Next Who’s Who of UK Hospitality to feature more than 236,000 words of content: The next Who’s Who of UK Hospitality will feature more than 236,000 words of content when it is released to Premium Club members on Friday (24 May), at midday. The database now features 872 companies, and this month’s edition includes 11 new additions and 42 updated entries. The companies, listed in alphabetical order, will have their most recent results reported as well as broader information around Ebitda, plans and trading style available. The database merges Companies House information, interviews and other public information to provide an easy to reference and exhaustive guide to the sector. Premium Club members will also receive all the videos from this month’s Excellence in Pub & Bar Retailing Conference on Friday, 31 May at 9am. They will include Peter Borg-Neal, founder of the Oakman Group, talking about how to maintain the company’s award-winning standards against the backdrop of a volatile trading environment, his return as chief executive and how the sector must remain agile and respond quickly to the extraneous pressures it is facing. Meanwhile, Susan Chappell, divisional director at Mitchells & Butlers (M&B), who is responsible for the All Bar One, Browns, Nicholson’s and Castle estates, which have an annual turnover of £500m, highlights how M&B is evolving its business to stay abreast of trends in digital and premiumisation, and how its business transformational programme, Ignite, is delivering ongoing improvements. Premium Club members also receive access to five other databases: the Multi-Site Database, produced in association with Virgate; the New Openings Database; the Turnover & Profits Blue Book; the UK Food and Beverage Franchisor Database and the UK Food and Beverage Franchisee Database. All Premium Clubs members will be offered a 20% discount on tickets to Propel paid-for events including 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.

M&B reports all brands in like-for-like growth as it continues to outperform market, expects full-year results to be at top end of expectations, buys Pesto Restaurants: Mitchells & Butlers (M&B), the All Bar One, Toby Carvery and Harvester operator, has said it has continued to outperform the market with all its brands in like-for-like sales growth and expects full-year results to be at the top end of expectations. In May 2024, M&B completed the acquisition of Pesto Restaurants, which operates ten restaurants throughout the north west and Midlands and was owned by Neil and Sara Gatt. M&B stated: “The brand delivers an Italian tapas offer across its ten strong estate which, as with the Ego acquisition, helps us to further diversify and premiumise our brand portfolio. The consideration for the business will be determined over two payments and is partly contingent on its future performance but will be no more than £15m.” It comes as M&B reported like-for-like sales were up 7.0% for the 28 weeks ended 13 April 2024. For the four weeks since the period end the business delivered like-for-like sales growth of 5.3%. The company stated: “We entered the year having built up strong sales momentum, as we outperformed the sector, and with the expectation of margin enhancement as clear evidence emerged that cost inflation was abating. This progress has continued throughout the first half of the year. Sales growth has remained robust, now ahead of cost inflation, with every brand across the portfolio in like-for-like sales growth. Cost headwinds are anticipated to total circa £55m this financial year, slightly less than previously expected, with increases in labour costs due to the statutory national living wage rise mitigated by deflation in our energy costs and slowing food cost inflation. Coupled with a robust sales performance we believe this should allow us to continue to rebuild margins. We remain mindful of uncertainty and pressures on the consumer. However, as trading continues to be strong, we have confidence that the current year outturn will be at the top end of consensus expectations, with momentum for further progress going forward into FY 2025.” Total sales across the period were up 8.9% to £1.40bn (2023: £1.28bn), which the company said was driven by strong performances across all brands driven by increases in spend per head. Operating profit stood at £164m (2023: £99m). Profit before tax was up to £108m (2023: £40m). The company stated: “We made a good start to the year with like-for-like sales growth of 7.2% over the first seven weeks. Strong trading over the important festive period led to an acceleration of like-for-like sales growth over the latter half of the quarter to 8.2%, resulting in overall like-for-like sales growth for the quarter of 7.7%. Sales remained resilient through the second quarter with strong performances on key trading dates and particular resilience in food sales. Across the quarter, we recorded like-for-like sales growth of 6.1%, comprising drink sales growth of 5.3% and food sales growth of 6.6%. We have continued to consistently outperform the market, as represented by the CGA Business tracker, by over 2% like-for-like sales over the first half.” During the first half, M&B completed 85 investment projects comprising 78 remodels, four conversions and three acquisitions. The company stated: “We are continuing to see strong performances from our investment projects and remain focused on reestablishing the target seven-year investment cycle which was interrupted by covid-19.” Phil Urban, chief executive of M&B, said: “Continued like-for-like sales outperformance against the market coupled with easing inflationary costs and focus on efficiencies has resulted in very strong profit recovery for the period. We remain focused on our Ignite programme of initiatives and our successful capital investment programme, driving further cost efficiencies and increased sales. We have confidence that continued focus on effective delivery of our strategic priorities will generate further value from our enviable estate portfolio and customer offers, enabling us to build further momentum throughout the year, with a strong foundation for long term outperformance.”

 

Brunning & Price reports record turnover of £112.8m, posts loss after impairment charges of £11,4m: Brunning & Price, the pub operator owned by The Restaurant Group, has reported turnover increased to a record £112,844,000 for the year ending 1 January 2023 compared with £82,399,000 the previous year. Adjusted Ebitda was up slightly to £16,737,000 from £16,368,000 the year before. The business made a pre-tax loss of £877,000 compared with a profit of £16,738,000 the year before due to impairment charges of £11,410,000. The company stated: “Impairment has been recorded in a number of specific cash generating units, reflecting weaker trading In certain areas following the covid-19 pandemic. A total charge of £8,438,000 (2021: £1,132,000) was recognised of which £4,840,000 was recorded against trading property, plant and equipment and a further £3,598,000 against right of use assets. An amount of £828,000 impairment is also recognised on the Investment in Ribble Valley Inns.” At the end of the period, the group operated 55 pubs (2021: 54). In his report accompanying the accounts, director Mark Chambers stated: “Following on from the covid-19 pandemic, 2022 was a year that presented new challenges for the company, primarily in the form of significant inflationary pressures which have impacted the entire casual dining sector. The business delivered strong like-for-like sales growth and retained strong customer sentiment. The core drivers that generate this consistently strong performance are: attractive customer demographics; defensible, well-invested locations; and a localised business model with strong execution. However, the company also recognised exceptional impairment charges of £11,410,000 during the financial year (2021: £1,132,000).” No dividend was paid (2021: nil).

 

Majestic acquired Vagabond out of administration for £6.5m: Majestic, the UK’s largest specialist wine retailer, bought Vagabond Wines out of administration last month for a total consideration of £6.5m, Propel has learned. The deal, which saw £5.8m paid on completion, saved nine of the 12 wine bars from closure and 171 jobs. The sites in London’s Battersea Power Station, Charlotte Street, Fulham, Monument, Northcote Road, Paddington, Shoreditch and Victoria as well as its Birmingham outlet are included in the deal. Vagabond’s sites at Canary Wharf and its two sites at Gatwick Airport, are not part of the acquisition. Propel revealed in March that Vagabond had been put up for sale with Quantuma advising the business, with the performance of Vagabond understood to have come under increasing pressure over the past 12 months. The Fortress Investment Group-backed Majestic is understood to have fought off interest in Vagabond from investment firm Breal Group, with an offer believed to be considerably higher for the business. The administrators report stated: “The company’s financial difficulties started as a result of the covid-19 pandemic and the associated enforced closure of all sites. Turnover fell by 64% in the year ending March 2021 when compared to the prior year and as a result the business fell into arrears with HMRC and other suppliers. In addition, the company was required to service its legacy borrowing but also under the terms of the share issue the business was required to make payments to its investors. The business continued to grow over this period with turnover reaching £7.4m in the year ending March 2022, and £16m in the year ending March 2023, but the company continued to face difficulties with cash flow in view of its historic liabilities. Part of the reason for the increase in sales was the opening of a site at Heathrow Airport in May 2022. In the 11 months it was open in the year ending March 2023, receipts totalled £5m from the site, contributing a net profit of £444,000 to the Ebitda. As a result of the success of the Heathrow site, the company opened a further two sites at Gatwick Airport in May 2023. However, the Gatwick sites did not generate the same level of return as Heathrow, and in the 7 months to November 2023, the sites contributed a net loss of £136,000 to the Ebitda. In comparison, Heathrow in the same period contributed a net profit of £701,000 to the Ebitda. In late 2023, the landlord for the Heathrow site notified the company that due to necessary security works being carried out at the airport, the Heathrow site would be forced to close for an extended period. While the landlord made a capital contribution to the company by way of compensation, the loss of trade and associated positive contribution to Ebitda resulted in the business being unable to service its obligations. In particular, the company fell into arrears with HMRC and was not in a position to settle the balance due to HMRC in full. The company therefore instructed Quantuma in an advisory capacity in December 2023 to provide advice to the board in respect of its negotiations with HMRC and other key creditors to establish whether a solvent solution was available for the business. However, after these discussions failed to progress meaningfully, Quantuma was instructed in January 2024 to assist with a Company Voluntary Arrangement (CVA). On further review and analysis into the company’s financial position, it was apparent that a significant proportion of the company’s liabilities were either secured or preferential, and neither of these classes of creditors can be compromised in a CVA without express agreement from the creditors. Quantuma therefore entered into discussions with HMRC and it confirmed that it would shortly issue a winding up petition if a CVA was not progressed. The directors continued to review the company’s finances and cash flows but were unable to put forward a proposal for a CVA that was ultimately going to be agreeable with HMRC, given the time that had passed since the company first fell into arrears. Accordingly in March 2024, Quantuma was instructed to assist with an administration process. The strategy initially was to affect a pre-packaged administration sale; however after the initial marketing period was carried out by the appointed agents, it was apparent that there was wider interest for the business and assets that initially anticipated.” Majestic stated last month: “The partnership with Vagabond will further support Majestic’s growth strategy by building on its existing customer base and allowing it to engage with a younger demographic of wine consumers. Majestic plans to invest in the long-term future of the Vagabond business, with ambitions to open more wine bars, leverage Majestic’s CRM capability, and further develop both companies’ offerings of Wine and Spirit Education Trust qualifications for colleagues and customers.”

 

Nightcap launches £3.5m fundraise: Nightcap – owner of the Cocktail Club, the Adventure Bar Group, Dirty Martini and the Barrio Familia group of 46 bars – has launched a £3.5m fundraise, which it said will be used in part to take advantage of acquisition opportunities and strengthen the company’s balance sheet. The business said that it is proposing to raise up to £3.5m, before expenses, via the issue of up to 70,000,000 new ordinary shares of £0.01 each in the company at a price of five pence per New Ordinary Share. As part of the fundraising, the company has already raised £750,000, before expenses, through a firm subscription for 15,000,000 New Ordinary Shares at the Issue Price. The company said: “In addition to the subscription, the company has received further expressions of interest in participating in the fundraising and intends to continue its fundraising activities in the coming weeks. Further announcements will be made by the company in relation to this part of the fundraising in due course. In addition to the fundraising, the board will consider raising additional capital, subject to any future potential transactions. The board is grateful to investors for their support of its fundraisings over the past year and has received expressions of interest for significant further conditional investment support subject to the pricing, terms and conditions of future potential transactions.” The business said it is intended that the net proceeds of the fundraising (once completed) will be used: to take advantage of acquisition opportunities that the company expects to identify as a result of the structural changes taking place in the premium bar sector of the UK hospitality industry; to strengthen the company’s balance sheet; and for general working capital purposes. Sarah Willingham, chief executive of Nightcap, said: “We believe that a once in a generation opportunity currently exists in the late-night bar sector to create a substantial market leading group of the most popular and much-loved, late-night bar concepts. It was always our intention to position Nightcap as the preferred consolidator in the premium bar sector and with this Fundraising we intend to continue our efforts to create the UK’s leading bar group. A combination of businesses struggling with significant debt from the covid period, ongoing macro-economic challenges from the cost-of-living crisis, and rail strikes have all escalated and accelerated the opportunity for consolidation, as we see a number of companies from across the sector considering their future strategic options. It is core to our strategy to be present in the conversations that will shape the late-night bar sector in the UK as we approach the next economic cycle, with a more positive outlook on real wage growth, lower inflation, coupled with anticipated lower interest rates, which is expected to lead to an improvement in consumer confidence. Over the last 18 months, we have built a robust and professional management and leadership infrastructure at Nightcap and our team is capable of doubling the number of bars that it manages without the need for Nightcap to make significant further investment.”

 

FY losses at Adnams widen on back of cost increases, continuing to explore funding options: Suffolk brewer and retailer Adnams has reported a pre-tax loss of £4m (2022: £2.3m) in the year to 31 December 2023, due to the aggregate impact of cost increases. It said that sales increased 3% to £66.3m (2022: £64.2m) in the period, with stronger demand in on- and off-trade channels in the second half of year. Year-on-year beer volumes rose 3% in the second half of 2023 and 11% in first quarter 2024 trading. Operating losses widened to £2.5m (2022: £1.2m) due to higher costs, while it posted a positive Ebitda of £0.6m (2022: £2.0m). It said positive contributions had been made by every part of its business, particularly in the second half of the year when its off-trade business materially outperformed the market. The company said off-trade sales had increased 14% year-on-year supported by new national listings with several major retailers, wholesalers and pub companies, citing Ghost Ship 0.5% – now the UK’s number one low or no alcohol pale ale – as its best performer with volume and value growth of 12.4% and 15.6% respectively in the same period. The company said its full year loss had widened to £4m due to the aggregate impact of cost increases including interest, adding that falling inflation had eased some costs in the current year. It said this, together with the full-year impact of previously announced cost reduction measures and continued disciplined cost management, would support its profit improvement plans for the current year. In April this year, the company reported positive first quarter trading for the three months ending 31 March 2024, with total sales up 11% year-on-year, with a notably strong contribution from its on-trade business and contract distilling in its spirits business, which it said showed continued forward momentum. Andy Wood, chief executive of Adnams – who steps down from his role at the end of June to be replaced by Jenny Hanlon – said: “As we continue to pursue our strategy, it’s important that we leverage our distinctive strengths – as a heritage-rich, innovative company – to their fullest. The Adnams brand continues to hold significant equity and is championed and cherished by its customers. The coming months will see the company undergo further change as it is positioned for further growth. This change is likely to result in a simplified operating model that encompasses the things the business does well, whilst reducing its borrowings, susceptibility to economic shocks and building greater resilience.” The company also confirmed that it is continuing to explore a range of options to fund its future growth plans with the support of its advisors and has received an “encouraging response” to the process. It said its preferred option remains the raising of additional capital from another party and/or the sale of freehold assets to return capital to the company, however no decision has yet been taken. Chairman Jonathan Adnams, said: “Given the press speculation in February, I am acutely aware that such news would have been very troubling for shareholders. I would like to take this opportunity to reassure you that Adnams has a strong balance sheet, supportive banking partners, loyal customers and a team of people committed to resolving the current challenges the company faces. Whilst we have some further headroom in our financing arrangements, as we confirmed earlier this year, we are in active discussions to find a more permanent solution to our medium- and long-term financing arrangements, with the ambition of further strengthening our balance sheet and providing new capital to invest in our growth. This could lead to the disposal of some freehold assets as we seek to simplify and revise our operating model for the future. Discussions are ongoing and we will update shareholders at the earliest opportunity.”

 

Inflation falls to lowest level in almost three years: Falling gas and electricity prices has driven UK inflation to its lowest level in almost three years. Prices rose at 2.3% in the year to April, down from 3.2% the month before, the Office for National Statistics said. While inflation has fallen further, it still remains higher than the Bank of England’s target of 2%. But the bank has hinted that interest rates, which have been raised in recent years to slow price rises, could be cut this summer. Falling inflation also does not mean the prices of goods and services overall are coming down, it is just that they are rising at a slower pace.