Various Eateries quadruples revenues as hospitality rebounds

Viktor Tchakalov
Vox Newswire
13:25, 23rd June 2022

Consumers are going out again, good news for Various Eateries (VARE Follow | VARE), operator of restaurant, clubhouse, and hotel sites in the UK, which today revealed half-year sales of £17.8m for the period ended 3 April 2022, a 439% increase from the £3.3 it managed in H121.

The strong rebound was driven by new site openings and renewed demand for restaurant and hotel services as Covid restrictions relaxed throughout 2021. Various Eateries reported significant demand for weddings and other large events during the period, and is now looking to acquire large premium venues that can serve several purposes throughout a day.

While Covid-related Plan B measures did impact the holiday season - with an estimated £3b lost in the industry nationwide - recovery has been swift since measures were lifted. Various Eateries reported a successful opening of a Coppa Club in Putney, as well as a new pasta-only concept "Noci" opened in Islington to positive reviews so far. Additionally, the company reported strong like-for-like hotel room revenue, up 19% on 2019, driven by higher average room rates.

Various said that the performance since the period end is in line with expectations for the full-year. It opened Coppa Club Haslemere in May with good initial results, and expects to open Coppa Club Bath late in the summer. Several other sites are in advanced negotiation.

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Restaurant industry recovery

The improved trading at Various Eateries comes on the heels of a string of reports in the industry, detailing ambitious expansion schedules and strong results amid pent-up post-pandemic demand.

Restaurant Group reported continued strong performance across its portfolio in a recent trading update for the 19 weeks to 15 May 2022.  Sales increases across its Restaurants, Pubs, and Leisure businesses were +15%, +10% and +6%, respectively, and it also pointed to a strong ongoing recovery of its Concessions business. Although it warned of 9-10% inflation in food and drink in FY22, it's still planning to put its £220m of  cash headroom to work opening at least eight Wagamama restaurants and three delivery kitchens in FY22. It has £220m of

Fulham Shore, owner of Real Greek and Franco Manca restaurants, recently updated on results for the first two months of its FY22. It reported 10 new restaurant openings in FY21, with 11 new locations on track to open in FY22, and a plan to open a total of 18 sites before the end of FY22. The company's aggressive expansion program benefits from historically low rental levels in its target locations, and it has balance sheet headroom of £19m combined cash and undrawn bank facilities to fund it. Fulham Shore also reported continued growth in customers, with 140,000/week now served across its two chains.

Tortilla Mexican Grill, the largest Mexican restaurant group in the UK, recently opened a new location in Portsmouth, and announced its acquisition of Chilango for £2.75m. Chilango has 8 locations in the UK (6 in travel Zone 1 in London). The acquisition is part of Tortilla's plan to open 45 new sites in the UK over the next 5 years, excluding Chilango's eight.

Conclusion

Shares across the sector remain in the doldrums, and the risk of an imminent economic slowdown could still hit consumer spending. But evidence suggest experiences are being prioritised over good, and the clear trend in the industry is aggressive expansion to capitalise on this pent-up demand. Operators, meanwhile, are becoming more adept at navigating labour shortages, a 40-year high CPI inflation of 9-10%, and soaring energy prices. Various Eateries 

CEO Yishay Malko summarised the current market trend: "Outside of the impact of the [Covid-19] 'Plan B' measures over the festive period, which affected the entire industry, we are pleased with the performance, with trading remaining resilient despite the challenging macro-economic environment.
...
The macro-economic challenges our industry faces have been well publicised; inflation and cost of living pressures are increasing in severity, while labour shortages remain a headwind. However, the team are conscious of these challenges, and we believe we remain well positioned to navigate them as we drive forward the continued growth and development of the Group."

Follow News & Updates from Various Eateries: Follow | VARE  Restaurant Group: Follow | RTN Fulham Shore: Follow | FUL Tortilla Mexican Grill: Follow | MEX

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