Companies and results
Kaye out for bigger pizza the action
Catering to the taste buds of middle England is in the blood of Jonathan Kaye, who as chief executive of Prezzo is preparing for the opening in York of the Italian chain’s 200th restaurant.
Diners at its eateries nationwide will be taken back in time later this month to sample dishes on the original menu and at retro prices from when the first Prezzo opened in London in 2000.
Although Kaye throws in the caveat “providing it is financially viable”, the company looks well-positioned to take the strain having served up an 11% rise in adjusted pre-tax profit last year to £20.4million.
The 35-year-old’s family has been at the forefront of shaping the UK’s casual dining experience over the past half century.
His late father Reginald and uncle Philip launched the Golden Egg chain in the 1960s, which was followed by Deep Pan Pizza and Garfunkel’s, Philip’s sons Sam and Adam founded the Ask and Zizzi chains and having sold these are now operating AIM-listed Tasty’s Dim T and Wildwood restaurants.
Jonathan, who started washing up in a London restaurant at the age of 13, was studying politics at Leeds University when he decided to learn from his uncle the vital ingredients of an exciting and potentially lucrative business.
It is one thing to be working exceedingly hard and making money but another to be working exceedingly hard and haemorrhaging money
Recalling the early days of Prezzo he says: “You have six or seven restaurants and half are losing money. You work day and night to keep them going. It is one thing to be working exceedingly hard and making money but another to be working exceedingly hard and haemorrhaging money. It can be a dark place.
“It was in the balance for the first few years. Then things started to turn as we acquired better units. We get ideas from rivals. I am not a good cook but I eat out all the time and I instinctively know what will sell and what we can deliver consistently. I approve every dish that finds its way on to our specials menu.”
Bachelor Kaye believes Prezzo’s “excellent team of hands-on managers” continually checking food and premises standards give it an edge.
He says: “If you look at failed restaurants it is generally because they have taken their eye off the ball. It is all very well having a nice menu and good offer but if you cannot deliver consistently you won’t be successful.”
Kaye believes Prezzo can double its number of restaurants, opening 30 a year and growing to the size of PizzaExpress. He is also in the running for at least some of the 50-plus Strada Italian restaurants that are being sold by Cafe Rouge owner Tragus.
The Daily Express
Ramsay nightmare as chef loses £6m on pub
Gordon Ramsay’s restaurant empire has served up a £6.4m loss after taking a hit on its York & Albany pub and hotel in north London.
Accounts to be published this week will show that his Kavalake group fell into the red after making a £2m profit a year earlier. The swing was due to one-off costs totalling £9m, with the lion’s share, £6.7m, relating to a provision on the York & Albany lease, signed in 2007.
Ramsay is pursuing legal action over the contract, disputing the validity of the lease. The site’s owner has described the claim as “absurd”. The exceptional costs of Ramsay’s company also include £2m of legal expenses.
Sales across his business rose 4% to £44.8m in the year to last August while earnings before interest, tax and other charges climbed 3% to £5m.
Trading is understood to have remained buoyant this year, encouraging Ramsay to embark on an overseas expansion. He is planning a string of outlets in Asia.
In Hong Kong, Ramsay will open a branch of his Bread Street Kitchen restaurant, while new venues are also planned for Singapore and Macau.
Closer to home, Ramsay is poised to announce a new restaurant just off Regent Street in London. He is also due to open a venue this year on the site of his debut restaurant, Aubergine, in Chelsea.
The chef’s business partner Stuart Gillies said there was “no reason why we can’t do 50 new restaurants over the next five years”. They are looking at more venues in America after the success of three outlets in Las Vegas, including a pub and grill at Caesar’s Palace.
The business has come through a turbulent time, with Ramsay parting company with Chris Hutcheson, his father-in-law and then business partner, in 2010. A legal feud between the pair was settled in 2012.
Last year Kavalake refinanced its loans, with Barclays replacing Royal Bank of Scotland as its main lender.
The Sunday Times
McDonalds in top 10 of foreign employers
McDonalds UK is ranked 10th in the Sunday Times Inward Investment Track 50 - a league table of foreign multinationals by the number of staff they employ in the UK.
The fast-food restaurant operator is listed as having 18,784 UK staff out of a total 1.9m employees worldwide.
The home of the Big Mac celebrates its 40th birthday in Britain this year. It employs almost 100,000 people at its 1,200 UK restaurants (as at December 2013), which would put the company second in the Inward Investment Track 50, behind Walmart’s Asda. However, our estimate for its UK staff excludes franchisee staff and adjusts for the 86% of the workforce that are-time to give a full-time equivalent.
The Sunday Times
Brewdog profits triple as craft revolution gains strength
Maverick craft beer firm BrewDog – which boasts Punk IPA and the world’s strongest beer Tactical Nuclear Penguin at 32 per cent among its brands – has reported a 70% increase in sales and a tripling of profits for 2013.
The Scottish firm, which employs about 300 staff, recorded a pre-tax profit of £2.3m on £18m sales for the year in which it opened a new brewery in Ellon, Aberdeenshire.
This raised production capacity from 2.5 million litres to 25 million. It also opened three bars, one in Sweden.
James Watt, who founded BrewDog with Martin Dickie in 2007, said: “2013 was a brilliant year for us. While tired pubs are facing closure and big breweries report disappointing sales, the craft beer revolution has never been stronger.
“Our growth shows just how much the UK beer scene is changing. And we are determined to change it much, much more.”
BrewDog is already investing in a £4m expansion of the new brewery and will open 11 bars this year. It is moving into the off-licence market too and will open five shops this year.
BrewDog is in part funded by a crowdfunding scheme ‘Equity for Punks’, which completed its third round in 2013 raising £4.3m in less than six months.
More traditional brewers saw steadier growth. 175-year-old Stockport brewer Robinsons in Greater Manchester saw sales rise slightly to £58.6m in 2013 while profits dipped to £3.1m.
Cornish brewer St Austell revealed steady profits of £10.4m on a turnover of £116.6m.
The Mail on Sunday
Fuller’s hails ‘beer renaissance’ for record annual performance
Britain’s “beer renaissance” helped London brewer and pub group Fuller, Smith & Turner post record results as its beer division bounced back after a tricky 2013.
The group’s focus on craft beer – and fancy cider – has started to pay off, according to Simon Emeny, chief executive.
Last year, Fuller’s introduced an upmarket craft lager and has also signed a distribution deal for Sierra Nevada, the American craft beer.
Drinkers have started to spurn standard lagers and opt for premium, specialist beers, triggering a craft beer boom that has led to a surge in hop prices – a key ingredient for beer.
The broader recovery in Britain’s pub sector helped volumes in Fuller’s brewery division grow 1% for the year to March 29, reversing some of last year’s drop.
Sales in the brewing division got off to a flying start for the next year, up 10% year-on-year for the nine weeks to May 31 as Mr Emeny hailed Britain’s “beer renaissance”.
Last year’s decision by the government to scrap the “beer duty escalator” – which pushed up prices by 2% points above inflation – has helped drive this recovery.
“It was a difficult recession for the industry,” Mr Emeny said. “A number of big customers had a tough time. In the last six months those companies have picked up.”
Fuller’s, which has the bulk of its pubs inside the M25 motorway, has performed better than the rest of the sector during the downturn and this trend showed little sign of stopping.
Like-for-like sales in Fuller’s managed pubs leapt 8.3% as the pub group posted revenues of £288m – well ahead of the rest of the sector.
Fuller’s opened its first airport pub at London’s Heathrow during the period. The pub group has focused on opening pubs near stations and other transport hubs in recent years, recently splashing out on a location in King’s Cross. But the pub group also stuck to its riverside roots – it has been based by the Thames in Chiswick since 1845 – and bought two freehold pubs by the river.
Earlier this week saw the end of a protracted debate about the future of tenanted pubs in the UK, with the government opting to introduce a statutory code of conduct for pub groups.
Mr Emeny said the legislation – which does not affect Fuller’s, as it has fewer than 500 tenanted pubs – had positives and negatives. “It does draw a line under this and give the industry some certainty,” he said. “I just don’t think it was necessary to legislate.”
Pre-tax profits rose 1.8% to £34.1m for the year. The pub group increased its dividend 11% to 9.3p.
The Weekend FT
Beastie Boys celebrate copyright victory over Monster Energy
The Beastie Boys have fought for their rights, not to party, but to damages from an energy drinks manufacturer that used their songs without permission or payment.
The Eighties hip-hop group were awarded $1.7m (£1m) in a copyright infringement case against Monster Energy, which admitted making unauthorised use of their music in a video that appeared online for five weeks.
Adam “ad-Rock” Horovitz and Michael “Mike D” Diamond, the two surviving members of the rap trio, testified at the eight-day trial in New York after the defendants insisted that no more than $125,000 should be owed.
The pair said they would never agree to their songs being used in commercial advertising and are protective of revenue from their music.
Jurors decided that $120,000 should be awarded to the Beastie Boys for each of 10 copyright violations. Monster was ordered to pay another $500,000 for using the group’s persona without permission, wrongly suggesting that they endorsed the drinks products.
Reid Kahn, a lawyer for Monster, said the company would appeal the ruling.
Filed in August 2012, the lawsuit concerned an online video promoting an annual snowboarding competition the company organises and sponsors in Canada called “Ruckus in the Rockies”.
The video, which Monster uploaded to YouTube, featured the competition and an after-party attended by DJs, including Z-Trip. It included a remix by Z-Trip of Beastie Boys songs, including “Sabotage”, “So Watcha Want” and “Make Some Noise”.
The Independent
Legislation
New rules could cut beer prices or close 500+ pubs
More than 500 pubs could close as a result of Government plans announced last week to give landlords greater power to negotiate with pub groups, according to the Department for Business.
The figures were leapt on by critics of the plans. But supporters of the reform, led by the Campaign for Real Ale (CAMRA), claimed the plan could cut 60p from the price of a pint of beer.
What is clear is that after four Parliamentary select committee inquiries, two Parliamentary debates, a Government consultation, an Office of Fair Trading investigation and countless slogans printed on the back of millions of beer mats, the question of how pubs should be run is no closer to being resolved.
Under the plans laid out last week to govern the relationship between pub groups and tenant landlords, tenants could ask for a rent review, go to an independent adjudicator if they feel the rent is unfair and could choose whether to share slot machine profits with pub owners.
While the Government resisted calls to axe the tie altogether in the code, Greg Mulholland, Liberal Democrat MP for Leeds North West and member of the Parliamentary group Save the Pub, is expected to table an amendment to the reforms, making it mandatory for pub companies to offer a ‘free-of-tie’ option. That would free landlords from the obligation to buy their beer from the group that owns the pub.
Proponents of the tie say that it allows tenants to rent a pub for less and that they gain from technical support and industry know-how, while critics say it forces tenants to pay more for their beer.
JD Wetherspoon chairman Tim Martin, whose own estate is managed, rather than tenanted, told The Mail on Sunday he “felt sorry for the tenants of Punch and Enterprise, who historically had a very, very rough time of it before the companies changed, and for the regional brewers who were looking after tenants, but who have now been caught up in all this”.
Industry moves to put its house in order by banning upwards-only rent reviews and appointing an independent adjudicator were seen as too little, too late, hence the legislation.
While it was described by the British Beer and Pub Association and pub groups such as Enterprise, Punch and Fuller’s as ‘disappointing’, groups such as CAMRA were delighted.
It said pints would become cheaper by 60p – a claim questioned by other parts of the industry – and added: “Thousands of licensees will be protected from unfair practices and our pubs protected. Many thousands of pubs have been lost as big groups squeeze them out of existence with sky-high rents and beer prices.”
The GMB union and Fair Pint Campaign also welcomed the code, which Business Secretary Vince Cable said would make things “fairer”.
However his own figures show that at best 52 pubs would close, at worst 536 due to being considered economically unviable. With 28 pubs already closing every week there are only about 50,000 pubs in the country compared with some 70,000 in 1982.
Now all eyes are on what will happen to the code as it becomes law.
The Mail on Sunday
Economy
Plastic card usage trumps cash payments
Spending on plastic cards topped £0.5trillion for the first time last year, as shoppers moved further away from cash.
Debit and credit cards were used for three in every four pounds spent in shops in 2013 – up from two in every four just a decade ago.
The UK Card Payments 2014 report published yesterday reveals that Britons spent £520bn on UK goods and services using their debit and credit cards last year – a rise of 6.7% since 2012.
Card spending has more than doubled over the last decade, climbing from £244bn in 2003.
Debit cards can now be found in the wallets of 91% of UK adults, while the average transaction value for all debit card purchases in 2013 stood at £44.02.
The average debit card was used to make 94 purchases in 2013. Meanwhile around 38% of debit card holders own two or more cards.
Melanie Johnson, Chair of The UK Cards Association, said: “With three in every four pounds spent in British shops now paid with cards, these figures reveal a huge shift over the last decade in the way we chose to transact. Rather than carrying cash, consumers are increasingly opting for their cards instead; not least because of the extra protections available.
“The rise in online shopping, coupled with increasing momentum behind contactless cards, will likely see this trend in consumer behaviour continue.”
There are now 175.6 million plastic cards in issue in the UK: 95.7 million debit cards, 55.4 million credit cards, 18.2 million ATM-only cards, and 6.3 million charge cards.
The annual value of card payments is expected to climb to around £874bn by 2023.
The Independent
Food & Drink
The coffee with four times your daily sugar limit
There are few things more refreshing than an ice-cold drink on a hot summer’s day.
But order one from Starbucks and you could be downing nearly four days’ worth of your recommended maximum sugar intake in minutes.
A large mocha cookie crumble frappuccino made with whole milk and whipped cream contains 105.6g of sugar – or 26 teaspoons.
Just 10.6g of this is the naturally occurring milk sugar, lactose.
The rest (95g, or 24 teaspoons) is added sugar, meaning the 695-calorie drink contains more added sugar than three Mars Bars and more than half of a woman’s recommended intake of saturated fat.
The NHS says added sugar shouldn’t make up more than 10% of a person’s energy intake – 50g (12 teaspoons) for women and 70g for men. But the World Health Organisation says this should be halved to 5 per cent of a person’s total calories.
Nutritionist Katharine Jenner said: “It is reprehensible to have a drink that contains the equivalent of 24 teaspoons of added sugar – imagine adding that to a cup of coffee.
“This is four times the recommended maximum for added sugar. Added sugar causes obesity, type 2 diabetes and tooth decay. How can anyone be expected to have a healthy diet where there is so much sugar hidden in a single drink?”
Iced drinks at other high street coffee chains contain similarly high levels of sugar.
At Costa, the medio Belgian chocolate creamy cooler made with whole milk has 497 calories and 59.4g of sugar, of which just 8.9g is lactose.
A Caffe Nero coconut and chocolate frappe crème packs 55.4g of sugar and 516 calories, while at McDonald’s, a large chocolate chip frappe has 490 calories with 55g of sugar, of which just 7g is lactose.
The Daily Mail
Secret of a great G&T – a heavier glass
If you insist on having your gin and tonic served in a fine glass tumbler, then you might on the right track.
Because drinks really do taste better when they are in a heavier glass, an Oxford University professor has found.
Although your choice of container has no effect on the way tastebuds pick up the drink’s flavour, the experience of drinking out of a heavier glass alters the way the brain processes the taste.
So when you drink something out of a high quality glass, rather than a plastic beaker, it will taste significantly better.
Experimental psychologist Professor Charles Spence said: “We like heavy containers. We associate them with better quality, it has greater worth. If you want your guests to enjoy their G&Ts, then make sure they have a heavy glass, not a plastic one.”
Professor Spence, who will speak at the Cheltenham Science Festival today, added: “If you drink beer out of a bottle, it tastes better than from a can.
“That is because it is heavier in the hand and people associate it with higher quality. Although it is a matter of perception, people really do believe it tastes better.”
The Daily Mail
Forget champers… try a drop of Sussex
Ignore the champagne and crack open a bottle of White Cliffs or Sussex instead.
That’s the future hoped for by drinks industry chiefs, who are looking to give English sparkling wine a name that’s, well, a little more sparkling.
Although our award-winning bubbly tastes, looks and smells like champagne, European rules say only sparkling wine made around the French city of Reims can use the name.
Environment Secretary Owen Paterson has said the term ‘sparkling wine’, is too wordy. The Duchess of Cornwall claimed last year that the name should “have something with depth”.
One idea is Merret, after the 17th Century scientist Christopher Merret, who made champagne decades before the Benedictine monk Dom Perignon.
Albion, the ancient name for Great Britain, and Britagne have also been suggested.
But Mark Driver, of the Rathfinny Estate in Alfriston, East Sussex, said: “We intend to stick to the geographical designation.
In 10 years’ time, people will ask for a glass of Sussex not champagne. I want people to ask for Rathfinny like they ask for a Bollinger.”
The Mail on Sunday
