every ticket sold. And rents at 33 other sites would be cut to “market levels” as deemed by Cineworld’s own advisers. Landlords are complaining that the proposed terms are actually below market rates and would allow the company’s hedge fund owners to benefit from a surge in profitability as a host of new releases, such as Paddington in Peru and Captain America: Brave New World, come out in early 2025. The last resort for landlords would typically be to take back their properties instead of agreeing to a restructuring. But Cineworld has the right to remove fixtures and fittings – including projectors, audio systems and seating – before they do so, making it difficult for landlords to quickly install their own operators to run the cinemas on their behalf. A spokeswoman for Cineworld told The Sunday Times: “In the event that a landlord chooses to take their property back, Cineworld will, of course, remove its own furniture, fittings and equipment.” The legal hearing this week is the first step in the restructuring process. Talks with each group of landlords will follow before a creditor vote in September. Cineworld has pledged to invest £35m in the business if landlords agree to the rent cuts, though sources close to the landlords pointed out that this would be only after property owners had forfeited tens of millions of pounds as a result of the restructuring.