Wagamama seeing better Ebitda on lower sales, delivery worth £77,000 per month per site: Numis leisure analyst Tim Barrett has said Wagamama is seeing better Ebitda despite lower sales while delivery is now worth £77,000 per site. Issuing a ‘Buy’ note on TRG’s shares following Wagamama’s third quarter bondholder update, Barrett said: “Wagamama UK like-for-like revenues grew 7.4%, with reported revenues falling from £89m to £70m, reflecting the phased reopening of the estate post-lockdown. The main new information is Ebitda increased from £15.7m to £18.0m on lower sales. This was inflated by a £4m rent credit (relating to a deal subsequently agreed for the second quarter), but even excluding this, there was an improvement in Ebitda margin from 17% to 20%. In part this reflects business rate savings, but is also due to the focus on cost efficiency (and some synergy with TRG). The revenue pass-through was limited to only 9% whereas in contrast in the first half, the pass-through was 30.2%. We believe the strong sales recovery reflects the customer proposition (net promoter score is more than 40), effective marketing post-reopening and customer demographic (younger, less risk-averse consumer). Importantly, Wagamama brings impressive delivery/collection expertise to TRG where delivery reached 24% of revenues. This implies an average of £77,000 sales per month per unit across the 120 restaurants offering it. Delivery will be a useful source of cash over the next few months, notwithstanding platform fees. Restrictions and tiering changes inevitably mean the outlook is mixed and we recently introduced more caution into our group forecast for the fourth quarter of 2020 and the first quarter of 2021. More generally though, we see TRG as well-placed to win market share amid supply withdrawals of 20% to 30%, making it an attractive recovery play. Wagamama and the pub restaurants (mainly freehold) now account for 80% of the business and will be the core driver of value at TRG.”
Buyer of Individual Restaurants business loaned it £25m to repay some of its debt: Ice Acquisitions, the new vehicle controlled by Sir Malcolm Walker and Tarsem Dhaliwal, which last month bought back the Piccolino, Restaurant Bar & Grill, Opera Grill and Bank restaurant collection, previously operated by Individual Restaurants, paid the company £25m prior to the transaction to help it repay some of its debt, Propel has learned. Ice Acquisition announced last month it had secured the future of 28 restaurants, protecting the jobs of 1,300 employees, in a deal worth more than £40m. The transaction was completed via a pre-pack administration handled by Deloitte, which saw the business receive up to six bids. Ice Acquisition paid a total consideration of £17.9m for the Individual Restaurants business, which has been backed by Walker, the founder of frozen food chain Iceland, since it was taken private in 2011. This consideration comprised the novation of £16.3m of secured shareholder loan note (SHLN) debt over the company to Ice Acquisitions and a £1.6m cash consideration to cover unsecured dividends, professional fees and administration expenses. Prior to Deloitte’s appointment as administrator, and in direct contemplation of the completing the transaction, Ice Acquisitions loaned £25m to Individual Restaurants’ parent company for the purpose of repaying HSBC, the first ranking secured creditor, to enable the bank to release all its guarantees and security of the company. HSBC is still owed £14m by Individual Restaurants. In the administrators report, it said: “The business suffered from declining turnover in recent years due to falling customer demand, combined with the increasing cost pressures facing the wider casual dining sector, including higher business rates and the National Living Wage.” The company subsequently recorded an operating loss of £4.3m in FY20. It reported a further operating loss of £2.8m in the four months to 31 July 2020, which resulted in significant cash flow pressure. The report also showed subsidiary companies under which the eight Gino D’Acampo My Restaurant brand was operated did not enter an insolvency process as its “directors’ view is it can continue to service its debts on a stand-alone basis, including independent shareholders, who have indicated they will inject further funding”. Deloitte carried out an accelerated sales process for Individual Restaurants, which generated seven bids. The SHLN offer included the £16.3m rollover of secured SHLN loans made to, and cross guaranteed by the group of Individual Restaurants entities and cash to cover costs and leakage arising as a result of the insolvency process. Other bids include one that offered up to £10m for up to six sites, and another that offered £142,000 per site or up to £6m (assuming no debt). The report states: “It was agreed that the third-party bidders who submitted bids would not be progressed, as the process no longer had the support of the SHLN providers, who were not prepared to provide additional funds for the business. No additional funding was available from HSBC; and the SHLN bid was materially better for creditors than both alternative insolvency scenarios and the best third-party bid identified in the accelerated process.” Walker headed up a consortium that took the Piccolino and Restaurant Bar & Grill business, which then comprised 33 sites, private in 2011. The business, which earlier this year parted company with long-term managing director Vernon Lord, operated 21 Piccolino sites and eight Bar & Grills across the country, prior to the sales process.
Paul seeks franchise partners for UK-wide rollout: French artisan bakery and patisserie Paul has announced it is seeking franchise partners to roll out the bakery across the UK. The 38-strong bakery has operated in London for 20 years and in Oxford for six but was founded in France 120 years ago. It vows to provide franchisees with a national supply chain, economies of scale and a flexible retail format to fit any location. Paul will offer partners a choice of three store models – Cafe (1,500 square foot-plus), Express (500 to 800 square foot-plus) and Kiosk (500 square foot-plus), for service stations and transport hubs, town and city centres as well as suburban villages. All partners will be fully supported throughout the entire set-up process, from training courses and help with recruitment, through to marketing and PR. Paul UK chief executive Mark Hilton said: “As we enter the franchise market, we will be looking for like-minded, experienced investors and operators who are just as passionate about baking and quality as we are. While we continue to grow the brand in London, we have also identified numerous national opportunities outside of the capital, which will be enabled predominantly, although not exclusively, by working with franchise partners. We are currently determining priority cities, but if approached by the right investors outside of these areas, we are open to having dialogue with them.”
Trof Group founders set to launch Ramona restaurant and bar in Manchester:Joel Wilkinson and Adelaide Winter, founders of the Trof Group, which became Mission Mars, are to launch a new Californian-inspired restaurant and bar in Manchester next year called Ramona. The project, which previously had the working title Swan Street Firehouse, will open on the former Pull Up site in the city’s Swan Street. The new venture, which will have a 1,000 capacity, will be a “Californian-inspired restaurant and bar in a large warehouse, surrounded by an enclosed beer garden”. There will also be a second building – the MOT station, in the backyard, which will house live entertainment and a large taproom. The beer garden will also have a margarita bar in it and a market garden. Mission Mars was launched in 2015 with a portfolio of already-popular sites built up by Wilkinson and Winter, including Trof, Gorilla and The Deaf Institute. Revolution Vodka Bar founders Roy Ellis and Neil Macleod acquired a 50% stake in Trof with a view to opening the “best entertainment venues and bars in the world” under the new vehicle Mission Mars. The Deaf Institute in Grosvenor Street and Gorilla in Whitworth Street were closed earlier this year in the wake of the pandemic. In July, terms were agreed for the Aaron Mellor-led Tokyo Industries to acquire both venues.
Paddy & Scott’s restructures management team as online sales soar by 2,100%:Independent Suffolk coffee shop operator and wholesaler Paddy & Scott’s has announced the restructuring of its management team as online sales have soared by 2,100% year-on-year. Internal promotions have seen Jon Reed move to the role of managing director while Zoe Hill has taken the position of operations director. Founder Scott Russell has stepped back from day-to-day involvement and continues as non-executive director and will oversee the creation of the Paddy & Scott’s Foundation in 2021. Russell said: “We are coming through this pandemic as a really focused, nimble and sustainable business. At the beginning of the year, Jon took a big gamble on e-commerce and, by the time lockdown arrived, we had invested in creating a new web store that is now flourishing with sales having increased by 2,100% year-on-year and customer service engagement levels are through the roof. Jon has been with the business for nearly three years and has been responsible for driving our record growth and securing the largest coffee contracts in the organisation’s history. Zoe joined Paddy & Scott’s in 2014 and has worn every hat. Zoe is leading a transformation project around data and technology that is really revolutionising how Paddy & Scott’s operates.” Paddy & Scott’s has launched a collection of coffee-inspired Christmas gifts including coffee masterclasses online and from its new Ambition Academy on the waterfront in Ipswich. Easter 2021 will see the opening its largest “fuelling station” to date as part of the Northern Gateway development in Colchester.
Farina Pizzeria Napoletana to open new restaurant and two dark kitchens in new year: Pizza restaurant Farina Pizzeria Napoletana, founded by Edy Piro and Paolo Petrillo, is opening a new site in Notting Hill and two dark kitchens, in Vauxhall and Camden. The restaurant is slated for an opening on 7 January on Notting Hill Gate after closing its nearby site due to contractual limitations earlier in the year. If tier three restrictions remain in place, the restaurant will only open for takeaway and collection. It will offer 50 free pizzas for both lunch and dinner on 7 and 8 January on a first come, first served basis. Piro said: “We are incredibly excited to be bringing Farina back into the London pizza scene. We are sticking to our tried and tested formula of classic Neapolitan pizzas, this time in a more permanent site in our stomping ground of Notting Hill. We are refitting a space with a long lease after learning from our previous set-up. Lockdown and the pandemic has been an opportunity to find more empty units, and more available and flexible landlords. Alongside this, we are opening two dark kitchens to supply totally new areas of London with Farina Pizzeria Napoletana.” Its Neapolitan-style pizzas use San Marzano tomatoes, dough made in the traditional way and buffalo mozzarella. The dark kitchens will use sugar cane-based containers for cold starters, aluminium for dishes that need reheating and uncoated recycled cardboard for pizzas.
Five more restaurants named for Time Out Market Dubai: Time Out Group, the global media and entertainment business, has announced five more food brands to the line-up for when Time Out Market Dubai is launched. The market, which is expected to open in the first quarter of 2021 will host vegan-friendly plant-based concept Little Erth by Nabz&G, ramen and kushiyaki skewers specialist Reif Japanese Kushiyaki,dessert brand Scoopi Cafe, smoked meat pitmaster The Mattar Farm Kitchen and teahouse Two leaves by Project Chaiwala. The restaurant will join eight others that were announced in November. They are Indian fusion concept Masti, modern eastern eatery BB Social, European cuisine from Folly by Nick & Scott, local operator Vietnamese Foodies, burgers by Pickl, Dubai pizza favourite Pitfire, dessert specialists Brix and craft coffee roastery Nightjar. Time Out Market Dubai will be located in Downtown’s Souk Al Bahar and will boast scenic waterfront views overlooking Burj Lake, which is next door to The Dubai Mall and the Burj Khalifa. The Dubai site – the seventh Time Out Market venue – will be followed by Porto (fourth quarter 2021), London Waterloo (2022) and Prague (2023).
London-based restaurant and natural wine bar Elliot’s to double up with Hackney opening: London-based restaurant and natural wine bar Elliot’s is to double up with an opening in Hackney. Founder Brett Redman will launch the site in Mare Street in February – ten years after opening in Borough Market. On offer will be its signature small plates as well as its slow-fermented sourdough pizzas cooked in a wood-fired oven, with varieties including winter truffle, pumpkin, raddicio and mascarpone; and taleggio, sage and brown butter.
Glasgow-based operator doubles up with second site: Glasgow-based operator Dovile Newton has doubled up with a second site in the city. Newton, who owns the Locker 1012 cafe and coffee shop, has launched Locker Hyndland in Clarence Drive in the west end of the city. The cafe, bistro and bakery has opened following an £80,000 investment and four-month refurbishment. Newton has brought in former MasterChef: The Professionals contestant David Hetherington to head the kitchen. Locker Hyndland will also be open for an evening bistro service three nights a week. Inspired by the London brunch scene, Newton launched Locker 1012 in Argyle Street two years ago and hopes to replicate its success with Locker Hyndland, which was inspired by her travels to Venice and California. She told The Herald: “It’s exciting to have David on board to take the food offering to the next level. We love his food and have followed his career since he was head chef at The Finnieston in 2017. Together, we’re creating a balance of what people are used to while still responding to different trends.”
Kricket alumni open permanent site for pop-up Indian concept: Kuldeep Mattegunta and Mustaq Tappewale, who met while working at modern Indian restaurant group Kricket, have opened the first permanent site for their concept, Republic. It has been popping up around London from time to time and has now opened a site in Chiswick High Road. The duo describe the concept as “representing a dynamic, eclectic and evolving India” with a menu that is “rooted in traditions but is sophisticated and imaginative at the same time”. Mattegunta, who has previously worked at Michelin-starred restaurant Benares, Nobu Park Lane and Quilon, is leading the kitchen with Tappewale as general manager. Dishes include crispy chicken and chips “65” with spicy chip shop mayo and pollock “meen gassi” with spicy garlic murmura. Due to tier three restrictions in London, the restaurant is offering delivery via Deliveroo and hopes to open for dine-in in the new year.
Park Holidays continuing to look at expansion opportunities: East Sussex-headquartered holiday park group Park Holidays UK has said it is continuing to look at expansion opportunities and expects turnover for 2020 to be “significantly reduced” as a result of coronavirus. The company, which operates 31 sites across the south of England, provided the update as it reported its accounts for the year ending 31 December 2019. It stated: “Holiday parks across the UK were closed from mid-March 2020 to early July by the government in response to the coronavirus pandemic. This has caused, as is the case in many industries, a significant and unprecedented reduction in business activity during the period these restrictions have been in place. Revenue has been significantly reduced and, therefore, the expected results for 2020 are materially lower than those achieved in 2019. The company is looking for opportunities to expand the business footprint and increase market share.” During the period, the company bought Seaview Holiday Park in Essex – now rebranded as West Mersea Holiday Park – for £7.4m. Revenue increased 1.5% to £157.2m, compared with £154.8m the previous year. Ebitda was up 3.2% to £46.8m, compared with £45.4m the year before. Pre-tax profit was down to £20m from £31.9m the previous year. Park Holidays UK, which was founded in 1984, was acquired by private equity firm Intermediate Capital Group in 2017 and is headquartered in Bexhill-on-Sea.
Apres Food Co restaurant overhauls business model to delivery boxes: Healthy comfort food restaurant Apres Food Co has overhauled its business model to launch nationwide delivery of two types of “restaurant-quality” food boxes. The Clerkenwell restaurant, founded by Catherine Sharman and Danny Gray, which is under tier three restrictions, now offers Specific Health Focused Boxes and Better Boxes, which are “a range of delicious, nutritionally balanced, restaurant quality dishes”. There are three Specific Health Focused Boxes “packed with essential nutrient-rich dishes”. They are Immune Function Support Box; Clarity of Mind and Energy Box; and Blissful Sleep Box. Using a search function on the Apres Food Co website, customers will be recommended a box that’s most suited to their needs. Each box contains recipes, overviews, information, tips and advice and cost £22 for a one-day box, £60 for a three-day box and £95 for a weekly box. Better Boxes contain flash-frozen meals, puddings and snacks. Options include Shakshuka with garlic roast potatoes; American-style blueberry pancakes; Norfolk chicken casserole; and 12-hour slow-cooked Sri Lankan lamb curry. Desserts feature plant-based rich chocolate and raspberry fudge cake plus and energy-boosting snacks like protein truffles. Better Boxes will be available with a minimum order value of £25. Co-founder Sharman said: “Having a restaurant meant we were limited to daily visitors but with this new launch, we have a much wider scope now that we’ll be delivering nationwide.”
Supercity Aparthotels secures £10m to expand in UK: Serviced apartment group Supercity Aparthotels has secured £10m equity to grow its portfolio across the UK. The privately owned group owns six freehold aparthotels that comprise 300 units in London, Manchester and Brighton. Supercity Aparthotels chairman Roger Walters said: “Despite a challenging year for the industry, by owning our real estate, brand and operating company, we have been able to quickly adapt our business and maximise the trading performance of each location. We have continued to invest in the business, ensuring all properties maintain our high standards. We have also appointed new leadership and deepened our relationship with key supplier partners. Our business model has proven to be resilient and we are committed to growing the portfolio across key locations in the UK.” Philip J Houghton took up the position of managing director at Supercity earlier this year. Houghton, who was a founding partner of Starboard Hotels, ex-chief executive of Safestay and an adviser to private equity funds on hospitality investment opportunities, said: “I am delighted to join Supercity Aparthotels, which is a leading brand, owner and operator in the emerging aparthotel sector. I look forward to supporting the growth ambitions of the company as we seek real estate-backed opportunities that meet our investment criteria.”
Experienced operators to open pub at former horse hospital in Camden: A trio of friends who have been in the hospitality trade collectively for 30 years have announced they will open a pub in a former horse hospital in Camden. The Farrier is set to open in January at the grade II-listed building in Camden Stables Market under the guidance of George Hartshorn, Chris Gibson and Ollie Patterson. Its focuses include natural wines and Sunday roasts from HG Walter for customers to carve themselves. The food offer will be led by Ash Finch, who has previously worked with Marcus Wareing and Alain Ducasse, and at Wild Honey. Dishes on the menu include game pie, beef fat cured mackerel, wild smoked pigeon and salt-baked squash. Camden Brewery will provide beer and wines will include British sparkling and lesser-known orange wines and rare low-production reds. A restored vintage Celestion hi-fi system will place music at the heart of the venue. Hot Dinners reports the hidden courtyard will feature outdoor heating and a fire pit.
Berry Bros & Rudd forecasts 13% fall in turnover due to coronavirus, undergoes refinancing: Wine and spirits merchant Berry Bros & Rudd has said it expects turnover to fall about 13% in its current financial year as a result of the coronavirus pandemic. The company also revealed it underwent a refinancing in July that was used to repay a loan used for the development of its 62-63 Pall Mall shop and terminate an uncommitted bank overdraft facility of £5m, replacing them with a fixed term loan, secured against property of £25m and an asset-backed loan secured against UK inventory. As a result of the coronavirus pandemic, the company implemented a business-wide purchasing freeze as way as taking “active steps to strengthen our financial position to guarantee the long-term viability of the business”. The company provided the update in its accounts for the year ending 31 March 2020, where underlying group sales and operating profit hit its highest level since 2010. Group sales were £220.5m before the accounting adjustment for En Primeur, compared with £219m the previous year. It reported a pre-tax loss of £590,000 compared with a pre-tax profit of £740,000 the year before. Berry Bros & Rudd can trace its roots to 1698 and first supplied the royal family with its products in 1760 during the reign of George III. The company established its operation in Basingstoke, Hampshire, in 1967.
Refugee chef opens permanent Syrian food site in central London: Syrian chef Imad Alarnab has opened his first permanent restaurant in Kingly Court in London’s Soho. Imad’s Syrian Kitchen has taken over the space that was previously home to Darjeeling Express before the Indian restaurant concept relocated to Covent Garden. Alarnab has reached 99% of his crowdfunding scheme to raise £50,000. The chef, who ran two restaurants plus several juice bars and cafes in Damascus, said: “After four years, I am so very excited that I am now finally going to open my own restaurant in the heart of London, the city I, and my family, now call home. Losing my restaurants in Damascus was devastating but I am so happy that I can now bring my Syrian cooking to Kingly Court in Carnaby, to the people of London who have supported me so much over the past few years.” Alarnab came to prominence in the capital four years ago with his charity events, supper clubs and pop-up venues. On the menu, customers can expect to find Syrian mezze, including falafel, as well as main and sharing dishes such as Fattet Macdous – crispy baby aubergine stuffed with lamb, topped with crunchy flatbread and a garlic cumin sauce.
CPP Investments takes ownership of Trafford Centre: Canada Pension Plan Investment Board (CPP Investments) has taken ownership of the Trafford Centre in Manchester through its wholly owned subsidiary CPPIB Credit. It took ownership of the mall, which has 50 food and drink businesses on-site, by exercising its share rights as the main secured creditor of the asset’s owner, Intu Trafford Centre Group, which was placed into administration in June and, although a sales process was initiated, there were no viable bids received at the time. The value of the deal was not disclosed due to its nature as a share right exercise but is thought to be around £800m – significantly below the Trafford Centre’s last valuation of £1.2bn before Intu Properties collapsed. CPPIB Credit managing director and head of real assets credit Geoff Souter said: “The Trafford Centre is one of the UK’s top five shopping centres, welcoming more than 30 million shoppers annually, and counts many leading global retailers among its occupiers. While conditions for retail in 2020 have been very challenging, we are able to take a long-term view and believe that, with strategic management and investment, the Trafford Centre has strong prospects.”