Goodbody – latest TRG action indicates group would now survive on existing facilities until year end in event of very prolonged shut-down: Goodbody leisure analyst Paul Ruddy has said the latest action by The Restaurant Group (TRG) indicates the group would now survive on existing facilities until the year end in the event of a very prolonged shut-down. Ruddy said: “As of year-end the group had cash net debt of £287m and more than £160m of cash and facilities. Working capital was made up of £188m of payables offset by £48m of receivables and prepayments. We would assume there was negligible cash burn in January and February so the group entered this crisis with good room in facilities. TRG set out a scenario at the end of March encompassing a ten-week shut-down in leisure before normalising in the second half, and a 92% decline in concessions with a recovery to minus 32% in the second half. In this scenario net debt would be in a range of £209 to £263m on an Ebitda range of £95m to £105m. It would retain £75m of cash liquidity throughout the remainder of the 2020 financial year. This assumed concession rents are turnover based and assumes a 50% reduction in its rent roll. Its latest update indicates the group will have a minimum of £90m of cash and facilities under its scenario. If the shut-down persists beyond its initial ten-week projection, the group highlighted monthly cash burn will be £15m and this should now be lower given government support for furloughed workers. This indicates the group would survive on existing facilities until year end, in the event of a very prolonged shut down. Overall, it is encouraging to see TRG’s lenders are being supportive. The group appears to be taking very swift and decisive action on costs with board changes and remuneration cuts providing further evidence of this. There was media speculation last week the group needed to do a rights issue. However, our view is the group is focused on getting costs under control and ensuring it has sufficient wiggle room in its existing debt facilities to survive for an extended period.”
McDonald’s seeing delivery grow about 20%: McDonald’s chief executive Chris Kempczinski has said its global $5bn delivery business is seeing a spike as restaurants across the US move to takeaway operations. In an interview with CNBC, Kempczinski said delivery was growing at about 20% and “through this crisis, we’re seeing our delivery sales become even more pronounced”. In China, where 95% of the company’s restaurants are open, Kempczinski said delivery growth has sustained post-crisis, which could be the trajectory for the US. Kempczinski said the company has had to close 50 of circa 14,000 restaurants in the US, mostly because they are part of a building or attraction that has shut. He added: “We are better set up than most to continue to operate in what is certainly a very trying time.” Giving further detail about the support the company was giving, Kempczinski said it was working with franchisees and lenders to restructure loan payments and getting payment extensions from suppliers. It’s also offering rent deferrals, which typically were a percentage of sales. “We’re all really chipping in and it’s incredibly important for us to keep our franchisees viable and open through all of this so they can serve the community,” he said.
Honest Burgers teams up with City Harvest: Active Partners-backed Honest Burgers has teamed up with City Harvest, a charity that distributes surplus food in London, to provide food for those facing poverty across the capital. Since closing its restaurants, Honest Burgers said it had decided to repurpose its “quality ingredients into delicious single serving meals to feed NHS workers on the front line”, and by joining forces with City Harvest it is able reach the vulnerable facing food poverty in London. At the same time, Bidfood has donated some ingredients to Honest Burgers. Tom Barton, co-founder of Honest Burgers, said: “About three weeks ago, with a heavy heart, we decided to close down our business while we fight through this pandemic. It just didn’t feel right to put so many of our teams in harm’s way. This then left us with lots of surplus food and we couldn’t let it go to waste. We set about turning our prep kitchen and butchery into a ready meal production line and have managed to cook up in excess of 5,000 meals with the same quality ingredients we use in our restaurants. City Harvest has been the link to getting these meals to people that need them. We need more charities/people businesses like City Harvest in tough times like these!” City Harvest chief operating officer Nikki Tadema added: “City Harvest is delighted to be working with Honest Burgers helping it distribute their meals to community groups and food banks that are getting them directly to those who cannot afford to eat.”
JD Wetherspoon boss criticises MP for inventing fictitious meeting: JD Wetherspoon chairman Tim Martin has criticised an MP who invented a story claiming he appeared before the Business Energy, Industry, Strategy committee, whose chair is Rachel Reeves, now shadow chancellor of the Duchy of Lancaster. As a result of the fictitious meeting in front of Reeves’ committee, Jo Stevens, MP for Cardiff Central, alleged on Twitter that Wetherspoon changed its policy towards paying staff during the coronavirus outbreak. Martin said: “These comments by Jo Stevens refer to a meeting that never happened. I never appeared in front of Rachel Reeves’ committee, as Stevens and Reeves both know. It’s also untrue to say Wetherspoon had decided ‘not to pay 43,000 staff while pubs are shut’. In a video recorded on Sunday, 22 March – less than two days after the pubs shut, and three days before Stevens comments, I said: ‘All our endeavours are going to be on trying to make sure you get your money and the pubs reopen.’ An email was sent with the video saying ‘all employees will be paid as normal on Friday, 27 March for all hours worked up to and including Sunday, 22 March.’ Stevens comments also appear on a BFAWU (a trade union) website, and so will inevitably mislead the public. MPs made it abundantly clear during the Leveson Inquiry journalists have a duty to correct misleading statements. Reeves and Stevens also have a duty to uphold these principles themselves.”
Tom Kerridge helps raise more than £100,000 for free meals: Michelin-starred chef Tom Kerridge has helped raise more than £100,000 to fund free meals for front line NHS workers and the vulnerable. The money will pay for 600 meals a day for six weeks for hospitals and those in need in the Buckinghamshire and Berkshire areas. The Meals From Marlow campaign – an initiative launched by Kerridge and a group of volunteers from Marlow – raised the money in 48 hours. Kerridge has provided kitchen facilities and supervision while chefs are donating their time and effort to produce the meals daily. The aim now is to raise more funds to expand to 1,000 meals a day for a longer period. Kerridge said: “I know the people of Marlow are a very generous group but I’m astonished by the speed and the level of kindness.” Kerridge runs the two-Michelin star restaurant The Hand and Flowers as well as pub The Coach in Marlow along with The Bull & Bear at the Stock Exchange Hotel in Manchester, which is operated by GG Hospitality.
Petersham Nurseries launches online grocery initiative: Richmond-based Petersham Nurseries has launched an online grocery initiative. Customers in parts of south west London are now able to order premium organic meat and fresh fruit and vegetables from the family farm, Haye Farm in Devon. There is also a selection of Italian cured meat and cheese and other dairy produce, as well as larder essentials such as dried beans, pulses and pasta, and drinks. Orders are for a minimum of £30 and are available for collection or delivery, with customers picking up provided with a two hour time-slot.
Kerb to broadcast industry workshops: Street food market operator Kerb has taken over its newly launched television platform to broadcast industry workshops, offering training and advice on running – and launching – a business in these challenging times. With sessions covering everything from recipe development to marketing, finances and how to get that first pitch, Kerb said it was “pulling out the stops with an expert team of industry insiders to deliver unparalleled insight into their experience”. The Kerb workshops have gone on to produce street food operators including Bleecker Burger, Club Mexicana and Biff’s Jack Shack. The workshops will be running online all week to “keep the wheels turning and allow current and aspiring street food vendors to grow their knowledge and insight from the comfort of their own homes”.