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UK Leisure Sector - Q4 2018


Click here to download the UK Leisure Sector - Q4 2018


Q4 2018 witnessed another burst of transactional activity in the UK leisure property sector. Notable group sales included 22 pubs let to Marston's and owned by NewRiver, sold to a private equity investor; Aprirose sold 15 former Mitchells and Bulters' units to Marston's; and nine Revolution freehold investments are being marketed with an asking price of £20.2m from owner Aprirose. In addition, NewRiver have acquired 76 tenanted public houses at an unconfirmed £12m from Heineken.

Chief Executive of Greene King, Rooney Anand, will step down after 14 years of service on 30th April 2018. Nick Mackenzie has been newly appointed, joining from Merlin Entertainments.

Burning Night Group, after going into administration in October 2018, with debts of £11.2m, was recently bought out by a special purpose vehicle created by Access Commercial Finance, saving 300 jobs.

Positive news within the restaurant market with many companies reporting an increase in turnover and sales. However, for some operators sales growth has not meant an increase in profits; both Azzurri Group (sales up 8.5%) and Turtle Bay (increase of 7% in revenue year ending 24th February 2018) experienced this, citing an increase in base costs. Turtle Bay specifically mentioned the increase in the national minimum wage and business rates. Also the company's investment in Germany and subsequent exchange rates movements as reasons for the decline of EBITDA to £12.1m from 14.4m in 2017. Some parts of the fast casual dining market have seen an increase in sales, such as Shake Shack by an exceptional 99%, however, the pre-tax losses increased.

The Restaurant Group has completed the acquisition of the share capital in Mabel Topco, who is the owner and operator of Wagamama restaurants, for £559m. The Restaurant Group have outlined that 15 existing units will be converted into Wagamama units with a potential for a further 40-60 unit expansion.

Q4 also saw the EU's approval, under the EU Regulation merger, of Whitbread's sale of Costa Coffee to Coca-Cola; which completed at the start of this year for £3.9bn.

Happy New Year to all. Here's to a successful 2019 across the sector.


UK Leisure Sector Q4 2018 Highlights

October 2018 -

Pubs: Marston's acquire 15 former Mitchells & Butlers' pubs from Aprirose.

Pubs: 11 Antic public houses put to the open market out of their 48 London based estate.

Pubs: Aprirose have instructed Fleurets to dispose of nine Revolution freehold investments with an asking price of £20.2m reflecting a net initial yield of 6.78%. Locations include Wolverhampton, Huddersfield, Newcastle-under-Lyme, Lancaster, two in Manchester, Leicester, Liverpool and Lincoln.

Pubs: NewRiver sell 22 public houses, let to Marston's, to a private equity investor for £14.8m with an estimated net initial yield of 5.6%.

November 2018 -

Pubs: Ei Group reports an increase in like-for-like managed sales at 7.1% for year ending September 2018.

Pubs: Marston's report a turnover increase of 15% to £1.14bn and an increase of 4% in underlying profit before tax at £1.04m.

Restaurants: Shake Shack's turnover increased by 99% to £21,367,650. Pre-tax losses increased to £7,748,120 from £4,545,106.

Restaurants: Azzurri Group - Sales increased 8.5% to £279.8m

Restaurants: Loungers announce like-for-like sales increased by 6% with pre-tax profits increasing from £3.2m to £5.6m. Loungers operates under the Lounge and Cosy Club brands.

Hotels: LXI REIT has acquired five Travelodge hotels at £45.2m. Total number of rooms 378 (£117,000 per room), with a yield of 5.8% net of acquisition costs.

December 2018 -

Pubs: Heineken agrees to sell NewRiver 76 tenanted pubs estimated at £12m.

Restaurants: The Restaurant Group complete the acquisition of Mabel Topco, who own and operate Wagamama.

Restaurants: Nando's reported an increase in sales to £969.3m (£847.9m - 2017) and 29 new openings this year, totalling 937 units as of 25th February 2018.