Holmes – we will come out of this a lot more purpose-driven business: Azzurri Group will come out of the crisis a more purposeful and value-driven business, chief executive Steve Holmes has said. Speaking at the Propel Multi Club conference, Holmes said the TowerBrook Capital-backed company’s online meetings had resulted in broader topics being discussed including around the environment, carbon reduction and mental health support, which he expects the company to invest more heavily on and move the agenda on. He said: “We’ve become a lot closer as a business, which is ironic as no one has been able to meet up. In times like this, you can’t over-communicate but you can under-communicate so we have been talking a lot to our teams. Borne out of the fact we are having a lot more conversations with everybody across the whole organisation, it feels a lot flatter than it was before and we are having real conversations with our people across all our brands about the things that really matter. When you have them face-to-face regularly, it seems easier to make a positive difference. There has been a real sense of community, the teams have rallied, supported each other, and supported local communities, fed the NHS and helped local charities, and it has been wonderful to see how many people have pulled together in that way. We want to capture that spirit and continue to build on that as the business reopens. Clearly, we will be serving people great food and will innovate around food and design and all those other bits and pieces, but I don’t want us to forget what we are doing it for and the greater good as well.” Propel Premium subscribers can now receive access to the video of the Propel Multi Club conference featuring Holmes and other industry leaders. They should email anne.steele@propelinfo.com to receive an access code to view the conference. An annual premium subscription costs £395 plus VAT for operators and £495 plus VAT for suppliers. To sign up, email anne.steele@propelinfo.com
Young’s expects to deliver positive cash flow by May if reopening schedule proceeds, updates on financing arrangements: Young’s, the Patrick Dardis-led pub company, has said it expects to deliver positive cash flow in May if the reopening schedule proceeds as planned. The company plans to reopen about 140 of its managed pubs with outdoor spaces on or around 12 April with the remainder following on or around 17 May as per the government’s reopening roadmap. Young’s has also updated on its finance arrangements. It stated: “The noteholders and the company’s banks have agreed to extend the company’s monthly available liquidity test up to and including March 2022, with a headroom requirement of £25m. The company will shortly be seeking an extension, through to November, of its £20m bilateral revolving credit facility with NatWest. In May, the company will repay the £30m borrowed through the Covid Corporate Financing Facility from existing facilities. On the basis of the above, the company will have committed available facilities of £255m (inclusive of the £25m required to meet the available liquidity test).” In view of the extensive period of closure of the company’s pubs in the current financial year and the expected lower levels of trade during the first three months of the new financial year starting on 30 March 2021, Young’s said it would not be paying any dividend for the current financial year. The company said it intends to resume dividend payments “as soon as is appropriate”. Young’s has, however, agreed with NatWest and the holders of its senior secured notes any dividend payments during FY2021-22 will not exceed £5m in aggregate, “but there is no restriction on the company recommending a final dividend with its results for FY2021-22, payable in the following financial year, as normal”.
Wilkinson – operating between 12 April and 17 May will be the biggest challenge for our front-line teams: Operating between 12 April and 17 May for the brand’s front-line teams will be the biggest challenge in terms of reopening, Simon Wilkinson, chief executive of Byron has said. From 12 April hospitality companies in England can trade from outdoor areas, with indoor hospitality reopening on 17 May, under restrictions. Talking at the Propel Multi Club conference, Wilkinson said: “We have been doing delivery across the majority of the estate throughout the lockdown. Even though that is with a reduced team, we have still been training and getting new initiatives ready to launch from April and May onwards. It is the third lockdown, so unfortunately, we have got quite used to closing and reopening – the team has become pretty adept at that. I’m fairly optimistic there will be a lot of pent-up demand. But I potentially see us being less efficient from 12 April to 17 May in terms of profit and loss than we have been up to 12 April, because you could have one day of great sunshine, then one day of rain, and you have to have a really flexible workforce who want to work with you and adapt to that. Also managing customer expectations – if they book a table and it rains you are then dealing with a situation that you have let people down. So, I think the operation between 12 April and 17 May for our front-line teams will be the biggest challenge in terms of reopening.” Wilkinson said the business, which was acquired via pre-pack administration by Calveton UK under newly formed company Famously Proper for £4m in August last year, had benefited from having time to reflect and pause over the past year. He added: “It’s allowed a lot of clarity and we’ve focused on things like technology and delivery. Our structure has also become flatter and without the pause and re-evaluation this would not have happened.” Propel Premium subscribers can now receive access to the video of the Propel Multi Club conference featuring Wilkinson and other industry leaders. They should email anne.steele@propelinfo.com to receive an access code to view the conference. An annual premium subscription costs £395 plus VAT for operators and £495 plus VAT for suppliers. To sign up, email anne.steele@propelinfo.com
Punch to invest £1m on outdoor spaces to prepare for April reopening: Punch is to invest £1m on supporting its pubs prepare for outdoor reopening in April. The company said Inside/Outside is an investment programme specifically designed to help its publicans to “maximise the opportunity of trading safely outside” while complying with government guidance. The company said the scheme will allow many pubs to open outdoors on 12 April, including plenty that previously would have not had the capacity. Punch said 662 of its sites (72%) in England are set to welcome guests back to their local next month. The group said: “Punch and their publicans have been working in tandem to create solutions from new furniture to stretch tents, festoon lighting, cosy huts, and all-important outdoor heating. The scheme has already seen hundreds of projects completed across the country, with many more currently underway.” Punch managing director Andy Spencer said: “It remains vitally important to remember pubs will be operating at a significantly reduced capacity. We need restrictions to continue to be relaxed during the reopening period to ensure the long-term survival of the British pub.”
PizzaExpress to open a third of its estate for outdoor dining: PizzaExpress will reopen a third of its restaurants for outdoor dining from 12 April. The David Campbell-led business said it is planning to open 118 of its sites in England, for what it is calling “Al Fresco April”. The circa 370-strong chain is yet to confirm when its restaurants in Wales, Scotland or Northern Ireland will welcome back customers. Zoe Bowley, managing director at PizzaExpress, said: “We’ve really missed buzz and bustle and seeing our customers enjoying their favourite pizza. Our cook at home range and click and collect and delivery services have been immensely popular during the past few months, but we can’t wait to fire up our ovens and swing open our doors again. Of course, we’re set to reopen all of our restaurants in England in May for both indoor and outdoor dining.”
KFC UK & Ireland expands Deliveroo partnership: KFC UK & Ireland has revealed a major expansion of its partnership with Deliveroo, with the launch of up to 200 new restaurants across the UK this year to the platform. The companies have also signed a new, multi-year partnership with exclusive offers only on Deliveroo. It comes following the the launch of KFC on Deliveroo at 130 sites in 2020. The expansion means KFC will be available to Deliveroo customers from a total of circa 330 sites, including in towns such as Corby, Dorchester and King’s Lynn. To mark the expansion, KFC and Deliveroo are re-running the 20% discount offer on “Wings Wednesday”, available to order from all restaurants via the Deliveroo platform. Stephen Goldstein, European vice-president of restaurants at Deliveroo, said: “We are proud, at this critical moment in KFC’s growth trajectory, it has chosen to expand with Deliveroo. We are honoured to be able to offer some amazing exclusive deals, such as the 20% off ‘Wings Wednesday’, and are excited to delight an ever-growing number of KFC’s fans across the UK in the year ahead.”
Wingstop eyes Manchester opening: Lemon Pepper Holdings, which is rolling out US chicken brand Wingstop across the UK, is in talks to open a site in Manchester, Propel understands. The company, which recently signed on five new sites, is believed to be in talks to take the former Bella Italia in the city’s Piccadilly Gardens. At the start of this month, Propel revealed Wingstop had agreed a “trilogy” deal with landlord Hammerson to open three new regional locations at its Bullring (Birmingham), the Oracle (Reading) and Cabot Circus (Bristol) schemes. Following the opening of its tenth UK location in Gloucester Road, South Kensington, late last year, Wingstop UK is now set to open sites in the former EAT at the Bullring, the former Chick-Fil-A at the Oracle, and the former Dorothy Perkins in Bristol’s Cabot Circus. With plans to reach 20 locations in the UK by the end of 2021, Wingstop is also set to open this year in Canary Wharf and Kingston-upon-Thames, where the brand will be occupying the former Pizza Hut. The brand, which operates more than 1,500 locations worldwide, is expected to announce further regional openings in the coming months.
JD Wetherspoon to reopen 60 Scottish pubs on 26 April: JD Wetherspoon is to reopen 60 of its 61 pubs in Scotland from 26 April. The only one not reopening is The Blacksmith’s Forge in Dalkbeith, Midlothian, which is closing permanently. In accordance with Scottish government rules, the reopened pubs will serve food and non-alcoholic drinks inside and will also be able to serve alcohol – without the requirement for a meal – in external areas. Wetherspoon will also open seven of its hotels within its pubs on the same date. They are the King’s Highway, Inverness; Saltoun Inn, Fraserburgh; Cross Keys, Peebles; White Lady, Corstorphine; Golden Acorn, Glenrothes; Guildhall and Linen Exchange, Dunfermline; and the Jollys Hotel, Broughty Ferry. Helen Dumbreck, Wetherspoon regional manager for Scotland, said: “We are looking forward to welcoming both customers and staff back to our pubs. Our pubs play an important part in the social life of their respective towns and cities and it is great news they will be able to reopen soon. Each of our pubs will observe all the necessary safety rules around covid-19.”
Ramsay lines up a second ex-Byron site for Street Burger opening: Chef Gordon Ramsay has lined up a second London-based ex-Byron site for his fledgling Street Burger concept. Propel understands the chef is to take the ex-Byron in Kensington High Street for an opening later this summer. As previously flagged up in Propel Premium, Ramsay has confirmed he had secured the ex-Byron site in London’s Charing Cross Road for an opening under the new burger concept, which he launched at the start of December last year in the One New Change development in St Paul’s. It is thought the chef is also in talks to take the ex-Gourmet Burger Kitchen site in Maiden Lane, Covent Garden, for another Street Burger site. Ramsay is also believed to have made the highest offer to take the former Giraffe site in The Oracle in Reading. Ramsay currently has 35 restaurants around the world and plans to open a fourth site under his Street Pizza concept at the Battersea Power Station development where Mother Pizza previously traded.
Cattle Grid founder secures former Foxlow in Chiswick site for next opening: Steve Novak, founder of steakhouse concept Cattle Grid, will add to his London estate of bars and restaurants with a new opening on the former Foxlow site in Chiswick. The new site in Barley Mow Passage will be called Betty, and according to Novak will be modelled on his Hannah bar in Lavender Hill, Battersea. Novak also operates wine bar Heidi in Balham, The Earlsfield in south west London, and The Charlotte in Southwark. He also operates the last remaining Cattle Grid site in Windsor.
Intermediate Capital Group acquires majority stake in bingo operator Buzz: Caledonia Investments has announced it has sold its majority shareholding in Nottingham-based bingo club operator Buzz Bingo to Intermediate Capital Group (ICG) for a nominal fee. ICG, which is already a long-term investor in Buzz, is injecting £18m into the business, which restructured via a company voluntary arrangement (CVA) last summer. Buzz, which rebranded from Gala Leisure in May 2018, said it had also managed to secure a new £10m credit facility from Barclays, which will support further investment into the company, including the growth of its online site. Caledonia Investments said its investment in Buzz was valued at nil as of 28 February 2021, compared with £22m as of 30 September last year. Buzz refinanced in the summer of 2020 via the aforementioned CVA, in which Caledonia injected £22m. The process saw the business close 26 bingo halls, leaving it with 91 sites. Buzz Bingo chief executive Chris Matthews said: “This agreement provides us with the financing we need to ensure our success when covid-19 restrictions ease. Prior to covid-19, we were in a strong position – and growing. But lockdowns meant we have only been able to fully trade for about six weeks since March 2020. The new funding ensures we will continue to thrive.”
Douglas Jack – SSP’s £475m rights issue is sensible strategy to reflect tough market backdrop: Peel Hunt leisure analyst Douglas Jack has argued the £475m rights issue by UK-based travel hub foodservice company SSP Group is a sensible strategy to reflect a tough market backdrop. Issuing a “Hold” note on the shares with a target price of 300p, Jack said: “The £475m rights issue should enable SSP to repay its £300m Covid Corporate Financing Facility in February 2022 and extend its bank facilities (from July 2022 to January 2024) with no increase in the cost of debt. Able to cover the company’s reasonable worst-case scenario, it could bring net debt/Ebitda to below 1.5 times in 2023E. Our revenue forecasts reflect SSP’s assumptions of passenger volumes being down circa 73% in 2021E, down circa 27% in 2022E and down circa 7% in 2023E, all versus 2019. By 2024, growth in leisure travel (60% of SSP’s business) is expected to broadly offset business travel not fully recovering. For 2021E and 2023E, our Ebitda downgrades assume a 25% drop-through from lower sales. We assume slightly faster expansion, but nothing significant, which leaves potential revenue upside for 2023E and beyond. Some recent cost savings should apply post-covid-19, possibly enabling 2019’s margin levels to be reached in 2024E despite rising costs in some parts of the world. Net debt should currently be close to £840m (pre-rights issue) by our estimates, with cash burn continuing at £25m to £30m per month. Revenue needs to improve beyond minus 50% (versus 2019) to stop the cash burn. Based on the new revenue projections, £300m of net debt versus £350m of Ebitda (IAS 17), providing £400m of headroom for expansion (based on two times net debt/Ebitda) is possible in 2024E. As expected, the international travel market is not recovering quickly, with the ongoing risk covid-free countries restrict in-bound travel. Also, there is a multitude of reasons why business travel may not fully recover. Against this backdrop, SSP is right to raise more equity. Although the shares may consolidate under current market conditions, the additional firepower could be the source of an attractive catalyst in due course.”
Wing Shack founder to launch pop-up store for yolk-based delivery concept:Josh Jarvis, founder of wings-based concept Wing Shack, is to open a pop-up store for his yolk-based delivery concept, Egg ’n’ Stuff. The outlet will open in Holloway Road, Islington, on Saturday (20 March). Jarvis initially developed the concept during lockdown last year initially launching on Deliveroo and the new pop-up store will be open for collection and delivery. The menu includes The Sausage, Egg and Cheese – British sausage patty, free-range Clarence Court egg, American cheese and house sauce served in a warm brioche bun; and The Hash Brown, Egg and Cheese – crispy fried hash brown, free-range Clarence Court egg, American cheese served in a warm brioche bun. Sides come in the form of salad, fries, slaw and hash browns. During the evenings, Wing Shack and its plant-based sister concept Vegan Shack will be available for delivery from the outlet.