By: Mike Savage
03.10.2016
From its inception in 1983 as Channel Express, flying fresh flowers across the channel, Dart Group’s logistical proficiency and market foresight have seen it evolve into what it is today.
On 17th November 2016, Dart confounded the skeptics who had been focused on the travails of airline peers – EasyJet, Ryanair – and tour operators – TUI, Thomas Cook – by reporting excellent interim numbers and endorsing an 11% upgrade to its numbers for the full year. The key driver for the companies growth continues to be its packaged holiday business, Jet2.com; voted TripAdvisor’s Top UK Airline, it has rapidly become the UK’s third largest package holiday provider with more than 5,000 employees. And with 50% of all flights now having one of Jet2’s holidays attached, the company will be expanding its traditional northern operations to Stansted by Easter 2017, with the new, larger Boeing 737-800s helping to fulfill enhanced demand. Furthermore, their major cost, the price of oil, has been hedged through to 2018 at attractive rates, and the shares remain attractively priced, keeping Jet2 a key holding in our Special Situations service.
Targeting the £10 diner
One of EY’s 2016 “10 Brands to Watch” in the Casual Dining space, a market currently valued by the same firm at over £4bn in the UK, the family of 11 Comptoir Libanais eateries (with two airport sites franchised to The Restaurant Group) are known amongst foodies as some of the best budget outlets in town. The group also has a secondary brand, Shawa, as well as two larger and more traditional Lebanese restaurants called Levant and Kenza. The offering is already popular with women and vegetarians, with the core target being cosmopolitan urbanites who, faced with full working days and busy schedules, are increasingly eating out throughout the week, and in many cases several times a day. “This is about the person with £10 in their pocket expecting to eat a good meal. They could go to Wagamama or to Yo! Sushi. These aren’t people who would traditionally go to a Lebanese place… that’s Comptoir’s opportunity”, enthuses Hanna. With average spend per head at around £14, versus £15 at a competitor like Pizza Express, “we want to make Lebanese as popular and accessible as Italian is today”.
A quiet food revolution
Since the first launch in 2007 the Comptoir management has been silently spearheading an Eastern Mediterranean food revolution in the mainstream market. With help from higher-end players in the category, such as Yotam Ottolenghi, the likes of sumac and hummus are far more likely to be found in kitchen cupboards sitting alongside their Italian counterparts. With an inherently healthy and vegetable based offering the group continues to grow a loyal customer base that is increasingly attractive to mainstream diners. Having just raised new funds of £8m from a recent, and highly successful, IPO (to give a market cap at 8 July 2016 of £48m), the management team’s expansion plans include a further 12 sites across the UK with Exeter, Bath, Oxford and Leeds due to open in 2016. Successful evolution under Hanna, from predominantly lunch to all-day eating, plus the larger number of covers, means a three or four year cash payback on a site that is typically around 3000 square feet and has fit-out costs of around £800,000. Already nicely profitable, with trailing earnings before interest, tax, depreciation and amortisation of £2.3m on £17.7m of sales to December 2015, Autogrill will take the existing concept to international airports globally with further franchising opportunities in the Middle East.
The vital ingredient
Looking beyond the numbers, Hanna believes the key to their success will be their culture. If the details matter, the staff who maintain them are everything. “The most important person to each business” professes Hanna “ is the Kitchen Porter. They make sure that there is no lipstick on the glasses – that everything is sparkling. It all starts with them”. New employees are met by Hanna or Kitous on their first day (both started their careers as porters) and there are clear rewards for meeting team profit targets. As a result, staff turnover of around 45% is way below industry averages. Comptoir Libanais may be all about the small details but the Killik & Co Special Situations team don’t expect it to be a small company for long.
Our Killik Special Situations Service has access to inspiring brands like Comptior and has peviously given clients access to fund raisings such as Fever Tree, Joules and Hotel Chocolat. To find about more please contact your nearest branch or our Head Office on [email protected] or 020 7337 0777.
Photo: www.comptoirlibanais.com
