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Young’s – Budget will cost us £11m annually but will try not to pass on all the costs, managed house lfl revenue up 6% in last eight weeks accelerating to 9.2% in last three: Young’s chief executive Simon Dodd has said he expects the Budget to cost the business an additional £11m annually but said it will try not to pass all the costs to its customers. “The new government’s budget will result in significant increased costs for our industry in the near term through rises in national minimum wage and employer’s NI payments,” he said. “We expect the cost impact to be approximately £11m on an annualised basis from next April. We will work to see how we can mitigate these headwinds without passing on all the cost to our loyal customers. We would like to see certainty and delivery of real business rate reform which will benefit all hospitality businesses.” Dodd also said like-for-like managed house revenue for the last eight weeks was ahead of last year by 6.0%, accelerating to 9.2% in the last three weeks, “demonstrating the benefit of the (rugby union) autumn internationals”. Dodd was speaking as Young’s reported half-year revenue growth of 27% to £250m in the 26 weeks to 30 September 2024, up from £196.5m in 2023. Adjusted Ebitda was up 23.2% to £59m, from £47.9m, with managed house Ebitda for the period up 25.1% to £73.8m. The company’s pre-tax profit was up 3.3% from £24.5m to £25.3m. It reported like-for-like revenue growth of 4.4% (5.2% excluding Easter impact), set against the challenging early spring and summer weather and supported by an “excellent” Euro 24 tournament. Adjusted operating profit was up £7.1m to £38.1, “driven by a sector leading margin of 15.2%, despite continued national living wage increases of almost 10%, utility costs and quarter one dual running costs from the City Pub Group acquisition”. There was £21.7m of investment in the period, including £19.4m invested in the existing Young’s estate, with a further £2.3m invested in the City Pub Group estate. The value of its freehold estate as at 1 April 2024 was £1bn. The company said healthy cash generation alongside the planned selective disposal of six pubs has reduced the year end net debt position by £12m to £255.8m (£346.5m including leases), with net debt to Ebitda at 2.6 times (3.4 times including leases), in line with its target post the City Pub Group acquisition. It said there has been a successful integration of City Pub Group into the Young’s estate, with head office synergies realised and further food and drink margin benefits “progressing in line with the acquisition plan”. Furthermore, it said Guinness volumes were up 29.7%, and that during the seven England Euro matches, it sold over 850,000 pints. Dodd added: “We’ve achieved a huge amount as a business in the last six months, reflected in another strong set of results. The City Pub Group integration has gone well, with the pub teams welcomed into the Young’s family and all operational control brought together under one leadership team. Our teams have done a fantastic job, and I’m looking forward to seeing our pubs thrive together. I am very pleased with our performance and the progress we have made during the period, which has been achieved despite some challenges. The weather was frustrating yet again, with a wet spring and limited periods of prolonged sunshine during the summer months, however Euro 24 and England’s successful run to the final, provided a welcome boost to drink sales with our pubs performing exceptionally well on match days. Given the quality of our estate and on-going strategy, we remain confident in our ability to deliver long-term growth, including achieving the planned synergies from the City Pub Group acquisition.”

Premium Club members to receive next Turnover & Profits Blue Book tomorrow featuring more than 1,000 companies, videos from Multi-Club Conference on 22 November: Premium Club members will receive the next Turnover & Profits Blue Book tomorrow (Friday, 15 November), at noon. The database will feature 114 updated accounts and 16 new companies, taking the total to 1,110. A total of 644 companies are making a profit while 376 are making a loss. The Blue Book is updated each month and ranks companies by turnover, profit and profit conversion, listing directors' earnings for the past five years. Premium Club members will also receive all the videos from the final Propel Multi-Club Conference of 2024 on Friday, 22 November, at 9am. They include Ben Lacey, managing director of Insomnia Cookies UK, who discusses the late-night bakery brand’s entry into the UK market, creating a highly engaged community on social media – especially with Generation Z consumers, and its ambition to build a nationwide presence. Meanwhile, Emma Bernardez, head of hospitality at haysmacintyre, talks to Lizzie Ryan, partner at Imbiba, Robin Rowland, partner at TriSpan, Andrew Fishwick, founder of Hestia, and Craig Rachel, director at AlixPartners, about the current investment market, where the buyer activity is centred and what is the current investment criteria in a volatile market. Premium Club members also receive access to five other databases: the Multi-Site Database, 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. All Premium Clubs members will be offered a 20% discount on tickets to Propel paid-for events including Restaurant Marketer and Innovator (two days in January 2025) and Excellence in Pub Retail (May 2025). Operators that are Premium Club members are also 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 supplier. Email kai.kirkman@propelinfo.com today to sign up.

Smaller pub and hostel operators plan to close sites, cancel expansion investments or divert spending internationally: Multiple smaller pub and hostel operators in the UK plan to close sites, cancel expansion investments or divert spending internationally after Rachel Reeves’ Budget left them facing higher employment costs. Wells & Co, a Bedford-based brewer and pub operator, has cancelled a planned takeover deal and now plans to shift its entire acquisition budget for new sites to the French side of its business, chief executive Peter Wells told the Financial Times. “We were working hard to bring an acquisition forward in the UK…with the bank being happy to help us up to £10m,” he said. But the deal was now “on hold”, along with a UK-wide hiring freeze for the next 12 months, following the Budget. The business, founded by his great-great-grandfather almost 150 years ago, has about £60m of revenues. Its 150 UK pubs account for 80% of its business, but the Budget measures would add an extra £700,000 on to its annual bills, slashing its profit by a fifth, Wells said. Following the Budget, Wells & Co has put in place a UK-wide hiring freeze for the next 12 months. Beds & Bars, a backpacker hostel group in the UK and six European countries including France and Spain, is set to shut down some of its bars and pubs attached to the hostels in the UK, chief executive Luke Knowles said. The company will also no longer push ahead with an expansion plan to add more beds to its UK properties, and instead allocate that money in the continental Europe. “Pre-Budget, we were already seeing better opportunities and better returns [in Europe],” said Knowles. “However, post-Budget, it now makes our businesses over here exceptionally marginal.” He estimated that the Budget measures would force the company to pay nearly £500,000 more a year, wiping off 25% off its core profitability. “The opportunities [in the UK] would be few and far between.” Meanwhile, Aim-listed hostel company Safestay said it was exploring moving half of its finance operations from London to Warsaw, where it has its group sales office. The operating cost would be half of what it was now in the UK, chair Larry Lipman said. The rise in employer’s NI contributions and minimum wage would “drive us to enhance further activity outside of the UK”, Lipman added.

Dishoom linked to Glasgow opening: Indian restaurant group Dishoom has been linked to a possible opening in Glasgow. Savills has submitted proposals to Glasgow City Council on behalf of AECR UK Investment I Limited to combine the ground floor and basement units at 3/11 Nelson Mandela Place within the former A-listed Glasgow Stock Exchange building. The planning documents suggest Dishoom are looking to open up in the property. Dishoom currently operates 13 sites in the UK, including one in Edinburgh. Earlier this month, the business said it had appointed advisors to help it secure new investment to aid a launch in the US, which could happen as early as next year. Propel understands that the business, which was founded in 2010, is working with Goldman Sachs. Co-founders Shamil and Kavi Thakrar said the process could see the business bring in an investor or partner to fund the move, and to also provide expertise and strategic counsel as it looks to enter the US market and continue its growth in the UK. The company will look to open a debut site in New York, where it recently had success with a ten-day pop-up in partnership with the Pastis restaurant in the city. The pop-up had 6,500 reservations that sold out in four minutes and a waiting list of over 20,000 people. Last month, the business, which recently opened its third Permit Room in Oxford, promoted Brian Trollip to chief executive. The company, which earlier this year launched the biggest shake-up of its menu since it opened its first site in Covent Garden 14 years ago, saw its revenue increase 23% last year to £117m. The group said it had continued to “perform well” since the year-end, delivering ongoing growth at both a revenue and underlying profit level.

Wetherspoon calls time on Spanish lager: JD Wetherspoon is calling time on Spanish lager in its pubs as it prepares to swap out San Miguel for an Italian alternative. The pub chain will no longer serve San Miguel once current stocks sell out, replacing it on draught later this month with Angelo Poretti, an Italian beer founded in 1877. Sir Tim Martin, the founder and chairman of JD Wetherspoon, said the decision to change supplier had come after “much thought”, with its long-running contract for San Miguel coming to an end, reports The Telegraph. He said: “Our relationships with beer suppliers are usually very long term. San Miguel and Birra Poretti are both excellent products, so these choices are not easy.” Wetherspoons said it would stock Angelo Poretti for the next ten years. It means the only Spanish branded beers sold by Wetherspoons will be bottles of Estrella Galicia and Madrí. Madrí Excepcional, which launched during the pandemic, recently surpassed £100m in annual sales in UK supermarkets. Bosses have claimed it is the most successful launch of a beer that the pub trade had seen in 16 years. Carlsberg, which owns Angelo Poretti, earlier this year said soaring demand for Madrí was denting its sales in the UK as it described the world beer market as a “fierce battleground”. Carlsberg also brews San Miguel for UK drinkers under a licence which has been in place since 2008. Rival Anheuser-Busch InBev is due to take over production of San Miguel for the UK market from next year.

Russian TV chef who ran central London restaurant found dead: A Russian TV chef who ran a restaurant in central London has been found dead in Serbia. Alexei Zimin was an outspoken critic of Russian President Vladimir Putin's invasion of Crimea in 2014 and had spent his final years exiled in the UK. Zimin was found dead in a hotel room in Belgrade, according to reports in Russian media, after having travelled to the Serbian capital to promote his new book about Britain. Serbian authorities told the BBC there were “no suspicious circumstances” related to his death and that an autopsy and toxicology report were ongoing. Zimin’s restaurant in London, Zima, confirmed the chef’s death on Instagram. “For us, Alexei was not only a colleague, he was our friend, a close person with whom we were lucky to go through a lot, both good, kind and sad,” the restaurant said. “The entire Zima team expresses condolences to Alexei’s family and mourns together with them.”

EG Group pays off hundreds of millions of pounds in debt in latest attempt to shore up its finances: Mohsin Issa’s EG Group has paid off hundreds of millions of pounds in debt in its latest attempt to shore up its finances. The petrol station empire said it had cleared its immediate debt obligations after selling off a string of forecourts and convenience stores, reports The Telegraph. EG Group’s forecourt operations include partnerships with brands such as Subway, Starbucks and KFC. This lates move includes a deal to offload the last remaining parts of its UK business to Zuber Issa, cementing a recent split with his brother Mohsin. EG is understood to have paid off hundreds of millions of pounds of debt in the last few months alone, which has resulted in rating agency Moody’s upgrading its outlook from negative to stable. The payments come after years of scrutiny regarding high levels of debt at EG Group, as Mohsin and Zuber used vast borrowings to build a global empire. The brothers turned EG into one of the world’s largest independent forecourt and convenience store chains, with thousands of sites across the US and Europe. However, surging interest rates have driven up the cost of its debt, which led to EG selling off large parts of the business. Last year, it sold off the majority of its UK petrol stations to Asda, another company bought by the Issa brothers. The move to break up EG Group has formed part of the brothers’ attempt to carve up their empire. Zuber said he in June was stepping down as co-chief executive of EG Group, leaving Mohsin to run the business alone. Zuber is now running the group of UK forecourts acquired from EG Group, where he remains a shareholder and non-executive board member.