The Restaurant Group has shelled out £14.9m to acquire Food & Fuel Ltd, catapulting it firmly into the premium end of the pub market.
Food & Fuel consists of 11 leasehold pubs and café bars predominately situated in affluent London neighbourhoods and providing a premium offering tailored to local markets.
The 11 sites generated EBITDA of £1.9m in their last full financial year and TRG bosses expect it to provide a major boost to the company’s pub division.
“We expect there to be synergies from areas such as purchasing and central costs and an opportunity to continue to grow the business via data driven customer insights and sharing experience and learnings from the existing Brunning and Price operation,” the company said in a statement.
TRG, which runs more than 500 pubs and restaurants, anticipates that it will generate a mature company EBITDA run-rate of £2.3m for the 11 sites. With this scale of operation in London, it intends to exploit further expansion opportunities within London, including the possible conversion of some of its existing sites.
TRG’s Pubs business has continued to outperform the pub restaurant sector in the current year.
A combination of a stable and attractive customer base and demographics, defensible and well-invested locations and a localised business model with strong operational execution has created a “fundamentally robust” operation, according to the firm.
During the year TRG broadened its bespoke events offering, including its gin and prosecco festivals, and optimised existing trading space via private dining rooms, function spaces and improved the amenities in some of its gardens and terraces.
It anticipates additional revenue opportunities via accommodation and plans to open its first pub with accommodation this month.
In May it acquired Ribble Valley Inns, which consisted of four leasehold pubs, providing a good opportunity to expand further into the north-west of England.