Wagamama to expand delivery kitchen estate in London: Wagamama, The Restaurant Group (TRG)-owned brand, is to extend its delivery kitchen estate in London, with two further sites, Propel has learned. The Emma Woods-led business will open new delivery kitchens in Walthamstow and Forest Hill, the latter of which launches next week. They will join the brand’s existing delivery kitchens in the capital in Balham, Peckham, Hackney and Bow. Wagamama also operates a delivery kitchen in Leeds. In April, TRG said the five Wagamama delivery kitchens currently in operation generated £225,000 average outlet Ebitda with over 75% return on invested capital. It said that given this track record, the company’s long-term ambitions for the brand include significant measured roll-out potential to expand both in the UK to a targeted circa 180 to 200 restaurants (from 144 today) and circa 20 to 30 delivery kitchens. In an update on Tuesday (25 May), TRG said: “Wagamama (for the circa 130 sites open in this period) traded at circa 85% of comparable 2019 sales levels, representing a circa 15% outperformance of the market reflecting ongoing strong delivery volumes and good trading from outdoor space in many locations.”
Parogon reports like-for-like turnover up 54% on pre-pandemic levels in reopening week, launches and looks to expand new Mediterranean-inspired restaurant concept: Staffordshire-based Parogon Group has reported a 54% like-for-like increase in turnover, excluding new site openings, for the first week of full reopening against 2019 levels. The company said bookings, until the end of June, suggested this period would follow the same trading pattern. Meanwhile, Parogon has launched its eighth site – Willow, which is a new Mediterranean-inspired concept that the company is seeking to expand. The all-day venue has launched in Trentham Shopping Village in the premises previously occupied by The Restaurant Group-owned Joe’s Kitchen. Parogon Group has traditionally operated large destination gastropub venues but Willow is a purpose-built compact restaurant. Managing director Richard Colclough said he believed the concept will suit edge-of-town retail parks and affluent high street locations. He said: “We are actively seeking restaurant sites throughout the Midlands that would suit our Willow concept. This new string to our bow will allow us to expand more rapidly by opening up the number of venues we can target.” He added: “We’re delighted our guests have returned so quickly and in such numbers. During lockdown, we have made a huge investment in staff training and technology to ensure we were prepared to accept all the trade that was available. The teams have come back to work with an appetite for success, only matched by our guests’ appetite for our food.” The company has a ninth freehold site, The Broughton, near Crewe, which is being refurbished and is scheduled to open in September.
Mosaic acquires first site in 18 months with freehold of Chingford pub previously let to Greene King: Mosaic Pub and Dining, led by James Watson and Peter McDonald, has acquired the freehold of The Larkshall in Chingford for an undisclosed sum. Until recently, it was let to brewer and retailer Greene King. The site is set to reopen in July following a refurbishment. The Larkshall Road pub was converted from a farmhouse in the 1980s and is believed to date, in parts, to the 16th century. It is thought to have been substantially extended in the 19th century and features bar and dining areas, a large car park and beer garden. Simon Bland, senior associate at Fleurets, brokered the deal. Watson told Propel: “It is great to be able to add our first new site for 18 months. The Larkshall has enormous potential. It is a lovely site set in a traditional suburban heartland and will fit very well into our estate, while Fleurets has been great to work with as always.” Mosaic Pub and Dining Group operates circa 30 sites. Last month, City Pub Group expanded its stake in the Mosaic group of companies to 24%.
Ramsay secures ex-GBK site for Covent Garden opening: Chef Gordon Ramsay is to bring his Street Burger concept to London’s Covent Garden. Propel has learned Ramsay has secured the former GBK site in Maiden Lane for an opening under the fledgling concept. Propel revealed last week the chef was in talks to take the former Byron site in Upper Street, Islington, as he looks to open another ten sites in the UK by this summer, with “dozens” of locations under review. Last week, he opened a Street Burger on the former Byron site in Kensington High Street, west London. It became the fourth site to open under the burger brand, following openings in St Paul’s, Charing Cross Road (ex-Byron) and Woking. Ramsay is also believed to have made the highest offer to take the former Giraffe site in The Oracle in Reading. Earlier this month, Propel revealed Gordon Ramsay Restaurants had appointed Antony Perring, formerly of Leon and Wagamama, as its new chief financial officer. On the expansion plans, Perring said: “Our planned new restaurant openings will enable the business to accelerate its growth, boosting employment in the sector and advancing existing and new landlord relationships.” CDG Leisure is understood to have acted for the landlord on the Maiden Lane deal.
Restaurant inspired by ‘trapbox’ trend to open first permanent restaurant, eyes ten UK sites before growing internationally: 202 Kitchen, a restaurant concept inspired by the “trapbox” trend is to open its first permanent site, in Manchester, and is eyeing ten outlets across the UK before growing internationally. 202 Kitchen is the brainchild of Leon Beckford, who launched the concept in Birmingham based on serving comforting soul food piled up in a metal box. Trapbox began life with amateur cooks creating cultural dishes that were packed into a box and showcased on social media, with some selling it to their followers. Inspired by the trend, Beckford wanted to bring it to life with professional chefs alongside a cocktail menu while creating a “social media-friendly atmosphere” and has hosted pop-ups in Birmingham and Manchester over the past two years. Now 202 Kitchen is opening a 6,000 square foot eatery in Manchester’s Spinningfields, and has launched a UK-wide search for sites in regional cities. Advised by KLM Retail, 202 Kitchen is looking for minimum 3,000 square foot properties in key regional locations, to meet demand from an incredibly fast growing and wide-ranging customer base. Oli Marcroft, associate partner at KLM Retail, said: “In addition to Spinningfields, we have also secured sites in Birmingham and Newcastle and are in active discussions on sites in Cardiff, Edinburgh, Leeds and in Essex. The brand’s vision is to secure ten UK stores, before growing internationally.” Metis advised CBRE, the landlord at Spinningfields.
McDonald’s shuffles UK executive team: McDonald’s has shuffled its UK executive team, Propel has learned. Jason Clark has left his position as chief operations officer of the UK business to move to the US having been appointed field vice-president in its Atlanta field office. As a result, Gareth Pearson has moved from his role as chief people officer to replace Clark, and will be responsible for the restaurant and franchised operations. Meanwhile James Thorne, who was previously director of education, learning and development, has been appointed to the role of vice-president people and has joined the executive team.
Douglas Jack – The Restaurant Group should now be generating positive cash flow: Peel Hunt leisure analyst Douglas Jack has said he believes The Restaurant Group (TRG) is now generating positive cash flow. Issuing an “Add” note on TRG’s shares with a target price of 135p following the company’s trading update, Jack said: “Delivery from half the estate (circa 200 sites) surged during lockdown, prior to the resumption of outdoor dining on 12 April, led by Wagamama, which experienced a three times increase in delivery sales (versus pre-covid-19 levels). From a tiny base, leisure delivery sales had a 5.5 times increase. A total of 315 (80% of circa 400) sites reopened to outdoor dining after 12 April with 130 Wagamama sites and circa 75 pubs both had sales at circa 85% of comparable 2019 levels, a circa 15% outperformance over the market. Its Leisure division traded at 60% of 2019 levels, helped by higher delivery volumes. We believe by the week before 17 May, the company was close to reaching no cash burn. About 350 (90% of estate) sites are now trading. This includes seven Wagamama and 16 sites in its Leisure division, which resumed indoor dining in Scotland in late April; in the three weeks to 16 May, these sites traded at more than 20% ahead of comparable 2019 sales levels. Overall, the group should now be generating positive cash flow, which should increase as restrictions are relaxed. Net debt, at almost £250m, is in line. It was circa £400m in February, since when there has been cash burn and a £175m (gross) equity fundraising. In comparison, the company has £450m of debt facilities, which should be ample. Interest cost guidance is in line, but with a £330m term loan facility replacing the Wagamama bonds, the company now has the flexibility to prepay a significant proportion of debt without penalty. We are holding our forecasts at this early stage of the year, with some uncertainty remaining on timing of the lifting of all government restrictions. TRG should have lost circa £20m in Ebitda (on an IAS 17 basis) between January and April. Our full-year forecast of £42m assumes almost £8m of Ebitda per month for the rest of the year (versus £12m per month in 2023E) despite the benefit of VAT cut and business rates holiday. In this, we assume the majority of concession sites remain closed for much of the second half.”
Holiday park operator Lifestyle Homes Group secures £100m lending facility and five sites as it aims to build £250m portfolio: Holiday park operator Lifestyle Homes Group has secured a £100m lending facility and acquired five sites as part of its plans to build a £250m portfolio. The company has expanded its footprint by adding venues in Suffolk, Berkshire, Gloucestershire, Devon and Cornwall, for £15.5m. These join the company’s original portfolio of five sites in County Down in Northern Ireland, which group director Adrian Gleave purchased for £16.5m in March 2019. The group is now eyeing a further six acquisitions within the coming months, with the aim of building a £250m portfolio within five years. Gleave said: “After acquiring the Lifestyle Homes Group and investing in the initial five parks in Northern Ireland, I really got into the heart of the business and based myself and my family there. I could see the potential in a well-managed, higher-end holiday and residential parks company rolling out across the UK. During the first lockdown, I set about pitching to investment firms in order to further grow the group. I identified the market comprised of a small number of large group operators alongside many independent holiday parks. There was an obvious opportunity for a quality medium-tiered company to gain traction within the market.” The £100m loan facility was provided by a pan-European, independent investment firm, which invests in European asset-backed special opportunities. Lifestyle Homes Group was advised by Zenzic Partners (financial) and Birketts (legal).
Afrikana makes London debut, lines up four further openings: Afrikana, the Midlands-based African restaurant concept, has opened its debut site in London, in Dalston. The business, which was established in the small Midlands town of Aldridge in 2018, by entrepreneur Omair Ali, has opened its seventh site in total, in Kingsland High Street. At the same time, the business has a further four sites lined up, in Leicester, Nottingham, Stoke-on-Trent and StarCity, Birmingham. Afrikana offers an array of food with an African twist, along with African culture, music and art as part of the experience. Ali felt there was a gap in the hospitality market for an African-inspired restaurant offering “high-end quality food, infused with beautiful African flavours”. In 2019, the original Aldridge restaurant was joined by three more locations. According to an Afrikana spokesman, the brand had another good year in 2020, despite the coronavirus pandemic, opening branches in Blackburn and Cardiff.
London-based arcade bar concept Four Quarters to open third site at Elephant Park: London-based arcade bar concept Four Quarters is to open its third site – and largest to date – at the Elephant Park development. Edition Capital-backed Four Quarters was established in 2014 with the first bar opening in Peckham, and it has since launched a second unit in Hackney Wick. The concept has taken a 3,268 square foot unit in Ash Avenue, Elephant Park’s emerging food and beverage, lifestyle and leisure precinct. Set to open in August, the site will offer more than 30 original arcade games, from the early 1980s up to the 2000s, including Street Fighter II, Pac Man and Space Invaders. There will also be eight vintage console booths and two large screen projection gaming areas, and even video game screens built into the walls that can be played from booths outside. The site will also include a bar and kitchen, serving diner-style classics. Four Quarters co-founder Marc Jones said: “Four Quarters brings the nostalgia of arcade gaming with a selection of locally sourced craft beer and bespoke cocktails, something we are certain Elephant & Castle’s new and existing community will adore – exactly the kind of fun we all need, given the year we’ve all had.” Guy Thomas, head of place assets at Lendlease, which is behind the £2.5m Elephant Park development alongside Southwark Council added: “Four Quarters will pick up on the growing demand for competitive socialising concepts, while tapping into the sense of nostalgia that appeals to all generations.” Nash Bond, CF Commercial and Shelley Sandzer represented Lendlease.
HSBC – Mitchells & Butlers is poised for recovery and could benefit from a circa £100m pension windfall: HSBC analyst Joseph Thomas said Mitchells & Butlers (M&B) is poised for recovery and there is a chance it could benefit from a circa £100m pension windfall if it wins a court case that is expected to take place this summer. Thomas said: “Management is clearly heartened by the steady easing of restrictions achieved so far and expects sales to get close to their pre-covid-19 level by the start of FY22. We have trimmed our revenue forecasts slightly given continued concerns around the full easing of social distancing restrictions, but we don’t see an impact on FY23, which we use for our valuation. Labour shortages are an issue and M&B acknowledges this. However, it doesn’t seem to have been a problem so far. Wage pressures haven’t grown much, but it’s something to be mindful of as M&B builds to full capacity, even among units currently open. Management talks of post-pandemic trading reverting to the historic pattern of growing sales by enough to offset wage pressure (protecting profits, but with a declining margin). However, we’d be hopeful that it could do better than this, delivering some profit growth. While management won’t be drawn on average spend/pricing metrics so far, visibility should be forthcoming in the summer. The first priority will be to resume the capex programme, with units reverting to a six to seven-year investment cycle. Beyond this, management says it may use its balance sheet to take advantage of growth opportunities as and when they open up. In addition, there’s a chance M&B could benefit from a circa £100m pension windfall if it wins a court case expected this summer. If so, it could bring an early end to the circa £50m of pension top-up payments that it makes each year, or at least a reduction. Between FY21 and FY23, the group could de-gear by close to £400m (circa 65p per share). There’s a good argument that the shares could re-rate to reflect the better operating environment. The shares currently trade on circa 12 times lease-adjusted EV/EBIT. We believe this could be circa 10.8 times within three years.”
The Hoxton to open five new European hotels: The Hoxton, the hotel brand owned by investment company Ennismore Capital, is to open five new European hotels, including one in its home city of London. The company will open sites in Barcelona, Berlin, Brussels, Vienna and in London’s Shepherd’s Bush during the course of 2022 and 2023. The first opening will be Barcelona next spring with a 240-bedroom hotel that will have a ground-floor restaurant, bar and terrace, a shaded rooftop taqueria and pool. It will be located in the Poblenou neighbourhood of the city. It will be followed by a launch in Berlin in the summer of 2022, with the hotel in Charlottenburg in the west of the German capital. The hotel will have 239 bedrooms, bar and restaurant. The company will also open a site in Brussels next summer. The 198-bedroom property, which will be in the former European headquarters of IBM, will feature a bar and restaurant, and a rooftop bar and terrace. The building will also be home to Working From_, The Hoxton’s co-working brand that currently has locations in London’s Southwark and Chicago. In winter 2022, The Hoxton will open its fourth London hotel, in Shepherd’s Bush. Based in Shepherd’s Bush Green, the hotel will have 237 bedrooms, including a new and “more affordable” Hideout category, a central bar, a restaurant, terrace and courtyard. The final opening will be Vienna in spring 2023. Based in Stadtpark, the hotel will have 196 bedrooms, coffee bar, restaurant and terrace, rooftop bar and pool and a basement speakeasy. It will also be home to events auditorium, which is a first for The Hoxton.
Duelling piano bar concept Jukeboxers to open third site, in Birmingham: Duelling piano bar concept Jukeboxers is to open its third site, in Birmingham. The company will launch the venue at Utilita Arena Birmingham this summer, building on its sister sites in London and Oxford. It is one of three new lettings at the venue, which is part of the NEC Group. Sommar Brewery has recently opened a microbrewery and craft ale pub while The Birmingham Contemporary Art Gallery has also set up home. They will sit alongside companies including Lego Discovery Centre Birmingham, Ed’s Easy Diner and Coca-Cola-owned Costa Coffee. Andy Cole, revenue development director at the NEC Group, said: “Having completed these lettings during the pandemic, we’re proud to see all retail units at Utilita Arena Birmingham fully occupied, bringing more entertainment, arts and food and drink to our offer.” Utilita Arena Birmingham usually hosts more than 100 events annually and attracts in excess of half a million visitors per year. Avison Young acted on behalf of the NEC Group.
Stonegate launches new diploma training scheme to boost internal promotions:Stonegate Group has teamed up with HIT Training to launch its new Multi-Unit Leadership Diploma scheme. The course has replaced its predecessor, which helped promote a number of employees internally. The diploma forms part of the company’s “Bar to Boardroom” ethos. The programme, aimed to push those in area manager positions to the next level in their careers, and for those in head office positions up to leadership roles, takes up to 18 months to complete and includes modules across all facets of the Stonegate business, including HR, finance, and strategy and business development. Lee Woolley, director of learning and organisational development, said: “We continue to build on our training programmes year-on-year, ensuring everyone within the business has access to training that will allow them to further their careers, as well as their personal and professional growth. For its continued growth and success, the industry needs to change its perception as a sector of ‘stop-gap’ jobs. Our industry has taken a huge knock over the past year, with extensive closures due to government restrictions shaking people’s confidence. However, we are determined that with continued investment in our people, we can show that a career in hospitality is not only stable but one in which you can thrive.” Stonegate Group acquired Ei Group in March last year for £1.27bn. It has 1,270 sites within the managed division and 3,200 leased and tenanted businesses.
Bottega launches new bar and restaurant format following racecourse deal:Italian drinks brand Bottega has launched a new bar and restaurant format, at Bath and Windsor racecourses – its first openings since the start of the pandemic. It follows a commercial agreement with Arena Racing Company that will also see Bottega open pop-up bars at other racecourses in England. The Bottega Terrazza Bar & Restaurant offers prosecco alongside a selection of Italian dishes. The business said the new concept complements its Prosecco Bar format, which is limited to drinks. The Prosecco Bar format was launched in 2014 on board Viking Group’s Cinderella ship, which operates on the Baltic Sea. Over the years, it has been introduced at airports, including in the UK at Birmingham, as well as hotels.
Loungers to open two new sites in one day: Listed cafe bar operator Loungers will open two new sites on the same day for the first time on Wednesday (26 May). The Nick Collins-led group will open Soffio Lounge in Stourbridge and Postino Lounge in Welwyn Garden City, which opens in the town’s former post office. Last week, the business opened Tretho Lounge in St Ives, Cornwall, and, last month, opened Lupo Lounge in Wolverhampton. The openings will bring its estate to 172 sites in total, comprising 142 Lounges and 30 Cosy Clubs. Propel understands the company has also applied to open a site in the former Curry’s shop in Haywards Heath, West Sussex. Speaking last month, Collins said: “We will approach the coming months cautiously but are very keen to get back to opening 25 sites a year at the earliest opportunity with such excellent properties being presented to us.”
Team behind The Garden Bar to double up: The team behind The Garden Bar, which operates at the Mercato Metropolitano site in London’s Elephant & Castle, is to open a second site in the capital. The new The Garden Bar will open in High Street, Bromley. It will seat 400 on a multi-level terrace – and will also feature a rooftop bar. The site will open in stages from Friday (28 May) with the building also set to feature a co-working space. The Garden Bar BR1 will host a rotating line-up of street food traders, with the first group being grill-themed concepts Wok & Grill, Butcher’s Grill and Argentinean Grill, reports Hot Dinners.
London-based Caribbean kitchen and pop-up Juici Jerk to transition business to retail-led model: London-based Caribbean kitchen and pop-up Juici Jerk is to transition its business to a retail-led model. The business will focus on a range of original homemade sauces, cooking kits, and food hampers “to deliver an immersive Caribbean cook-at-home experience”. On Tuesday, 1 June, Juici Jerk’s brand will undergo a complete refresh as it shifts towards an ecommerce-friendly platform to incorporate its new line-up of restaurant-quality Caribbean food products, which will be available for purchase from this date. The movement was triggered by the company’s success during the covid-19 pandemic as Juici Jerk founders Troy and Jarrell Johnson seized upon the opportunity presented to offer nationwide delivery on their products. Inspired by Pizza Pilgrims and other restaurant operators, the brothers launched the UK’s first nationwide Caribbean DIY meal kits. Since introducing them in November, Juici Jerk’s overall sales went up by 30% and weekly food deliveries jumped by more than 70% during a three-month period. Due to such high demand, the small team quickly expanded with a series of new hires and the opening of a new kitchen and production unit. Juici Jerk currently operates as a multi-dimensional Caribbean food business offering various services including private catering for events, festival stalls, corporate catering and food market pop-ups. Based in a commercial kitchen in Tooting, Juici Jerk’s main operation is its delivery and collection service running five days a week. Troy Johnson said: “Despite restaurants and pubs reopening, we are positive consumers are still excited by the concept of cook-at-home experiences and want to explore new cuisines, which is why we want to roll out our own products and sauces.”
Jazz musician’s lockdown pizzeria to become a permanent site: A pizzeria that operated during lockdown for deliveries will become a permanent fixture in Hammersmith from Wednesday, 9 June. Base Face Pizza, which uses flour with a low GI (glycemic index) for its pizza bases, was created by jazz musician Tim Thornton. He also raised funds for the NHS through his lockdown service. The site, on King Street, will serve topping ingredients ranging from Acton’s La Latteria Burrata and Cobble Lane charcuterie to Chiswick Chillies oil. The pizza menu includes Peppergine – burnt green pepper crema, roast aubergine, olives, tomato, oregano, basil and olive oil; and Truffle shuffle – mushroom and truffle crema, mixed wild mushrooms, mozzarella, parmesan and olive oil. Two tiramisus grace the desserts menu – classic and pistachio – and Base Face Pizza will be teaming up with Bears ice cream in Ravenscourt Park to produce exclusive flavours. Drinks come from Acton wine shop Vindinista and beers are from Jeffersons Brewery in Barnes. Thornton said: “Friends and neighbours were the initial customers. For the first two months I was giving the pizzas away and asking people to donate £5 to NHS charities, and it’s blown up since then, with pop-up residencies, farmers markets and even supplying pizzas to a whole jazz club at Kansas Smitty’s last year, bringing my food and music lives full circle. It’s amazing what you can do in the face of adversity.”
German Doner Kebab to open site in Colchester: German Doner Kebab, the Hero Brands-backed business, is to open a site in Colchester, Essex, as part of plans to hit the 100-site mark by the end of the year. The company will open the restaurant next month in the former Bright House premises in High Street, reports Essex Live. It will be German Doner Kebab’s 61st UK site and is set to create 40 jobs. Last month, Propel revealed German Doner Kebab had secured the former PizzaExpress site in London’s Canary Wharf’s and the ex-Revolution site in Manchester’s Fallowfield. Earlier this year, the brand announced it planned to open 47 new restaurants by the end of 2021. The Glasgow-based business has 76 global restaurants and is also looking to open more sites in the US, Canada, Saudi Arabia and Ireland.
Wildes Hotel Group puts long leasehold interest of two Holiday Inn Express sites on market for £7m: The Wildes Hotel Group has put two sites on the market for a total of £7m. The company has appointed agent Fleurets to market the Holiday Inn Express sites in Crewe and Hoylake. The Crewe hotel offers 64 en-suite bedrooms, 42 parking spaces, together with meeting rooms. The asking price is £3.5m for the long leasehold interest. The Hoylake hotel has 56 en-suite bedrooms and has a dedicated dining area and kitchen for the Holiday Inn Express business. However, in addition, there is an attached self-contained Kings Gap restaurant with 96 covers and Garden Room with 60 covers. The asking price is £3.5m for the long leasehold interest. Lesley Watmough, of Fleurets’ Manchester office, together with Paul Hardwick, from the London office, are handling the sales.