PizzaExpress in fresh Chinese push

PizzaExpress in fresh Chinese push.

PizzaExpress’s new Chinese private equity owner is eyeing a buyout of the chain’s Hong Kong-based franchise partner as the chain beloved of the British middle classes expands across Asia.

Beijing-based Hony Capital, which acquired the pizza group in a £900m deal with Cinven last year, intends to directly acquire 26 franchised PizzaExpress restaurants in China the company said on Monday, and plans to open up to 15 more every year.

 “The PizzaExpress board were very keen to grow our business in China before Hony Capital acquired us,” said Richard Hodgson, chief executive. “Our restaurants in China are typically twice as busy as those in the UK.”

The Hony deal showed the growing Chinese investor appetite for British consumer brands, and followed on from Bright Food’s purchase of Weetabix in a deal that valued the breakfast cereal at $1.2bn.

PizzaExpress opened its first wholly-owned restaurant in Beijing last year, and another in Shenzhen will follow shortly. “There are dozens of second-tier Chinese cities with populations similar to that of London,” Mr Hodgson said, adding that between 10 and 15 openings a year were being targeted.

“It has taken us 15 years to get to 27 restaurants, and we’re not about to make any mistakes in China by rushing,” he added.

This compares with a target of 20 openings a year in the UK, where PizzaExpress has 400 restaurants, and last month celebrated 50 years since its first outlet was opened in Soho.

The China franchise was established 15 years ago by Justin Kennedy, a former investment banker at Citigroup in Hong Kong, who introduced a ‘Peking Duck’ pizza for Chinese diners.

First-half results released on Monday showed the chain was earning a decent crust for its new Chinese owners, with a 15.8 per cent increase in earnings before interest, tax, depreciation and amortisation to £55m on total revenues that grew 9.4 per cent to £231m.

The group’s UK restaurants saw a 6.8 per cent increase in like-for-like sales in the 28 weeks to 11 January, compared with the same period a year ago. Mr Hodgson said sales had been boosted by “improved consumer sentiment, particularly in London” and the number of covers and average spend per head were both rising.

Combined with the impact of deflationary ingredients prices, this boosted the group’s ebitda margin by 1.3 percentage points to 23.8 per cent.

International sales, including China and the Middle East, rose 45 per cent on a like-for-like basis, with restaurants opened in Delhi and Mumbai in the period.

Sales to UK supermarkets — responsible for 31m pizza sales a year, compared with 29m sold through its UK restaurants — were “trading well ahead of last year” he added.

PizzaExpress in fresh Chinese push.

PizzaExpress’s new Chinese private equity owner is eyeing a buyout of the chain’s Hong Kong-based franchise partner as the chain beloved of the British middle classes expands across Asia.

Beijing-based Hony Capital, which acquired the pizza group in a £900m deal with Cinven last year, intends to directly acquire 26 franchised PizzaExpress restaurants in China the company said on Monday, and plans to open up to 15 more every year.

PizzaExpress opened its first wholly-owned restaurant in Beijing last year. “It has taken us 15 years to get to 27 restaurants, and we’re not about to make any mistakes in China by rushing,” he added. This compares with a target of 20 openings a year in the UK, where PizzaExpress has 400 restaurants, and last month celebrated 50 years since its first outlet was opened in Soho.

The China franchise was established 15 years ago by Justin Kennedy, a former investment banker at Citigroup in Hong Kong, who introduced a ‘Peking Duck’ pizza for Chinese diners. International sales, including China and the Middle East, rose 45 per cent on a like-for-like basis, with restaurants opened in Delhi and Mumbai in the period.

Sales to UK supermarkets — responsible for 31m pizza sales a year, compared with 29m sold through its UK restaurants.