Click here to download the UK Leisure Sector - Q4 2016 summary
The final quarter of 2016 has seen political change across the pond in the United States of America as well as an emerging picture of how the United Kingdom's decision to leave the European Union will be implemented by the Government.
Notably in this quarter, though there has been an increase overall in leisure tourist visitors, there has been a decrease in overseas visitors in comparison to the same period last year. However, owing to the continuing surge in strength of the US Dollar and lingering weakness of Sterling, the levels of overseas visitors may yet increase to take advantage of this situation. The results being that more domestic visitors are choosing to holiday within the UK, spending at home as UK destinations increase in relative competitiveness; a trend that is being bolstered by Whitehall's "Tourist Action Plan". Though to date there has not yet been a definitive tourist surge post referendum, visitor numbers would not immediately respond to global macro-economic trends.
The market has been active and readily liquid for company transactions. Most recently during December, Punch Taverns' board accepted a takeover bid from Heineken and Patron Capital Advisors LLP at a figure of £402.7 million, highlighting that British public houses remain attractive to investors. A large proportion of the public houses within the UK will now be owned by Heineken, adding to the Star Pubs and Bars estate they acquired from Royal Bank of Scotland in 2008.
Enterprise Inns cited decreasing financing costs for the strong year end, turning around a loss of £65 million to £71 million profit after tax. A restructure to smaller more controllable estates have also aided this.
It will be intriguing to see what the first quarter in 2017 brings in the lead up to the triggering of Article 50 and further developments in the Government's Brexit plans.
UK Leisure Sector Q4 2016 Highlights
October 2016 -
Pubs: Enterprise Inns stated net debt had decreased and profit after tax increased to £71 million in comparison to 2015 at £65 million loss.
Restaurants: Boparan Restaurants, owner of Giraffe Concepts, have acquired Ed's Easy Diner in a pre-pack administration.
Restaurants: Giggling Squid have achieved a 55% increase in sales this year of £11.8 million.
November 2016 -
Restaurants: Shepherd Neame acquired Village Greene Restaurants for £11.85 million consisting of five freehold sites within Kent.
Pubs: Fullers acquired two managed units; The Gun, Docklands and The Half Moon in Herne Hill. Both units have boutique hotel rooms which will further support the like for like sales increase of 3.4% of their managed division.
Pubs: Mitchells and Butler placed 75 public houses on the market.
Hotels: Cairne Group acquired five hotels off a guide price of £75 million from Hotel Collection Portfolio. Locations include Durham, Stirling, Harrogate, Cardiff and Brighton. The group is based in Newcastle and has a 3,000 bedroom estate.
Hotels: Hotel occupancy levels have increased to 86.1% (up 5.4% from Nov 2015) and with the London Market the highest RevPAR rate in the month of November since 1994 at £131.78.
Leisure: Overall visitors have increased by 700,000 within the UK but a continuing decline in overseas visitors.
Restaurants: Gourmet Burger Kitchen increased pre-tax profit to £3,328,000 in comparison to 2015 figure of £1,114,000.
December 2016 -
Pubs: Revolution Bars Group opened four new sites in November and December 2016 to coincide and benefit from the Christmas trading season.
Pubs: Redcombe opened their casual dining venture in Paddington Basin redevelopment. £1.3 million has been invested in the 3,700 sqft unit named Lockhouse.
Leisure: Park Holidays UK (previously owned by Caledonia Investments) has been bought for £362 million by Tiger Bidco; an SPV of Intermediate Capital Group.
Restaurants: HungryHouse has been acquired by Just Eat, from Delivery Hero.
Pubs: Punch Taverns takeover bid was accepted, from Heineken and Patron Capital Advisers LLP at £402.7 million. An unsuccessful rival offer was made by Emerald Investment Partners.
Pubs: Lion Capital has purchased the majority stake in Loungers for £137 million.
Restaurants: The restaurant group Bistrot Pierre has reported to have substantially grown turnover at the year end resulting in a 18% increase in comparison to last year.
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