Ei Group boss – business rates ‘fundamentally flawed’: Ei Group (formerly Enterprise Inns) chief executive Simon Townsend has described the UK’s business rates system as “fundamentally flawed”. He reported the average business rates valuation across the estate had increased by 10%. He told Propel: “The system is intolerable. It is fundamentally flawed and a disincentive to invest.” He pointed out pubs accounted for 0.6% of the taxable business premises base but were paying 2.8% of the total rates bill. Townsend said pub operating costs were broadly set to rise but added that “food-led, labour-heavy” operators were most exposed whereas, across its managed and tenanted divisions, Ei Group’s sales split was still 70% to 75% drink-related. Of the company’s managed expert joint ventures, Townsend predicted the company would add two more to its existing seven by September, while the company was engaged in “many more” discussions. He said: “These are cutting-edge, highly experienced operators who have shown us how to make investments work harder. These guys have been fantastic to work with.” The longest-established Ei Group joint venture is Rupert Clevely’s Hippo Inns, which Townsend described as a “really great experience”. The partnership with Ben Stackhouse’s Publove is an evolution of the managed expert programme, with Ei Group buying a stake in an existing business that has expertise in operating hostels above pubs. Townsend said the company was looking hard at its estate to find unused space above pubs that might lend itself to hostel conversion. Ei Group now expects its tenanted and leased division to sit at 2,500 or so pubs as it expands its managed and commercial property divisions. Townsend added that very few new tied long leases were being granted as a result of the arrival of Market Rent Only legislation – although the company had 154 long leases in places that had been granted on a free-of-tie basis.
Douglas Jack – MRO impact at Ei Group (Enterprise Inns) lower than expected: Peel Hunt leisure analyst Douglas Jack has said the impact of the Market Rent Only (MRO) option on Ei Group (formerly Enterprise Inns) has been lower than expected. Issuing an ‘Add’ note with a target price of 165p, Jack said: “Pub Partnership’s like-for-like net income grew by 1.6% in the first half versus a 2.0% comparable, with tenant financial health measures remaining strong. Tenants are benefiting from 57% of total capex being growth-orientated versus 50% in the first half of 2016 and 10% in 2009. Unplanned business failures affected 1.5% (annualised) of the estate in the first half versus 7.3% in 2009. To date, the MRO’s impact has been limited. So far, 82% of licensees with an MRO opportunity have chosen to remain tied – 1% of pubs with an MRO option have adopted an MRO; this could result in an 18% reduction in net income in these pubs. We believe negotiations indicate 6% to 7% of the entire estate could eventually adopt an MRO. Lower than management expected, this could cost just £4m to £5m Ebitda per annum in five years’ time. It is already in forecasts. In the first half of 2017, Ei Group added new areas of licensee support such as access to preferred rating advisers; The Publican Channel (providing advice, training, point-of-sale items and deals); an online ‘applicant dashboard’ (allowing prospective publicans to search for suitable pubs and manage their applications); and access to 10,000 live acts with discounted rates. The managed estate’s expansion plan is on track. As at March, there were 24 managed investments (up from eight), 39 Bermondsey (up from 28) and 122 Craft Union (up from 71). The commercial lease estate has risen from 273 to 304 pubs despite the sale of 18 pubs for 15 times Ebitda. In the first half, the commercial lease estate achieved an average annualised rental income of £66,000 versus £59,000 in the first half of 2016. Our forecasts are above consensus, yet our estimate of 2.6% growth in average tenanted pub profitability assumes minimal growth in like-for-like net income after tail-end disposals (in the first half, the average disposal multiple was 11 times Ebitda). We forecast Ebitda falling by 1% this year, outpaced by net debt falling by 5%, creating 16% annual growth in equity value before considering the impact of share buybacks on debt and equity value. Ei Group’s EV/Ebitda rating is in line with its ten-year historical average, and below the 12.2 times it averaged in 2002 to 2006 when the company generated strong earnings growth. We believe the political/regulatory barrier to the company’s growth has gone, improving its long-term prospects.”
D&D London to open third Leeds restaurant, Issho, next month: Restaurant operator D&D London will open Issho, a new Japanese rooftop restaurant, in the £165m Victoria Gate development in Leeds on Wednesday, 21 June. Issho, which means “together” in Japanese, will offer authentic Asian dishes with a contemporary twist and an emphasis on sharing. The 7,807 square foot restaurant will feature a rooftop bar and outdoor terrace. The new restaurant is D&D’s third venue in Leeds and follows the success of Angelica and Crafthouse. Issho executive chef Ben Orpwood has previously worked at Knightsbridge restaurant Zuma and helped launch its Istanbul and Dubai sites before moving to Australia to work on the growth of the Toko Group as executive chef. He also opened popular Asian restaurant Sexy Fish in Mayfair in the same role. He said: “I’ve been lucky enough to travel to Japan several times and have worked in Asian restaurants across the globe, from Turkey and Dubai to London and Australia. My experience has certainly helped shape the menu at Issho and create eye-catching dishes that are full of flavour. It’s been a long time in the making but all the hard work is paying off and we can’t wait to give food fans in Leeds the chance to try it for themselves.” The kitchen will also serve traditional “robatayaki” dishes, where food such as Iberico pluma, sea bream and king salmon is slow-grilled over charcoal.
Beefeater and Frankie & Benny’s launch main meal deals: Casual dining competition is hotting up with Whitbread launching a 40% off main meals promotion across its Beefeater estate, while The Restaurant Group is offering two-for-one main courses as part of a new menu at its Frankie & Benny’s sites. The Beefeater promotion is valid until Sunday (21 May). Promotional material released by the company states: “Treat yourself this week and enjoy any one of our mains from our menu for less. Whether you fancy a steak, a crispy chicken burger with Tabasco coating or you’d just like a good excuse to try one of our new Great Taste of Britain dishes – such as our imperial lamb curry – we’ve got something to tickle your taste buds.” Meanwhile, Frankie & Benny’s states on its website: “New York Italians know a thing or two about looking after the family. And so do we. Right now you can get two for one on mains – and with a new menu, there’s plenty to keep everybody happy.” The Frankie & Benny’s offer is available all day, every day until Monday, 19 June.
Patience pays off as Pieminister opens Birmingham city centre site, sixth venue in total: Bristol-based Pieminister has opened a restaurant in Birmingham, ten years after founder Jon Simon started searching for a site in the city. The new venue, Pieminister’s sixth in total, has opened at a former bank in Waterloo Street next to Michelin-starred restaurant Adam’s in the city centre. Pieminister’s plans to open in Birmingham almost a decade ago fell through when Paradise Forum became earmarked for demolition. Simon told the Birmingham Mail: “It would have been a good view from the unit we looked at in Paradise Forum but it wasn’t to be. Birmingham is being developed and we’ve seen how that has also transformed Bristol. I hope we have found the right spot in Waterloo Street. With New Street Station and Grand Central opening you can see how Birmingham is developing, which is why we are here. We didn’t want to be in Grand Central, though. We like to be on real streets not in manufactured environments.” Simon launched Pieminister in 2003. The company operates two restaurants in Bristol and others in Cardiff, Leeds and Nottingham. It also operates two cafe-style venues in London, with others in Bristol, Oxford, Stoke and Manchester. Last year, the company said it was eyeing 30 restaurants by 2020 after securing a £1.4m finance package from HSBC to support expansion plans.
Bourgee to launch fourth site, next week at London Southend airport: Steak-lobster lounge concept Bourgee, which operates sites in Southend and Chelmsford and recently opened a venue in Bury St Edmunds, Suffolk, is returning to Essex to open its fourth site. The company, founded by James Welling and Mark Baumann in 2014, will open Bourgee Bites – Bar – Luxe Lounge at London Southend airport on Monday (22 May). Bourgee markets its brand as “luxury dining at affordable prices”, with all menus devised by Baumann, a regular on television cookery shows. He said: “We have a strong reputation in Essex but the addition of London Southend airport means we can bring our signature Bourgee format to the international and wider UK market. As the airport builds to become a major flight pathway with the addition of the new European routes, we anticipate welcoming a host of new brand fans to the Bourgee family.” Welling added: “Our new Bourgee Bites – Bar – Luxe Lounge will feature a champagne bar alongside tables serving tapas-style plates inspired by our signature dishes. We’ve always believed high-quality food and drink shouldn’t be limited to those in central London or come with an over-inflated price tag in a stuffy setting. By working with London Southend airport, we wanted to break boundaries again and bring this ‘affordable luxury’ ethos to departures.”
Novus Leisure eyes Balls Brothers expansion across the capital: Novus Leisure, the London bar and restaurant operator, is looking to expand its Balls Brothers brand across the capital. The company has instructed agents Colliers International to secure sites for the expansion. Founded more than 100 years ago, Balls Brothers operates nine sites in London and is seeking sites particularly in the West End, with other ideal locations including Covent Garden, Oxford Circus, Waterloo and Piccadilly. Units of at least 4,500 square feet are being sought, preferably at ground-floor level with outside space and close to office developments. Novus Leisure chief executive Toby Smith said: “After completing a number of refurbishments within our estate, we are excited about the opportunity to add new properties to our portfolio in the City of London and West End.” Ross Kirton, head of Colliers International’s leisure agency team, added: “Like London, Balls Brothers is constantly changing and evolving. The success of the company’s new immersive masterclasses have propelled the business even further, so it is now seeking to expand its footprint.”
Young’s opens its first restaurant, in former Wimbledon pub: London pub retailer Young’s has opened its first restaurant with the launch of the Fire Stables in Wimbledon, south west London. The former pub in Church Road, close to the All England Lawn Tennis Club, has been transformed to produce a “touch of Parisian cafe charm” and offers light lunches and three-course dinners, with brunch at weekends. The dining room features 1920s-style lights and a chandelier, with stone floors and leather banquette seating at the rear. Walls are decorated with Victorian drawings, artefacts, and vintage mirrors. The bar features booths and brown leather sofas in front of a working fireplace and offers a rotating selection of local and craft beer alongside cocktails and wine. The menu focuses on fresh fish, with a fish counter at the front of the restaurant. Fish specials are baked or finished on the grill and accompanied by fennel, apple, radish and dill. Lobster and crab can be pre-ordered, with the restaurant sourcing produce from the boat that morning. Non-fish dishes include corn-fed chicken breast with leg coquette, and lamb rump with belly crotons, gem lettuce and Montgomery cheddar. Modern desserts include vanilla cheesecake with rhubarb doughnuts and Earl Grey gel. Sunday dinners are a choice between aged beef sirloin, corn-fed chicken with wild boar stuffing, and roasted cauliflower with spiced tempura and apple caramel.
South Coast Inns acquires Dartford’s oldest pub for ninth site and first in Kent: West Sussex-based South Coast Inns, which is backed by industry veterans Chris and Delia Chapman, has acquired the Royal Victoria & Bull Hotel in Dartford, Kent, for its ninth site and first in Kent. The 23-bedroom, grade II-listed inn is the town’s oldest and was formerly owned by Tattershall Castle Group (TCG), which entered administration in October 2015. The venue was the last TCG site trading in administration. The property, which dates to 1703, has retained many period features including a vaulted gallery in the main bar that would originally have been around the carriage archway. South Coast Inns, run by the Chapmans and their son Sam, was formed following the sale of the Chapman Group in November 2016. The Chapman Group formerly owned and managed 28 hotels and pubs in the south of England and was sold to Dominion Hospitality, an affiliate of private equity group Stellex Capital Management. Anthony Jenkins, associate director at Christie & Co, which brokered the Chapman Group sale and South Coast Inns’ latest acquisition, said: “The market is currently strong for pubs with rooms.” South Coast Inns operates hotels and pubs with rooms in Sussex, Gloucestershire, Somerset, and Shropshire.
Liverpool’s Lunya to launch warehouse as it expands range and eyes restaurant roll-out: Spanish restaurant and deli concept Lunya, which opened its first site in Liverpool in 2010, is set to open a warehouse to increase direct imports from Spain while eyeing further restaurant openings. The company has expanded its online deli range, which has led to the requirement for a warehouse to increase imports and manage despatch. The warehouse will also feature a kitchen to produce a wider range of baked goods, food to go, salads and dips for the company’s restaurants and delis in Liverpool and Manchester, with a third site in the pipeline. Lunya co-founder Peter Kinsella said: “To give us greater control of supply and manage the increased cost pressures from low exchange rates, we are aiming for 75% of all our Spanish products to be directly imported. Investment in a warehouse and further increasing the volume of Spanish products with our expansion will enable us to negotiate better prices with producers and suppliers. Already, we have seen the benefit of that with reduced prices in our restaurant menu. It will enable a similar price reduction on our deli range too as soon as our warehouse is operational. Plus we’re really excited at the prospect of a third site for Lunya, with our research at an advanced stage.”
Anglo’s Mark Jarvis to open Mayfair bistro next month: Mark Jarvis, who operates British restaurant Anglo in Farringdon, is teaming up with Alex Harper, former chef at Michelin-starred The Harwood Arms, to launch a new London venture next month. Jarvis, former head chef at the Bingham and Le Manoir, and Harper will launch In Bistro in Woodstock Street, Mayfair, on Tuesday, 6 June taking inspiration from Paris’ neo bistro movement. The venue will take over The Woodstock Tavern, with a rotating menu featuring seasonal specials. Wine will be from emerging regions and include lesser-known grape varieties, alongside craft beer and cocktails, with front-of-house run by Anglo’s Nick Gilkinson. Counter-style seats on “butcher’s block” stools will be kept free for walk-in guests at the bar, while banquette tables will be available for reservations. Neo Bistro’s bare-brick walls will be punctuated with vintage posters and, as a nod to Anglo, a neon sign. Jarvis said: “Alex and I have worked in some great kitchens together over the years, but to be doing things on our own terms is really rewarding.”
East Sussex-based hoteliers acquire historic Lincolnshire hotel for fourth site: Husband-and-wife team Olga and Gurnake Cheema, who operate three hotels in East Sussex, have acquired the historic Cley Hall Hotel in Spalding, Lincolnshire. The venue in High Street is undergoing conversion work to turn former staff living quarters into four guest rooms, taking the total number of bedrooms to 19. At the moment the hotel is run as a bed and breakfast and is also popular for its afternoon teas. Olga Cheema told Spalding Today: “We had never been to Lincolnshire before but we loved the building. What attracted us was the turnover and potential of adding extra rooms. This was the cherry on the cake for us. The hotel is run very well and we want to increase the revenue. There is planning permission for a 100-seater restaurant and that is something we may add if there is demand.” The Cheemas’ other hotels are The George in Battle and the Millifont Guest House and Lansdowne Hotel in Hastings.
Foxlow opens fourth site, in Soho, offering weekday breakfast menu: Foxlow, the neighbourhood restaurant from the founders of high-end steak brand Hawksmoor, has opened its fourth site and the first to offer a weekday breakfast menu. The brand, launched by Will Beckett and Huw Gott, has opened the venue in Lower James Street, Soho, having previously agreed a new 20-year lease for the 3,900 square foot space. It opens at 8am with the last booking for breakfast at 11am. The menu includes fried egg, chicken and croissant waffle as well as the Foxlow breakfast featuring fried egg, rare-breed sausage, dry-cured bacon, tarragon mushrooms, spice-roasted tomato and toast. The restaurant features blue leather banquette seats and tiles, and classic American diner styling. A central bar is a focal point for the room and there is also window seating. Foxlow’s other sites are in Balham, Chiswick and Clerkenwell.
TV chef Damian Wawrzyniak to open debut restaurant House of Feasts in Peterborough next month: Chef, author and television presenter Damian Wawrzyniak is to launch his debut restaurant, House of Feasts, in Peterborough on Friday, 9 June. The menu will focus on sharing platters using seasonal ingredients from House of Feasts’ own garden, barbecue dishes and hog roasts on Sundays. The restaurant in Crowland Road will offer outdoor seating for 120 people, an outdoor bar and a gazebo for wet days. Wawrzyniak said: “Guests should expect feast-style food with something new to try every time, made using only the best-quality and local ingredients. Menus could change daily or weekly and our huge garden will be open for large parties, weddings and family gatherings. We have a large barbecue and spit roast, where we will cook whole pigs.”
Michelin-starred chef Ollie Dabbous opens restaurant at Experimental Group’s debut London hotel: Michelin-starred chef Ollie Dabbous has opened his restaurant at Experimental Group’s debut London hotel. Henrietta Hotel in Covent Garden is a sister to Experimental Group’s Grand Pigalle in Paris and its fourth London venue alongside Covent Garden wine bar and restaurant Compagnie des Vins Surnaturels and the group’s two bars – Experimental Cocktail Club and Joyeux Bordel. The 80-cover restaurant – Henrietta – is on the ground and first floors of the hotel, offering a simple, seasonal and ingredient-led menu with a “subtle nod to France”. Xavier Padovani, of the Experimental Group, said: “We are thrilled to be partnering with Ollie on the restaurant for our first London hotel. He is leading the way in London gastronomy and we have come to know him well, so this is a perfect fit for us.” As well as his eponymous restaurant, for which he received his Michelin star in 2012, Dabbous also runs fellow Fitzrovia venue Barnyard.
Bar services business plans nightclub and restaurant opening after acquiring first permanent site: Bar Away, a business that provides temporary bar services at live music and sporting events, has signed a lease for its first permanent venue, in the centre of Birmingham. It plans to launch a nightclub and restaurant in the 4,479 square foot premises in Thorp Street. Known as Thorp17, the venue is expected to open in mid-June. Anthony White, of Bar Away, told Insider Media: “We have been on the look-out for a debut location for some time and Thorp Street ticked all the boxes on our wish list. We have high hopes of replicating the successful formula of the temporary bars to a fixed base and look forward to welcoming guests later this year.” Pennycuick Collins worked on the letting on behalf of a private landlord.
First-time hotel investor acquires Essex hotel for £5.75m: First-time hotel investor Mosum has acquired the 110-bedroom Best Western Marks Tey Hotel in Colchester, Essex, off a guide price of more than £5.75m. The property occupies five acres and offers two function rooms, eight conference and meeting rooms, a leisure club with indoor pool and gym, and 140 parking spaces. It is operated subject to a marketing agreement with Best Western. Michael Easton, associate director at JLL’s hotels and hospitality group, which brokered the deal, told Insider Media: “This was a fantastic opportunity to secure a hotel that is easily accessible to business and leisure travellers by road and rail. Having generated good levels of interest, we are delighted to have completed the transaction with Mosum and wish them well with their first hotel acquisition.” Shepherd and Wedderburn acted as legal advisers on the sale.
Sweet & Chilli founders to launch cocktail bar and music space in Bermondsey: The founders of drinks agency Sweet & Chilli are set to launch cocktail bar and music space Nine Lives in Bermondsey, east London, this summer. Allan Gage, Emma Hutchison and Tom Soden will launch the venture in a Victorian basement in Holyrood Street. The cocktails will fall into five categories – shorts, talls, tarts, lowriders and loops – with the venture’s “waste nothing” ethos ensuring leftover lemons, for example, are used to produce essential oils used in liqueurs and hand soap or turned into compost to fertilise the venue’s herb garden. Even the embroidered staff uniforms have been bought from vintage shops, with the intention to drive a “positive and sustainable movement within cocktail culture”. Gage said: “Nine Lives is a total passion project. It’s a blend of all the things that make Sweet & Chilli tick – superb service, tasty drinks, mad styles and music we love. It’s a place we want to bring mates to and the proud result of lives spent behind bars.”
The Resort Group appoints Andy Osborn as chief executive of new beach club brand: Luxury resort hospitality company The Resort Group (TRG) has appointed Andy Osborn as chief executive of its new beach club brand, Bikini Beach. TRG launched the brand when it opened its latest resort, at Cape Verde, off the north west coast of Africa. The resort is the Atlantic islands’ first luxury beach club and features two adult-only hotels, tropical pools and a spa in keeping with the islands’ mantra – “no stress”. Osborn has more than 20 years’ experience in the hospitality sector, having worked for The Breakfast Group, Faucet Inn, Stonegate Pub Company, and Maxwell’s. He also opened more than eight Tiger Tigers for Urbium by the time he was 21. TRG chief executive Rob Jarrett said: “Andy has a strong vision for Bikini Beach and already we have seen fantastic improvements to enhance the club’s offering.” Osborn added: “Cape Verde is an emerging tourist destination and the islands have something to offer everyone.” Bikini Beach Club will host a number of pop-up parties in London to promote the brand.