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Fri 10th May 2024 - Update: Punch Pubs and Gordon Ramsey Restaurants |
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Punch reports ‘encouraging’ trading with lfl profitability up, expects ex-Wear Inns portfolio to ‘positively contribute to Ebitda from acquisition’: Punch Pubs & Co, the Fortress Investment Group-backed business, has reported “encouraging” trading to date in its third quarter, (covering the eight weeks to 21 April 2024), with profitability ahead of the prior year. The Clive Chesser-led business, which Propel revealed last month had acquired 24 ex-Wear Inns sites, said it expects the portfolio to “positively contribute to Ebitda from acquisition”, and that it drew on its revolving credit facility for the for circa £17m acquisition. The group is financed through a £600m five-year secured loan and a £70m revolving credit facility agreement, and at the end of the second quarter, before the acquisition, it had £5.2m of cash balances and £45m remaining undrawn against the revolving credit facility. “Post the period end, the group acquired a portfolio of 24 managed pubs at a cost of c.£17m including SDLT and fees,” the group said in its trading update for the 28 weeks to 25 February 2024. “The acquisition has been funded from available cash resources and drawing on the revolving credit facility. The portfolio is predominantly freehold including one long leasehold and three short leasehold properties. Following completion, the pubs have all been converted to the leased and tenanted operating format with the expectation of converting approximately a third of the sites to the Management Partnerships division over the next 12 months. The portfolio is expected to positively contribute to Ebitda from acquisition and is forecast to enhance net leverage from the first full year of trading.” It reported a pre-tax profit for the period of £8.1m, compared to £2.9m in the 28 weeks to 26 February 2023. The group also said it expects to continue to benefit from inflation positively impacting Leased and Tenanted net income, together with the improving margins and the benefit of maturing sales and profitability in the pubs converted to the Management Partnership estate since August 2021. “As noted in previous reports, we have identified the next tranche of pubs to convert to the Management Partnership model, having identified a population of up to 70 pubs that would be suitable for conversion,” it said. “With conversion phased progressively over a three-year period. We are pleased with the strong returns on investment that we are seeing from past conversions and would expect to achieve similar returns on future conversions of between 20% and 30%.” For the 28 weeks to 25 February 2024, total revenue was £165.1m, compared to £158.1m in the prior year period of 28 weeks to 26 February 2023. All three divisions (Leased and Tenanted, Management Partnership and Laine) delivered like-for-like sales growth for the 28-week period when compared to the prior year. Underlying Ebitda for the pub estates (Management Partnership, Leased & Tenanted and Laine) before central costs increased by £6.5mi to £58.6mi, up 12%. Ebitda for the period was £42.3m (prior year 28 weeks: £37.5m) of which £43.2m was classed as underlying Ebitda (prior year 28 weeks: £38.9m). Underlying Ebitda for the 52 weeks to 25 February 2024 of £85.6m compares positively to the £76.0m of adjusted underlying Ebitda from the wider Punch group in the year to August 2019, being the most recent financial year prior to the covid pandemic. In the 28-week period, the group spent £13.3m (prior year 28 weeks: £16.7m) on expansionary and maintenance capital. Net proceeds from the sale of properties in the period was £6.8m (prior year 28 weeks: £2), at £1.6m above book value (prior year 28 weeks: £0.3m). After having realised £6.8m from property disposals in the period, property assets decreased by £0.2m in the period to £892.8 (13 August 2023: £893). The group said it benefits from operating a predominantly freehold estate, with 93% of the pub portfolio owned on a freehold or long leasehold (greater than 50 years remaining lease term) basis. It generated a net cash inflow from operating activities for the period of £43.3m (prior year 28 weeks: £35.2m). An interim dividend of £20.6m for the current financial year ending 11 August 2024 was paid in the period. This dividend represents the first such payment since the launch of the bond in May 2021. As at 25 February 2024, the group had £50.2 of available liquidity (13 August 2023: £60.3m), represented by £5.2m of cash and cash equivalents and £45m undrawn against the revolving credit facility.
Next edition of Propel Turnover & Profits Blue Book to be sent to Premium Club members today: The next edition of the Propel Turnover & Profits Blue Book will be sent to Premium Club members today (Friday, 10 May), at midday. The 912 companies in the database are turning over a total of £65.6bn. A total of 579 companies are making a profit while 333 are making a loss. The profit being made by sector companies is now outstripping losses by £1.68bn. The Blue Book shows the total profit of the 912 companies in the list is £4,005,581,244 and losses are £2,322,211,757. 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 also receive access to five other databases: the Multi-Site Database, produced in association with Virgate; 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 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 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.
Gordon Ramsey reveals revenues at his restaurant empire set to pass £100m this year following record underlying earnings: Gordon Ramsey has revealed that revenues at his restaurant empire are set to pass £100m this year. The company’s accounts for the year to 27 August 2023 show turnover at Gordon Ramsay Restaurants jumped by 21% to £95.6m, with underlying earnings reaching a record £8.3m, up from £6.2m the year before, reports The Times. It created 290 jobs during the year. The chef said it had been a “hard-fought year” but also a vibrant year. “It’s challenging out there and businesses are battling to stay afloat, rising costs, rent and food costs, multiple strikes. It’s a battle,” he said. However, people were still keen to go out for a meal and have a good time, and he believed that the industry had “never been so exciting”. He said that in the current year, the £100m sales barrier was almost certain to be breached. It comes after Ramsey yesterday announced it is opening new restaurants, bars and a culinary academy across the top floors of the 22 Bishopsgate building in the City of London. As revealed by Propel last October, the chef is set to open a site under his Asian-inspired Lucky Cat brand at the property, and a Bread Street Kitchen restaurant and bar. On top of this, on the 60th floor of the building there will be a 14-seat chef’s table run by the team from Ramsay's three-Michelin-starred Chelsea restaurant, Restaurant Gordon Ramsay. There will also be a Lucky Cat terrace bar on that top floor, with a late licence, opening till 3am. At the same time, the chef is opening a cookery school at 22 Bishopsgate – the Gordon Ramsay Academy, which is sponsored by the cookware brand HexClad, which will teach skills in “everything from pasta-making to mixology”. The 25,000 square-foot space, which is being led by the alternative investment specialist Axa IM Alts, is being as a “vertical village” with 100,000 square feet of amenity and social spaces, including an innovation hub, a wellbeing retreat and spa and a 1,500-space commuter park and cycle hub. It said the building was “designed to meet the changing needs of the modern occupier and embody the structural and cultural shifts in how people work and live”. Ramsay said the bar and restaurants would occupy floors 58 to 61, rising 269 metres above the ground on the highest floor. “This is more than just a new opening,” he said. “It’s a significant milestone for our business.” Gordon Ramsay Restaurants, which was founded in 1998, has 34 restaurants across the UK, another 30 in America and 22 in countries including Shanghai, South Korea, Malaysia, France, Dubai, Singapore and Thailand. Its 86 venues hold a total of eight Michelin stars.
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