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Morning Briefing for pub, restaurant and food wervice operators

Fri 9th May 2025 - Update: Punch Pubs, Papa John’s, RBI, Whitbread and Soho House
Punch Pubs reports strong current trading and expects Ebitda to rise above £100m in its current financial year: Punch Pubs has reported strong current trading and said it expects its Ebitda to rise above £100m in its current financial year. In a trading update for the 28 weeks ended 23 February 2025, giving an update an outlook and current trading, the company said: “Group profitability is expected to grow from the £94.8m of underlying Ebitda for the 12 months to 23 February 2025 to a pro forma run rate Ebitda of £111.0m, driven by: £3.7m run rate adjustment for acquisitions and disposals in the last 12 months; £3.8m L&T to MP conversions; £2.0m run rate adjustment for enhancing investments completed in the last 12 months; £0.6m benefit from pubs transferred into the bondholder group and other adjustments; £3.4m from annual drinks price increases implemented on 14 April 2025 net of product cost increases; and £2.8m of additional cost savings identified in collaboration with Deloitte. Quarter three trading to date (8 weeks to 20 April 2025) has been strong, with Ebitda 10% ahead of the same period in 2024 (up £1.4m).” The company said for the 28 weeks to 23 February 2025, total revenue was £168.3m compared to £165.1m in the prior year period of 28 weeks to 25 February 2024. All three divisions delivered like-for-like underlying Ebitda growth for the 28-week period when compared to the prior year. Underlying Ebitda for the pub estates before central costs increased by £3.2m to £61.8m. Ebitda for the period was £45.9m (prior year 28 weeks: £42.3m), of which £46.9m was classed as underlying Ebitda (prior year 28 weeks: £43.2m). The company said underlying Ebitda for the 52 weeks to 23 February 2025 of £94.8m 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. It said this “strong profit growth” stems from: “Growth in our like-for-like estate driven by inflationary price increases and trade enhancing capex investment; maturing profits from pubs converted from L&T to MP; opportunistic acquisitions of single sites and small pub portfolios with 56 acquisitions completed since August 2022; and optimising our cost base as we implement the £5.1m cost saving plan identified in partnership with Deloitte.” The company’s pre-tax profit of £10.6m for the 28 weeks to 23 February 2025 became a £36.3m loss following £46.9m in underlying items. This was mainly down to a £43.8m loss in movement in valuation of properties. This compares to a £7.7m profit in the 28 weeks to 25 February 2024, and a £8.1m profit after underlying items. The company said: “After having realised £7.7m from property disposals in the period, property assets increased by £76.2m in the period to £992.0m (11 August 2024: £915.8m). A full estate property valuation was recently completed by Savills. The impact of the revaluation in the current period is to increase the net book value of property, plant and equipment by £63.5m (£43.8m being charged to operating profit and a £107.3m credit recognised in the statement of other comprehensive income). The current net book value of properties at £992.0m compares favourably to the full estate property valuation undertaken in May 2021 at £849.7m.” In the 28-week period, the group spent £12.5m on the acquisition of 20 pubs. The group has also spent £17.3m (prior year 28 weeks: £13.3m) on expansionary and maintenance capital. It said: “Over the 12 months to 23 February 2025, we have converted (or are on-site for investment in) 18 pubs to management partnerships and have identified, costed and fully appraised the next 37 pubs for conversion over the next 12 months to February 2026. Net proceeds from the sale of properties in the period was £7.7m (prior year 28 weeks: £6.8m), at £0.9m above book value (prior year 28 weeks: £1.6m).” The group generated a net cash inflow from operating activities for the period of £44.0m (prior year 28 weeks: £43.3m). At the 23 February 2025 period end date, the group had £74.0m of available financial resources (11 August 2024: £66.5m), represented by £3.7m of cash and cash equivalents, £37.0m undrawn against the revolving credit facility and £33.3m from 49 freehold pub acquisitions funded from cash reserves and drawing on the revolving credit facility. In addition, £2.6m of cash held in deposit accounts is classified within prepayments(11 August 2024: £2.6m).

Premium Club subscribers to receive next Turnover & Profits Blue Book today: Premium Club subscribers will receive the next Turnover & Profits Blue Book today (Friday, 9 May), at noon. The database will feature 67 updated accounts and 14 new companies, taking the total to 1,109. A total of 704 companies are making a profit while 405 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 subscribers 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 Club subscribers will be offered a 20% discount on tickets to Propel paid-for events including Excellence in Pub Retail this month and discounts on specialist sector reports. Operators that are Premium Club subscribers are also able to send up to four members of staff to each of our four Multi-Club Conferences for free. Premium Club subscribers 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 subscribers 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 subscribers 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.

Papa John’s CEO – sales accelerating in the UK, market consolidation happening across the globe: Todd Penegor, chief executive of Papa John’s, has said that the company is seeing accelerating sales growth in the UK, with the brand in the middle of its international transformation strategy. Speaking after the brand’s first quarter update, Penegor was asked about some of the drivers behind the group’s international momentum. He said: “We are in the middle of an international transformation, and we’ve been pleased with the initial results. But I still say we’re in the early innings. We’ve laid out what our focus countries are. When I take a step back and look at them, the vast majority of those markets are growing mid-single digits or double digits at this point in time. Specific to the UK, we’re up 1% in Q1, and we’re accelerating quarter-to-date in Q2. We’re seeing a couple of things play out. One, we've accelerated our pace of innovation in those markets and are being really thoughtful about how we roll out innovation over time. We’re going back and taking a hard look to make sure that we’re executing on our quality proposition as great as we can. And I think the third thing is there’s a little bit of shake out or market consolidation happening across the globe in the pizza category, we’re seeing that we are gaining share and gaining transactions through that. So, we’ve been pleased with the performance, particularly in our core focus countries in Latin America, in the UK, in Spain and Middle East and a number of the countries in the Middle East were already back to like pre-conflict levels, and we’re excited about the growth opportunity that we have in front of us.”

Restaurant Brands International CEO – solid growth in the UK, Burger King continuing to take market share: Josh Kobza, chief executive of Restaurant Brands International (RBI), the owner of Burger King, Popeyes and Tim Hortons, has said that its brands saw solid growth in the first quarter of 2025, with the former continuing to take market share in the UK. Talking about the performance of its international operations after RBI had given its first quarter update, Kobza said: “We’re pleased with our relative performance this quarter, delivering 2.6% comparable sales or roughly 3.7%, excluding the headwind from Leap Day and 8.6% system-wide sales growth. We saw solid growth in many of our largest markets, including the UK, Germany, Brazil, Japan and Australia. These markets share a few common traits, compelling everyday value, exciting menu innovation, modern restaurant image, strong digital capabilities and a focus on restaurant level execution. In the UK, Burger King continued to take share through growing delivery, expanded core value platforms like the £4.99 King Box and premium innovation with products like the Memphis barbecue King double.”

Whitbread to name Severn Trent’s Hodgson as new chair: The chair of Severn Trent, the FTSE-100 water company, is to add to her portfolio of directorships by taking the helm of Whitbread. Sky News reports that Christine Hodgson has been selected as the preferred candidate to replace Adam Crozier as Whitbread’s chairman. City sources said her appointment could be announced as early as next week. Hodgson is said to have seen off competition for the post from Andrew Martin, chair of the testing and inspection group Intertek. Crozier, who has chaired the leisure group since 2018, is expected to step down later this year. Hodgson served on the board of Ladbrokes Coral Group until 2017. Under Crozier’s stewardship, Whitbread has been radically reshaped, selling its Costa Coffee subsidiary to The Coca-Cola Company in 2019 for nearly £4bn. It said last year that it sees potential to grow its Premier Inn network from 86,000 UK bedrooms to 125,000 over the next decade or so. The company has also been exploring the sale of some of its pub and restaurant operations. Whitbread declined to comment.

Soho House confirms October opening for Manchester site: Members’ club group Soho House has confirmed its Manchester venue will now open in October. The company announced last year that it was having to put back its opening again after “unforeseen building delays”, saying it would instead open in early 2025. The venue had initially been scheduled to open in late 2022 but the project was delayed when its builders, AJ Constructions, entered administration and ceased trading. Memberships for the venue were first opened in June 2023, with the plan at that stage for Soho House Manchester to open by the end of 2023. But members already paying their £1,925-a-year subs were contacted by email yesterday (Thursday, 8 May) with the latest update. The email, seen by the Manchester Evening News, says: “We are excited to announce that Soho House Manchester will be opening in October this year.” Members who have been paying their fees since June 2023 have been able to accrue the money paid as credits to use once the venue opens. But the email also confirms that “the accrual of membership credits will now come to an end”. Soho House will take over five floors of the former Granada Studios building, while another five floors of the vast space will become a Mollie's Hotel. There will be a gym with studio space for classes, a steam room and sauna that will open on to a balcony. An outdoor rooftop pool will have sunbeds and a pool bar, while a spiral staircase connects to the ninth floor, where a late-night bar and live music space will overlook the pool. On the eighth floor will be a casual lounge area for food and drinks, and a members’ restaurant for more formal dining, while on the seventh floor there will be a flexible events space with a large central bar and DJ booth. Soho House Manchester will also offer 23 bedrooms on the sixth floor, which will range from cosy rooms to large suites, plus a vast two-bedroom private apartment.

After-work drinks in decline outside London, peers told: Home working appears to have led to a bigger decline in after-work drinking in city centres outside London, a Lords committee has heard. Urban economist Paul Swinney told peers that pub spending data suggested that in the capital, post-work drinks have switched from Friday to Thursday. But a similar shift could not be seen in other large British cities, he added, where spending in bars was more likely to shift into the weekend. He also added that a decline in city-centre spending had not been matched by a similar increase for high streets outside urban centres, reports the BBC. Swinney, director of the Centre for Cities think tank, was among various experts giving evidence to a special House of Lords committee set up earlier this year to examine the impact of remote and hybrid working in the UK. The think tank recently published research on the pre and post-pandemic spending patterns of city-centre workers in pubs and bars around their places of work, by comparing credit and debit card data from 2019 and 2024. The analysis showed that during that period, the share of weekly spending in pubs in central London on Fridays fell, while on Thursdays it rose, making it the most popular night of the week. But a similar pattern was not seen in the data for nine other large British cities, including Glasgow, Liverpool, Bristol, Newcastle and Sheffield. Surveys have shown Friday has become the most popular day for office workers to work from home, with attendance during the middle of the week returning to more similar levels to before the Covid pandemic. Explaining the spending data to peers yesterday (Thursday, 8 May), Swinney said that in London “the Friday night drink hasn’t so much gone away, it’s just shifted to a Thursday”. He added: “But when we looked at other large cities, that wasn't the case. It appeared from the data that we have that the post-work drink has reduced in those other places. Actually, the shift seems to go into the weekend, which seems to be workers coming in from a leisure perspective, rather than going out after work.” The data analysed by the Centre for Cities showed that 32% of weekly pub spending in big cities outside London now takes place on a Saturday, suggesting workers are more likely to return on weekends to socialise than in the capital.

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