City Pub Group to raise £6.2m, increases acquisition target to more than ten sites a year: City Pub Group, led by Clive Watson, has announced it proposes to raise £6.2m by way of a share placing to expand its estate – and has upped its acquisition target to more than ten a year. The funds will be raised by way of an accelerated bookbuild of new ordinary shares of 50 pence each in the capital of the company at a price of 220 pence per placing share. The company has three sites in negotiation – a freehold pub in the south Midlands, a freehold site in Wales and a leasehold property in the south west of England. All three sites are expected to open in November. City Pub Group stated: “The net proceeds will increase the available cash reserves of the group to enable it to capitalise on opportunities to selectively acquire more pubs and take advantage of softer pricing in the current market. The group has made strong progress and built momentum since its admission to AIM in November 2017. On initial public offering (IPO), the group comprised of 33 trading pubs with one in development; now the group owns 43 trading pubs with a further three in development, a majority of which are freehold. The rate of acquisition is ahead of plan at the time of IPO, in part due to capitalising on the opportunity to acquire high-quality assets at competitive prices in the current market. The company is undertaking the placing to provide it with a strong platform to finance further acquisition opportunities at attractive prices and continue to expand its portfolio at the current rate. The company’s revised strategy is to grow its estate to 75 pubs by mid-2021. The board believes the market appetite for acquisitions is softening, driven by uncertainty about the outcome of Brexit and revisions to business rates. Furthermore certain larger pub companies continue to rationalise their estates to focus on their key target markets. The group is experiencing less competition for sites and intends to take advantage of this as it expands its portfolio of pubs, whilst continuing to be disciplined in its approach. The group is now targeting the acquisition of more than ten pubs per annum. As at 30 September 2018, the group had borrowings of £14.6m under its £30m revolving credit facility with low long-term debt to Ebitda ratio of below three times. The group is in a strong position to extend its facilities, which would further increase the resources available to expand the group’s estate. The group is continually appraising both individual sites and portfolios of pubs and has a strong pipeline of potential acquisitions out of the large number of opportunities presented. Currently, three acquisitions are under negotiation. There are a number of others being monitored. Last week we opened the Bicycle Shed in Oxford taking the number of trading sites of the group to 43. As announced in our interim results on 20 September 2018, the company continues to trade in line with market expectations. In the 13 weeks since 1 July 2018 revenue has increased by 24% over the prior period.” Liberum Capital and Berenberg are acting as joint bookrunners in connection with the placing.
Living Ventures puts Artisan and Manchester House into administration: Living Ventures has taken the decision to put Manchester-based venues Artisan and Manchester House Bar And Restaurant into administration after a “period of difficult trading”. Administrator Duff & Phelps has been appointed and will lead the process. Living Ventures stressed that only Artisan and Manchester House Bar And Restaurant have entered administration. Living Ventures said management and the administrators would work with employees and suppliers to “limit impact and disruption”. Living Ventures chief executive Jeremy Roberts said: “Trading at Artisan and Manchester House Bar And Restaurant has been much lower over the summer and, like many other restaurants, we have struggled to balance rising costs and high rents together with localised access difficulties. I would like to take this opportunity to thank our brilliant and hard-working teams. We are currently contacting all affected employees and looking into available roles in other parts of the group.” The remainder of Living Ventures continues to trade normally, with revenues for the full year to March 2018 at circa £20m. The group will focus on ventures such as Australasia, Grand Pacific and new projects such as Sunset By Australasia, which has had a strong start after launching in August this year. Individuals with reservations at Artisan and Manchester House Bar And Restaurant will be contacted and offered alternative options at one of the group’s other restaurants. Gift cards issued by either venue will be redeemable at Australasia Restaurant until 31 March 2019. Living Ventures launched Manchester House Bar And Restaurant in the city centre in September 2013, while Artisan opened in Spinningfields in July 2013.
