Exclusive – Pizza Pilgrims appoints advisors as it looks to embark upon next phase of its development: Neapolitan pizzeria brand Pizza Pilgrims has appointed advisors as it looks to embark on its next stage of growth, which will include further expansion in the UK, exploring international opportunities, and the relaunch of its quick service restaurant (QSR) format Slice, Propel has learned. On the back of a strong year of trading and having received inbound interest, which led to “some exciting, unsolicited conversations with a number of parties – spanning trade operators, international hospitality partners, global food service providers and financial institutions”, Pizza Pilgrims, which was founded in 2012 by brothers Thom and James Elliot, has decided to appoint advisors at PwC to explore various future strategic and investment options, and evaluate growth opportunities. Building on a record year last year, the 23-strong company, which achieved B Corp certification in February, said that its current year is proving to be another period of strong growth in which the business is achieving a circa 14% increase in December 2024 run rate revenue of circa £39m and like-for-like growth of circa 8% between the 2023 and 2024 financial year. It said that its Ebitda margin at site level is more than 20%. The business – which the Elliots co-run with managing director Gavin Smith, and finance director Sophie Gilchriest – has opened sites in Leeds and London Euston this year, while also recently opening a debut site in Wales, in Cardiff. At least three further new sites are scheduled to open this financial year including two in London – in King’s Cross and Chelsea’s Kings Road – and an inaugural site in Scotland, in Edinburgh. The company, which typically opens four to six new sites each year, said it also has ambitions to take the “Pizza Pilgrims’ experience” overseas and is currently evaluating potential international destinations. After trialling its QSR format Slice on London’s South Bank during lockdown, the business, which serves between 40,000 to 50,000 pizzas per week in London and the UK, also plans to reignite its expansion. With that in mind, it is understood that discussions are currently underway with a large entertainment venue, regarding opening a site under the Slice format. Thom Elliot said: “Since the outset, our mantra has always been to build a sustainable business for the long term, making people happier one pizza at a time. We know we and the team have together built a great business and we’re really excited about the next leg of our journey and growing the business to bring the Pizza Pilgrims’ experience to more pizza-loving customers in new markets both at home and abroad. We’re looking forward to building on that momentum and leveraging some of the exciting opportunities ahead in the right way.” Pizza Pilgrims features in the Premium Club Turnover & Profits Blue Book, which is available exclusively to Premium Club members and features 994 companies. Pizza Pilgrims’ turnover of £28,707,541 for the year ending 25 June 2023 is the 346th 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.

Advertising, television and indeed the medical profession’s loss has been for the past 12 years the hospitality’s sector’s gain. It could have been the pub sector’s gain. When brothers Thom and James Elliot decided they wanted to leave their jobs in advertising and television, respectively, with parents who were publicans, they first thought about opening their own pub. But as Thom, who also applied to medical school, said earlier this year “we needed £250,000 to do that and we didn’t have it”. But like all good ideas, the move into the pizza making business was born in a pub in London’s Shepherd's Bush in summer 2011. Taking inspiration from the nascent street food movement, a Barclaycard with a £10,000 limit, the acquisition of a Piaggio Ape (tuk-tuk), which was used on a month-long “pilgrimage” driving around Italy researching pizzas, ingredients and flavours – the idea for Pizza Pilgrims was developed. A pizza oven installed in the vehicle and used as a market stall in London’s Berwick Street saw the business and its mission “to make the world a happier place, one pizza at a time” born. It is a mantra that continues to keep it in good stead.

The first bricks-and-mortar Pizza Pilgrims opened in Dean Street, Soho, in August 2013, after the brothers raised £250,000 by selling a 30% stake in the business to a group of 15 investors, including Rupert Clevely, who is James’ godfather, and the founder of Geronimo Inns. Clevely, who is still the company’s chairman, was joined by John Barnes, who built Harry Ramsden’s; Sean Williams, who was head of M&A at PWC Leisure; serial sector investor Ian Edward; and Warren Johnson, who founded W Communications. The brothers spent £150,000 to lease the site and £70,000 on the fit-out, with £30,000 left over for all the other costs. In 2017, they sold a stake to a firm that manages a private family’s wealth; which is now their biggest single investor. Four years later, they sold a further 8% stake to the sector investor Imbiba for £3.5m, as the business recovered from the impact of covid lockdowns. The brothers now own “just short” of majority ownership but have retained the deciding vote in board decisions. From turnover of £110,000 in 2013, the business has grown into a national presence with 23 sites, a run-rate revenue nearing £40m, a workforce of circa 500, and a reputation as one of the best businesses in the sector and one of the pizza category’s leaders. 

It is a business built on an obsession with sourcing the best ingredients to produce high-quality pizzas at affordable prices, and developing an award-winning people culture. It also benefited from the balance between the two brothers’ differing approaches, the more analytical Thom and the more hands-on, James. Talking to Thom this week, that obsession over every detail has not dimmed. He told me: “We’ve just upgraded our tomatoes at vast expense. We tasted 27 tomatoes, and they (the expensive ones) were the best ones, but it’s the right thing to do, to keep improving that quality.” The company is passionate about investing in the development of its teams and more than 150 team members have graduated from the group’s in-house Pizza Academy in London’s Camden since its inception in 2020. The work put in here plays a part in the strong retention levels the group achieves, with 62% of general managers and head chefs remaining with the business for at least two years. As Thom said: “We haven’t currently got any general manager gaps or head chef gaps.” It has a five-year club with 43 staff members in it, and a ten-year club with seven people. It also aims to appoint 65% of its managers through internal promotions.

The company was proud to receive the accolade of B Corp certification earlier this year, following a two-year qualification programme, making it one of only a handful of UK hospitality businesses to have received the third-party accreditation for its commitment to bringing benefit to shareholders, workers, customers and the planet and said this is now delivering clear commercial value. It says a lot about the business that it is also now looking to help other sector businesses make the same journey. Lockdown also challenged the group’s ability to innovate, with the launch of its successful Pizza at Home kits. Since the initiative's inception it has sold more than 300,000 of these kits. Including Deliveroo custom, eat-out sales now account for circa 21% of income, creating a growing incremental revenue stream for the business. Other innovation underway includes experiential onsite pizza-making masterclass events in one of the company’s pizzerias, exploring a potential pizza kiosk concept, as well as the opportunity of retailing grocery branded merchandise.

When it comes to its reach, the business has built on its foundations in the capital and continues to prove its credentials in the regions, a hiccup in Oxford aside. A debut in Wales was ticked off earlier this year, with a first site in Scotland to come before the current financial year is out. It is understood that the business has been offered what it describes as a “bold site” next year, one that could be equal to the sales from two or three other locations. It won’t put a figure on how many it could eventually open in the UK. Thom said: “It is about quality over quantity. It's about being ruthlessly selective and only picking the ones that are great. There's also so much upside to be had in reinvesting in our existing estate. This year, we spent £300,000 to £400,000 each on our Carnaby Street and Canary Wharf sites, and both are in high teens/low twenties growth. It seems to me that a lot of people are always focused on the new and not so focused on the original sites. It is so important for us to keep going back and making sure the experience at Dean Street is still a great one.” With minimal debt, new site expansion is almost entirely self-funded from free cash flow. The company says it achieves a strong return on capital employed of more than 80% across mature sites. 

Then there is a possible international play, one already being explored by rival Franco Manca, through franchising. Thom said: “I think there's an opportunity for us. I think we have a brand that is distinctive. I think it translates well. What we are doing is not over-complicated, so I think going abroad is something we are excited to do. I think it is more of a Europe conversation initially than somewhere further afield, but we get a lot of approaches from further afield. It's just about managing it in the right way. If we did go with a partner, we would put a hell of a lot of effort into making sure that they're the right partner and we're supporting them in the right way. But at what point does that effort not be better spent just doing it yourself?” 

There is also confidence that Slice, the group’s “Naples pizzeria meets New York slice” concept can still gain traction, after it was trialled during lockdown and briefly operated out of a site in London’s Finsbury Park, before being converted to its eponymous brand. Thom said: “The product was so good. It was designed for a different environment – either a smaller space, or one that has a smaller team. There are places we think it could work. I’m currently in Euston station for example and you could definitely see a Slice in that kind of location. We're talking to music venues and sports arenas, and I see that as a big opportunity for that format.”

With all of the above in mind – and trading since the start of the group’s current financial year from the start of July understood to be ahead of budget – you can understand why it received approaches, despite the challenging sector investment landscape. It was mooted that the business was linked to PizzaExpress at the turn of the year. Since then, it has had various inbound approaches – spanning trade operators, international hospitality partners, global food service providers and financial institutions. Private equity – aside from the likes of McWin and TriSpan – remains sceptical about the hospitality sector, but more would surely come out to play for a business with a strong consumer proposition and a sensible approach to expansion, not to mention a management team led by a sector rising star in Gavin Smith, which shares the Elliots' passion for the company's future. Then there are the trade players looking to evolve and add to their existing portfolios/platforms – Azzurri Group, The Restaurant Group, Big Table Group, Loungers and Cote, attracted by all of the above and the margins a pizza business invariably generates. 

As Thom puts it: “We have to keep getting more grown up. It is like the kids going to university, you are still involved but you have to increasingly let them make their own decisions and find their own way, which I am excited about. James and I aren’t going anywhere. We absolutely love it, and we are still emotional about the business, but sometimes that can hold you back rather than pushing it forward.” Or as James previously put it: “We worry about being founders who get in the way. We know when to step aside and let someone much better at that particular job take over.” A tribute to the way the brothers conduct themselves and the business they have built, there will be a lot of people across the sector hoping they get the result they deserve. When the right partner is found it should also mean that the brothers can focus further on making sure that the secret sauce the business is built on is not diluted. It is also a vote of confidence in the work being carried out by the management team led by Smith and finance director Sophie Gilchriest, who has been with the company for more than a decade. Here is a company that currently sits in that premium cadre of businesses that should with the right backing still be at the forefront of the sector in ten years’ time. Or as Thom’s favourite singer might put it, they are “pulling out of here to win”.