NewRiver buys Bravo Inns for £17.9m: NewRiver has bought community pub company Bravo Inns for £17.9 million, representing an Ebitda multiple of 6.8x. The transaction is expected to generate annualised outlet Ebitda of £2.6 million, equating to a yield on cost of 14%, which excludes £0.3 million of synergies expected to be realised through the transfer of Bravo Inns to the Hawthorn Leisure platform. The company stated: “The transaction will be accretive to underlying funds from operations and will further increase dividend cover, which is the company’s key priority. Bravo Inns owns 44 wet-led community pubs, predominantly located in North West England. The Bravo Inns management have established a high-quality, well-managed and well-invested operator managed portfolio which complements Hawthorn Leisure’s existing 660 community pub portfolio. The acquisition will increase NewRiver’s exposure to the highly profitable operator managed pub model. This will provide the company with opportunities to drive higher returns through accretive capital expenditure and other asset management initiatives, whilst providing the company with a higher degree of management control and oversight.” Mark Davies, chief financial officer of NewRiver and chief executive of Hawthorn Leisure, said: “The UK pub sector has experienced a recent revival in transaction activity and, as an early investor into community pubs, we have been tracking the success of Bravo Inns for some time. The transaction will increase our portfolio weighting in community pubs and demonstrates the value of our Hawthorn Leisure platform in identifying acquisitions that can deliver higher yielding sustainable cashflows with scale driven synergies. A further attraction of this acquisition is the quality of the pub estate and the pub partners. We look forward to welcoming Bravo Inns and its pub partners to Hawthorn Leisure.” Bravo was founded in May 2007 by Ken Buckley and Philip Dearden, together with financial support from Albion Capital. In early 2007, Buckley and Dearden and Albion successfully exited The Bold Pub Company, an estate of 30 pubs. The Bravo estate trade under the operator managed model. Profits have increased from £1.9m in 2017 to in excess of £2.6m today due to selective site acquisitions and growth capital investment. Following completion of the sale, Ken Buckley will continue as a consultant to the business and the Bravo Inns name will be retained in each of the pubs. The expectation is that the business will benefit from funding from Hawthorn to grow the brand further in its heartland of North Cheshire, Greater Manchester, Staffordshire, Lancashire and Cumbria. Ken Buckley said: “We have long been passionate supporters of pubs operating in the heart of the community, led by talented operators ensuring customers are the absolute focus. I am delighted to announce today’s sale of Bravo to Hawthorn. It is clear that we share the same commitment to community-based assets and I look forward to developing the business further under its ownership. I feel extremely proud to have built two successful businesses with Albion Capital. I would like to thank Will Fraser-Allen for his strong support over the last 15 years, not just in terms of providing access to flexible capital but also his wise counsel along the way. Finally, I would like to thank our advisers, Fraser, Peter and the team at Sapient Corporate Finance. Sapient’s unrivalled knowledge and understanding of the pub market is widely-known but equally impressive is their hands-on commitment and dedication to executing a successful transaction.” Will Fraser-Allen, Albion Capital, managing partner added: “It has been an immense privilege working with Ken Buckley and Phil Dearden for over 15 years as they successfully built Bold Pub Company and then Bravo. Such a long relationship is rare and is testament to the quality of these businesses and the team that created them. What Ken Buckley does not know about pubs is simply not worth knowing!”

Cineworld partners with Lavazza to open coffee bars in new and refurbished cinemas in the US: Cineworld is partnering with Lavazza to open coffee bars in new and refurbished cinemas in the US where it is integrating its Regal acquisition. The company stated: “Our integration plans for Regal have progressed well and management is pleased to announce an increase in achievable synergies from $150m to $190m following significant improvements in contractual terms and the elimination of excess costs. Further, the group has achieved better than anticipated results from revenue initiatives. The full impact of all these additional initiatives and cost savings will be realised in 2020. Our Unlimited program, which has successfully operated in the UK and Poland for several years, was launched in the US in July 2019. The program has been extremely well received and is well on track to reach membership levels above initial management expectations by year end. The program has assisted in mitigating the impact of the first-half closure of 16 loss making sites (168 screens) and other part-closed screens during renovation. Our refurbishment program in the US is on track with ten sites under refurbishment. Another 70 agreements have been signed for other strategic sites to be refurbished in the US in the near term. We expect these sites to result in a strong return on investment in line with our experience in the UK and ROW. An agreement has also been entered into with Lavazza, the Italian coffee chain, to incorporate coffee bars in new and refurbished sites, the first of which will open this month in Union Square, NY. Investment in the latest technology continues to be a key pillar of the group’s strategy. During the second half of the year, the group opened 15 ScreenX and ten 4DX across the estate. Both formats are proving very popular and we anticipate having around 40 4DXs and 30 ScreenX by end of 2019 and plan to double the amount in 2020. During the second half of the year, as part of the group’s estate management strategy, five new sites (45 screens) were opened, two in the UK, two in the US and one in Poland. We have also continued to close unprofitable sites with five of the group’s sites closed in the second half, three in the US, one in the UK and one in Czech Republic. This brings the total number of sites in the group as at 1 December 2019 to 786 with 9,498 screens. We also expect to open three new sites before the year-end (two in the UK and one in Hungary). As anticipated, the box office performance for the reported period was slower than the comparative period in 2018 reflecting the phasing of major releases and postponement of some highly anticipated movies to 2020. The second half of the year started strongly with the release of “The Lion King”, “Spider-Man: Far from Home”, the record-breaking “Joker” and recently “Frozen 2”. There are still two major blockbusters to be released in 2019 with “Jumanji: The Next Level” and “Star Wars: The Rise of Skywalker” in December. Despite a challenging comparative period, group performance has been resilient across the portfolio. We remain focused on operational performance, cash flow generation and de-leveraging which will be achieved within our current capital allocation framework with no change to the dividend policy. The impact of the major releases in December is expected to continue the recent positive box office trend. However given the weaker full year box office, partially offset by strong execution of synergies and revenue initiatives, management expects trading for the full year to be slightly below management’s expectations.” Mooky Greidinger, chief executive of Cineworld Group, said: “Despite the challenging backdrop, Cineworld has continued to execute well and our strategy of focusing on optimising customer experience remains unchanged. There is an impressive selection of movies to come, which coupled with our extensive premium technology-led offering and exciting food and beverage offerings, will contribute strongly to our operating results and underpin our mission to be “the best place to watch a movie”. I am confident both about the future of the theatrical business as a whole and most importantly our ability to be a leader in it.”