Click here to download the UK Leisure Sector - Q1 2018
A mixed start to 2018:
The first quarter of this year has seen substantial growth in turnover figures relating to the pub and late-night bar sector, especially within December, from the likes of Redcomb Pubs, Barworks and Deltic Group. However, this has not been reflected in the middle market restaurant sector with news of the restructuring of Carluccio's, Jamie Oliver Restaurant Group and, most recently, Prezzo having Compulsory Voluntary Arrangements approved.
Freehold pub prices have increased by 14.6%, driven by fewer individual deals and more portfolio deals in 2017. The pub market has seen good activity with sales of companies; Scottish brewer, Brewdog, acquired Draft House with 13 London-based units, and Fuller's purchasing Dark Star Brewery.
There are now more than 2,000 breweries in the UK, rising by 64% in over 5 years, due to the increase in popularity of craft beers. Another will be added to this shortly, as Charles Wells has submitted plans for a £13m investment in a 30,000 hectolitre brewery, pub and visitor centre just outside of Bedford.
Hotels have seen large transactions take place countrywide, with a large amount of investment happening in 2017 reaching £5.4bn. 44% of this is from international purchasers at £2.4bn. This is set to continue this year; Starwood Capital acquired seven Hilton hotels for £135m from Park Hotels & Resorts. In addition Starboard Hotels acquired four Ibis Styles hotels, comprising of 507 rooms, from troubled construction firm Carillion.
There has been renewed interest in the leisure activity market; ten pin bowling has seen an uplift in growth of 28% since 2012; a wider audience is now targeted looking at attracting adults, not just children. The projected figure, for this year, spent on all leisure activities is £129bn, an increase of over 17% when compared with five years ago highlighting this sector's potential growth.
Next quarter we will hopefully see opportunities arise from the results of the Compulsory Voluntary Arrangements actioned in the restaurant market, with units closing. This sort of shift in the market can bring opportunity for smaller, newer operators with innovative ideas.
UK Leisure Sector Q1 2018 Highlights
January 2018 -
Restaurants: Byron announces a restructuring plan involving Hutton Collins to sell half of its existing holding to Three Hills Capital Partners; making them the majority shareholder.
Restaurants: Brasserie Bar Co have increased turnover by 14% for the year ending 31st July2017 to £46.8m, with EBITDA up by 23.7%.
Pubs: Coaching Inn Group reports an increase of 7.8% during December on like-for like sales.
Pubs: Redcomb Pubs reports an increase in December sales, like-for-like growth of 12.6%.
Pubs: Barworks have increased turnover by 15.6%, with adjusted EBITDA increasing to £1,410,678 from £1,122,082 equating to a surge of 25.7%.
February 2018 -
Restaurants: Prezzo owned by TBG Capital private equity firm prepares to launch a CVA.
Hotels: Park Hotels & Resorts sell seven Hilton Hotels to Starwood Capital Group for £135m totalling over 1,300 bedrooms, including: Hilton London Islington, Hilton Bath City, Hilton Edinburgh Grosvenor, Hilton Belfast, Hilton Blackpool, Hilton Milton Keynes and Hilton Coylumbridge.
Leisure: Ten Entertainment acquires two sites in Chichester and Warrington totalling 42 sites, as well as reporting a total sales increase to £71m, an increase of 5.5% (in 52 weeks vs 53 weeks to 31st December 2017) with adjusted net profit before tax increasing to £13m, up on 18% from last year.
March 2018 -
Restaurants: Carluccio's hires restructuring experts to look at the finances of the company.
Restaurants: Prezzo's CVA proposal approved, 94 units will close.
Leisure: Everyman Cinemas has reported an increase in re venue for year ending 28th December 2017 by 37% (£40.6m). Three sites have been opened in 12 months and contracts exchanged on an additional nine sites.
Leisure: Gym Group reports an increase in revenue of £91.4m up 24.3% with expansion plans for 15-20 new units within 2018.
Leisure: Conviviality intend to appoint administrators after failing to raise £125m. It owns drinks wholesaler supplier Mathew Clark, Wine Rack, Bargain Booze.
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