15/07/2016
Click here to download the UK Leisure Sector - Q2 2016 summary
Summary
Q2 2016 will perhaps be remembered by most for the last week of the quarter, which became dominated by the result of the Brexit Referendum and the resulting political fall out. The previous 12 weeks of the quarter were perhaps slightly quieter than many which have preceded it over the last few years, but the UK leisure sector continued to prove resilient and attractive to both domestic and overseas investors.
Despite persistent fears over a slow down in consumer spending, many of the best operators posted positive sales growth. During the quarter Whitbread reported total sales up 12%, Young's - 10%, Patisserie Valerie owner Patisserie Holdings - 14%, Deltic - 8%, Stonegate - 13% and Fuller Smith & Turner - 9%. It is not surprising that with this positive sales story across the leisure spectrum, that M&A activity was buoyant.
The quarter commenced with the sale of Woodforde's (the Norfolk brewery) and Shearings the coach holiday operator). The quarter ended within the acquisition of the Liberation Group by Caledonia Investments and Bath Ales by St Austell. In between, Tesco found time to dispose of both Giraffe and Harris & Hoole, while Comptoir Group successfully floated on AIM and Graphite Capital purchased the New World Trading Company.
Whilst the ramifications of the Brexit vote will create uncertainty and doubt for some, the overriding sentiment appears to be one of business as usual for operators and service providers to the sector. Given the comparative weakness of sterling (GBP), the summer may even see record numbers of overseas visitors to the UK, with London likely to be a key destination, and therefore give a corresponding boost to spending in the leisure sector.
UK Leisure Sector Q2 2016 Highlights
April 2016 -
Hotels: Whitbread reports full year numbers for the 53wks to 3 March 2016. Total revenues are £2.92bn (+12%) whilst underlying profit is up b y 11.9% at £546.3m.
Pubs: Hawthorn Leisure, the Avenue Capital backed pub operator, acquires 11 pubs from JDW which will be its first fully managed sites.
Hotels: Lone Star Funds takes full ownership of coach holiday operator Shearings for an undisclosed sum.
Leisure: Eight Screen Odeon cinema in Taunton, Somerset, sells for £9.1m. London Metric Property sold the building to Asda P ension Fund reflecting a net yield of 5.5%.
May 2016 -
Pubs: Young's revenue for the year ending 28 March 2016 was £245.9m (+8.3%), driving a 9.6% rise in adjusted operating profit to £41m.
Pubs: Brewhouse & Kitchen acquires three freeholds from JD Wetherspoon in Chester, Wilmslow and Bedford.
Restaurants: Patisserie Holdings, the parent company of Patisserie Valerie and Baker & Spice, saw revenue in the six months to 31 March 2016 increase 14.4% to £50m. The company opened 12 sites in the period and currently operates a 177-strong estate.
Hotels: London & Regional expands its hotel operation with the purchase of Atlas Hotels' portfolio of 47 properties across the UK for £575 million from Lone Star.
Leisure: Deltic Group, the UK's largest operator of premium late night bars and clubs with 58 venues, reports sales growth of 8% in the year to 27 February 2016.
Leisure: All Star Lanes reports turnover grew by 3.1% to £14.5m in the year to 27 December 2015.
June 2016 -
Pubs: Greene King reports sales up 57.6% to £2,073bn in the year to 1 May 2016. Adjusted profit before tax rose 52.2% to £256.5m.
Pubs: Mitchells of Lancaster sells 11 sites to a new hospitality company Provincial Hotels and Inns.
Pubs: Shepherd Neame saw life-for-like managed sales rise 4.6% in the 49 weeks to 4 June 2016. The company also announced the purchase of eight freehold pubs from Enterprise Inns.
Pubs: Graphite Capital acquires New World Trading Company in a £50 million transaction. NWTC operates 14 venues nationally.
Restaurants: Tesco sells its coffee shop brand Harris + Hoole to Caffe Nero. Harris + Hoole has 43 outlets, including 29 in Tesco stores.
Restaurants: Comptoir Group, operator of the Comptoir Libanais and Shawa brands, announced its admission to trading on AIM, with a market capitalisation of £48m.
Restaurants:Tesco has confirmed the sale of the Giraffe restaurant chain to Harry Ramsden's owner, Boparan Restaurant Holdings Ltd. The sale comprises 57 restaurants.
Contact Details:
Graeme Bunn
Managing Director
T: 020 7280 4740
M: 07776 208085
E: graeme.bunn@fleurets.com
Martin Willis
Chairman
T: 020 7280 4700
M: 07774 671957
E: martin.willis@fleurets.com