Whitbread boss set to open door to Costa sale plan: Whitbread chief executive Alison Brittain is expected to open the door to a break-up of the company this week, after mounting pressure from an activist hedge fund. Brittain is not “philosophically opposed” to Whitbread spinning off the Costa Coffee chain from its Premier Inn hotels, said City sources. She will lay out her position at the company’s full-year results on Wednesday (25 April) and is understood to believe a split is a case of “when, not if”, reports The Sunday Times. It revealed last week Elliott Advisors, the US fund with a record of taking aggressive positions in listed companies, had built a stake in Whitbread of more than 6%. That led to a jump in the company’s shares, which ended the week 6% higher at £42.35. Market sources claim Elliott has continued to buy stock since the disclosure, but it is not required to reveal its precise position unless its ownership exceeds 10%. The hedge fund is said to think a break-up could create as much as £3bn of value. Sachem Head, another activist investor, has built a 3.4% stake and is also demanding the company split its two main brands. A third top ten shareholder said this weekend that it was open to a break-up but was willing to wait for the right time to “maximise value”. Brittain is likely to resist an immediate split as it would derail her transformation plans for the 2,400-outlet Costa chain. These involve expansion in China and increasing presence in train stations and airports. Whitbread is undergoing a cost-cutting programme. A demerger of Whitbread’s two main brands has long been rumoured as a route to improving shareholder value. Some analysts suggested investors would see a 40% uplift if Costa were spun off. Losing Costa would leave Whitbread with Premier Inn, which has more than 750 hotels in the UK, and its pub and restaurant chains. Analysts expect Whitbread to announce an increase to its £150m cost savings plan with its results this week. For the year to the end of February, pre-tax profit is forecast to be £585m, compared with £565m the previous year, with revenue up 7.6% at £3.3bn.
First Restaurant Group expands Pubs & Rooms portfolio, plans to double by 2020: London-based First Restaurant Group, a growing collection of British pubs with boutique rooms and restaurants, has added 11 bedrooms to its recently acquired pub The Grafton Arms in Fitzrovia. The Grafton Arms is the third property, and the first in the West End, under First Restaurant Group’s Pub & Rooms portfolio. The opening of The Grafton Arms and installation of 11 bedrooms is part of the group’s expansion strategy, which will see it double its estate of pubs with rooms by 2020. The property is spread across four floors with a 40-cover ground-floor pub, a 20-cover terrace and 11 new boutique bedrooms. The pub serves a pan-Asian menu with dishes including crispy softshell crab, pan-fried sea bass with baby choy sum, and steamed pork bao buns. Drinks feature premium beer and cider as well as a number of guest ales, wine and cocktails. Managing director and co-founder Mitch Tillman, said: “We are proud to unveil our new bedrooms and are confident The Grafton Arms will enjoy the same high occupancy rates as our sister properties. The Pub & Rooms ethos is to deliver the quality of service and contemporary decor you’d expect from a top hotel, with the laid-back style and affordability of a pub.” First Restaurant Group owns five venues – canal-side restaurants The Waterway and The Summerhouse in Maida Vale, and its three Pub & Rooms sites The One Tun in Farringdon, The Clerk & Well in Clerkenwell and The Grafton Arms.
KFC still battling to get back its entire menu: Fewer than half of KFC’s 900 restaurants are offering customers a full menu more than two months after the company was hit by chicken delivery problems. KFC was forced to shut nearly 700 restaurants in February after switching from food distributor Bidvest to DHL and Quick Service Logistics. Bidvest was rehired last month to supply 350 outlets in the north of the UK. But customers up and down the country are still unable to order from a full range of dishes. KFC, which is owned by Yum! Brands, claimed 260 more of its restaurants will be offering a full menu from this week. However, this only takes the number to 400. A company spokesman told The Sunday Telegraph it hoped all of its remaining restaurants would have 98% of the menu available by early May. Food industry insiders claim KFC’s distribution switch was “entirely driven by cost” and “eyebrows were raised” when KFC gave DHL the contract as it had “virtually no experience in food delivery”. The speed with which KFC sought to transfer the distribution contract may also have contributed to the fiasco, experts said. A Bidvest spokesman said: “Every KFC restaurant that Bidvest Logistics service will be on full menu from Tuesday (April 24).”
City Pub Group executives see remuneration jump following IPO bonus:City Pub Group executives saw their remuneration jump in 2017 after receiving bonuses following the business’ initial public offering (IPO), the company’s annual report has revealed. The figures showed a £254,000 bonus was paid to executive chairman Clive Watson, while managing directors Alex Derrick and Rupert Clark received £180,000 and £240,000 respectively. Chief financial officer Tarquin Williams took home £128,000. The bonus was paid out 45% in cash and 55% in shares at the time of the IPO on 23 November 2017 at the placing price of £1.70. For the year ending 31 December 2017, Watson received total remuneration of £765,000 compared with £201,000 the previous year. This consisted of £101,000 salary and fees, £136,000 annual bonus, IPO bonus of £254,000, £3,000 in taxable benefits and £271,000 in pension and other payments. Derrick received total remuneration in 2017 of £642,000 compared with £187,000 the year before. This was made up of £101,000 salary and fees, £147,000 annual bonus, IPO bonus of £180,000, £5,000 in taxable benefits and £209,000 in pension and other payments. Clark took home total remuneration of £709,000 compared with £209,000 the previous year. This was made up of £101,000 salary and fees, £155,000 annual bonus, IPO bonus of £240,000, £4,000 in taxable benefits and £209,000 in pension and other payments. Williams saw his remuneration rise to £288,000 compared with £102,000 the year before. This consisted of £86,000 salary and fees, £71,000 annual bonus, IPO bonus of £128,000, £2,000 in taxable benefits and £1,000 in pension and other payments. City Pub Group currently operates 34 sites across the south of England and has secured another seven, including its first in Wales.
Patty & Bun to serve breakfast for first time as it secures two new London sites: Better burger brand Patty & Bun has secured two new London sites – including its first that will serve breakfast. The first, in Borough High Street, is a 1,500 square foot unit opposite Borough Market. Due to open in May, it will be the first Patty & Bun site to offer a breakfast menu, available Monday to Friday. The ground-floor level will focus on a quick-service takeaway style with no seating. The lower floor, with high ceilings and exposed brick walls, will provide a dine-in experience for customers featuring a bar and an open kitchen. In addition, the company has secured a 2,000 square foot ground-floor unit at the new Television Centre development in White City. The two additions bring the brand’s total number of London locations to ten. Both sites were secured by agents Shelley Sandzer. Joint managing partner Nick Weir said: “We are delighted to announce our involvement in securing two sites for this immensely popular brand. Patty & Bun is going from strength to strength and we are proud to build on this close relationship and work together with the team on its expansion.” Joe Grossman, founder of Patty & Bun, added: “Once again Shelley Sandzer has delivered on a couple of great locations that will suit Patty & Bun perfectly. Having worked together to secure all the Patty & Bun units, the team fully understands what our brand is about.”
Conviviality’s auditors may face investigation following collapse:Conviviality’s auditors KPMG could be investigated by the finance industry watchdog over its auditing of the company, whose slide into administration astonished the City early this month. Conviviality collapsed after two manual errors on separate spreadsheets sparked a crisis of confidence among its suppliers and lenders, tipping it into a cash flow crisis. The board has been criticised for growing Conviviality through aggressive acquisitions while its financial processes remained unsophisticated. KPMG was appointed as auditor in November 2015, and signed off Conviviality’s accounts until the company went bust. The Financial Reporting Council said it was “looking closely at the reported accounting issues at Conviviality”. It added a formal investigation may be opened “if the relevant threshold tests are met”, reports The Sunday Times.
Street Feast partners with Latitude to provide street food line-up at major festival debut: Street Feast, which is operated by London Union, is to provide a programme of street food operators for this year’s Latitude Festival in what will be its major festival debut. The event, which will take part in Henham Park, Suffolk, from 12 to 15 July, will feature wood-fired pizza from Fundi, arepas from Venezuelan concept Petare, and Up In My Grill, which serves British rarebreed meat. Others in the line-up include Salt Shed (short ribs), Black Bear Burgers, HotBox (barbecue), Chuck Burger, Northfield Farm (rarebreed bacon and sausage rolls), Growlers (Portuguese), Mama’s Jerk (Caribbean), Baked In Brick (barbecued meat and wood-fired pizza), Luardos (modern Mexican), Anna Mae’s (mac ‘n’ cheese), Yum Bun (bao), Dosa Deli (Indian pancakes), Club Mexicana, Kalimera (Greek), Baz & Fred (stone-baked pizza), Laffa (eastern Mediterranean), and Lickalix (natural ice lollies). The festival will also feature cooking demonstrations at the “Theatre of Food”. Street Feast co-founder Jonathan Downey said: “We are pleased to bring more than 80 of the greatest street food traders to Latitude. We’ve made it our mission to create the freshest ever festival food line-up and our trader game is strong.” Melvin Benn, of Festival Republic, added: “Food has become a vital part of the festival experience and being the first major festival to offer some of Street Feast’s most exciting vendors is a true milestone.”
Freehold of Shrewsbury building home to Pret to be auctioned with guide price of £2m: The freehold of a building in Shrewsbury home to Pret A Manger is to be auctioned by Allsop with a guide price of between £2m and £2.1m. The property in Pride Hill consists of a shop unit let to Pret A Manger on a new 15-year lease with no breaks with a review in 2023. There are offices above let to Lloyds Bank. The total current rents are reserved and amount to £135,200 per annum, suggesting a 6.76% gross initial yield for the buyer. The property is one of a series set to be auctioned by Allsop on Tuesday, 15 May at The Berkeley in Knightsbridge, London.
Independent Lincolnshire brewer has administration period extended:Independent Lincolnshire brewer Tom Wood Beers has had its period of administration extended. Administrator Charles Ranby-Gorwood, of Grimsby-based CRG Insolvency & Financial Recovery, has extended the administration until 1 June 2019 with the agreement of creditors. Earlier this year, Ranby-Gorwood revealed in his progress report he was making investigations into the way Tom Wood Beers was managed, which may result in court action. That report also showed the company has no secured creditors. The only potential preferential creditor was Tom Wood, as an employee for a claim against outstanding wages, but no claim had been received. The statement of affairs included £227,022 owed to HM Revenue & Customs, which had been received. The administrator had received claims from 20 non-preferential, unsecured creditors of £385,344. He had yet to receive claims from 26 creditors with original estimates of £152,393.
Preto launches Chelmsford site as part of plans to add four restaurants to estate in 2018: Brazilian rodizio brand Preto has opened a site in Chelmsford, Essex, as part of plans to add four restaurants to its estate this year. The company has opened the site at the Meadows Shopping Centre. Preto launched its first site in London’s Victoria in 2007 and now has 11 sites in the UK. The concept features all-you-can-eat dining with customers paying a fixed price and using a two-sided disc to control the pace of their meal. The green side indicates to the waiter to serve more meat, while the red side indicates a pause. Lunch and dinner menus feature an unlimited serving of up to 15 different cuts of spit-roasted meat, slow roasted over an authentic Brazilian barbecue. The meat is presented on skewers and carved fresh at the table accompanied by salad, rice or pasta. The Chelmsford restaurant is run by husband-and-wife team Ana Ferrante and Pablo Lermen, who both used to work at Preto’s Piccadilly restaurant. Ferrante told Essex Live: “People in Brazil are all about families and barbecues. That’s the atmosphere we want to recreate here at Preto.”
Authentic Alehouses extends £10m crowdfunding campaign until May:Leeds-based Authentic Alehouses, led by Burning Night Group boss Allan Harper, has extended its £10m fund-raise on crowdfunding platform Crowdstacker. The company launched its funding bid in July last year to revive the fortunes of underperforming pubs by attracting a new generation of customers with a menu of “quality artisan food and drink, updated decor and a variety of entertainment”. It opened its first venue in November by relaunching The Albert Hotel in Hull following a £1m refurbishment. Its other venues are The Fountain Inn, Barnoldswick, Lancashire; The Countess Of Rosse near Bradford; and the Albert Hotel in Southport. Authentic Alehouses is offering investors a 6.5% per annum interest rate through a peer-to-peer loan. Backers are also given the potential to earn income tax-free by investing via Crowdstacker’s Innovative Finance ISA. Authentic Alehouses’ campaign has so far raised £5,689,076. The next closing date is Thursday, 24 May. Authentic Alehouses plans to use the capital to refurbish sites in prime locations, streamline and modernise its operation to cut waste, and introduce higher-quality food, a broader range of drinks, and more family-orientated entertainment.
Hospitality staffing platform Syft acquires chef recruitment agency: Venture Capital-backed flexible staffing platform Syft has made its first acquisition. The London-headquartered company, founded in 2016 by Jack Beaman and Novo Abakare, has bought culinary recruitment agency PBL Chefs, which has 600 people working across the hospitality sector. The deal consists of a cash and shares-based arrangement that involves all the company’s team joining Syft. PBL Chefs managing director Phil Houlihan joins Syft as chef director, heading a department responsible for almost 1,000 chefs in the UK following the acquisition. The deal represents a further expansion into the hospitality sector for Syft, which has raised £8.75m in funding from investors. The company operates in the hospitality, events and industrial sectors in London, the Midlands and the north. Syft is the UK’s largest technology-enabled staffing platform, with more than 8,000 job-seekers using the app. Beaman said: “We are planning to invest heavily in chefs this year. Our first priority is to ensure all the chefs we have get an increase in pay as well as the 200 perks all our workers at Syft benefit from.” Houlihan added: “We share the same vision for how technology is changing the staffing industry and in particular driving wages for workers.”
Healthy restaurant and dry bar concept Redemption reports record trading day: Healthy restaurant and dry bar concept Redemption, which is raising funds on crowdfunding platform Crowdcube to open two central London sites, has reported its best trading day to date. The company stated: “We just took £7,000, which is our best trading day. Imagine if we did that 365 days a year – we would have yearly revenues of £2.5m from just Notting Hill and Shoreditch. This goes to show the demand for the concept is growing and our operation is capable of rising to it. It’s also important to look at revenues alongside staff morale and customer satisfaction to check this is a sustainable performance all round – our team are the best they’ve been and we keep getting five-star reviews!” Redemption is aiming to raise £300,000 on Crowdcube and is offering a 10.71% equity stake in return for the investment. So far, 204 investors have pledged £167,390 with nine days remaining.
Greene King wins consent for 20-bedroom new-build hotel: Greene King’s plans for a new 20-bedroom hotel at a pub in Harnham, Salisbury, have been approved. The company has been given permission by Wiltshire Council to build a hotel next to the Greyfisher pub in Ayleswade Road following the demolition of derelict garages. According to the proposal, the two-storey block will be built at the back of the pub with a paved and covered link between the two, reports the Salisbury Journal. A Greene King spokesman told the council’s planning committee the hotel would provide “significant economic benefits” to Salisbury.
Heron & Brearley reopens Castletown pub as it continues estate revamp:Isle of Man-based Heron & Brearley has reopened The George in Castletown following a substantial refurbishment as it continues to revamp its estate. The 19th century building has been rejuvenated to complement the regenerated Castletown Square. Operations manager Diane Edington said: “The George is the latest Heron & Brearley venue to receive a substantial investment as we continue to develop our pubs and bars across the Isle of Man. We are also bringing our Bella Pizzas to Castletown, along with an extensive gin list and a wide range of wine and real ale.” The George also features 11 bedrooms, which have also been refreshed.
Nottingham-based tea shop to open second site: Nottingham-based tea shop The White Rabbit Tearoom is to open its second site, in West Bridgford. Owner Frances Russell, who operates a site in Bridlesmith Gate, is opening the venue in Tudor Square in a space previously occupied by The Salad Bowl. Russell told The Business Desk: “West Bridgford is such a thriving community and as well as having a busy and well-used shopping area it is also a destination for people to travel to outside the city centre. We had been looking in the area for a while and once the lease for The Salad Bowl came up we knew we could create the perfect space.” Hannah Owens, of Rex Gooding Commercial Property, brokered the deal.