Pizza Hut Restaurants UK operator in advanced talks with potential buyers: Pizza Hut's biggest UK franchisee is in advanced talks with potential buyers as it races to wrap up a deal to secure its future. Heart With Smart (HWS), which operates circa 140 restaurants, is aiming to select a preferred bidder in January after weeks of talks with suitors, reports Sky News. Sources close to the process said a range of trade and financial buyers had expressed interest in acquiring a large stake in HWS. In November, Sky News revealed that HWS had begun approaching potential bidders as it sought to mitigate the impact of tax hikes announced in the previous month's Budget. HWS is working with Interpath Advisory on the process. HWS, which was previously called Pizza Hut Restaurants, employs about 3,000 people. HWS is owned by a combination of Pricoa and the company's management, led by chief executive Jens Hofma. They led a management buyout reportedly worth £100m in 2018, with the business having previously been owned by private equity firm Rutland Partners. HWS licences the Pizza Hut name from Yum! Brands. Insiders told Sky News last month that the increases to the national living wage and employers' national insurance contributions unveiled in the Budget by chancellor Rachel Reeves would add approximately £4m to HWS’ annual costs – equivalent to more than half of last year's Ebitda. The structure of a takeover or capital injection was unclear on Monday (30 December). HWS operates all of Pizza Hut's dine-in restaurants in Britain, but has no involvement with its large number of delivery outlets, which are run by individual franchisees. Accounts filed at Companies House for HWS4 for the period from 5 December 2022 to 3 December 2023 show that it completed a restructuring of its debt under which its lenders agreed to suspend repayments of some of its borrowings until November next year. The terms of the same facilities were also extended to September 2027, while it also signed a new ten-year Pizza Hut franchise agreement with Yum! Brands, which expires in 2032. “While market conditions have improved noticeably since 2022, consumers remain challenged by higher-than-average levels of inflation, high mortgage costs and slow growth in the economy,” the accounts said. Pizza Hut opened its first UK restaurant in the early 1970s and expanded rapidly over the following 15 years. In 2020, the company announced that it was closing dozens of restaurants, with the loss of hundreds of jobs, through a company voluntary arrangement. At that time, it operated more than 240 sites across the UK. HWS declined to comment. Pizza Hut Restaurants UK features in the Premium Club Turnover & Profits Blue Book, which is available exclusively to Premium Club members and features 1,039 companies. Pizza Hut Restaurants UK’s turnover of £159,029,000 is the 75th 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.

Wingstop UK marks record year of expansion with final opening of 2024: Wingstop UK, which is being rolled out here by Lemon Pepper Holdings, has opened in London’s Walthamstow, marking the brand’s final opening of 2024. It marks a record year of expansion with 18 sites having launched in the past 12 months. Located in Hoe Street, the new 1,389 square-foot site host 27 covers and has created 64 jobs. The opening builds on Wingstop UK’s continued expansion in London, where it has 27 restaurants and delivery kitchens. This includes its largest site globally at Westfield Stratford City, which opened in July. Since launching in 2018, Wingstop UK has grown to 57 sites and created more than 2,500 jobs. 2024 has been a record year for Wingstop UK, having earned recognition for its sustained success, rapid growth and workplace culture. In June, it was named the fastest growing restaurant group by the Sunday Times 100 for the second year in a row and in March, it was ranked as the highest casual dining brand in the Financial Times’ FT 1000. Wingstop UK was also included in the Sunday Times Best Places to Work Awards. Chief executive Chris Sherriff said: “We're excited to expand our reach in London with this opening in Walthamstow. This marks our final opening of 2024 and the end of an incredible year, with 18 new sites launched across the UK. Looking ahead to 2025, our focus remains on growing sustainably with the agility to seize the right opportunities as they arise.” Last week, Propel revealed US private equity group Sixth Street has agreed to acquire Lemon Pepper Holdings for a price that is believed to be in excess of the previously reported £400m. The California-based Sixth Street, which also owns the American Wingstop franchisee Far West Services, came out ahead of rival investment firms KKR and TSG Consumer Partners, and Domino’s Pizza Group, in the race to become Wingstop UK’s majority shareholder, and support its continued growth.

Costa’s second largest UK franchisee puts expansion plans on hold in short term: Costa Coffee franchisee, Gerry’s Offshore, which operates 59 sites and is the brand’s second largest franchisee in the UK, has put growth plans on hold in the short term as it focuses on current operations. It comes as the group, which employs around 600 staff, reported turnover increased 26% to £19,239,174 for the year ending 30 June 2022 compared with £15,266,050 the previous year. Ebitda stood at minus £96,363 compared with minus £134,873 the previous year. Pre-tax losses narrowed to £1,045,217 from £1,462,490 the year before. In their report accompanying the accounts, the directors stated: “In light of the economic impacts, the company has restricted its growth in the year. Instead of opening new stores, the focus has been on current operations, aiming to maximise sales with minimum new employment opportunities due to a short-term halt in store acquisitions. The company will continue to review operations and invest to take advantage of growth opportunities, to build infrastructure to support long-term growth and improve the customer offering to retain the market position.” No dividend was paid (2021: £187,500).