|
|
|
Thu 16th Nov 2023 - Young’s agrees deal to acquire City Pub Group for £162m |
|
|
Young’s agrees deal to acquire City Pub Group for £162m: Young’s has agreed a deal to acquire City Pub Group, in a deal which values the owner and operator of circa 50 pubs across southern England and Wales at around £162m. City Pub Group said it intends to recommend unanimously that shareholders vote in favour of the scheme. Under the terms of the acquisition, each City Pubs shareholders will be entitled to 108.75p in cash and 0.032658 of a new Young’s A Shares for each City Pubs share, valuing City Pubs at approximately £162m. This represents a premium of 46% to the closing price of 99 pence per City Pubs share on the last practicable date; and 65% to the volume weighted average closing price of 88 pence per City Pubs share over the three months ended on the last practicable date. “Young’s has closely followed the City Pubs estate for some time and holds City Pubs’ premium, well-invested and wet-led approach in high regard,” the business said. “The transaction represents a rare opportunity to acquire a high-quality pub and bedroom portfolio of scale, allowing Young’s to increase its managed trading estate by 50 pubs to 279 pubs. Young’s notes City Pubs head office costs in the 52-weeks ended 25 December 2022 of £5.6m and believes it will be able to integrate the two estates, and operate the incremental pubs and bedrooms, with very limited additional overheads. City Pubs’ predominantly freehold portfolio of premium, individual and well-invested pubs and bedrooms presents an attractive opportunity for Young’s to drive future growth. Through operational alignment with the broader Young’s estate, Young’s anticipates increased like-for-like food, drink and bedroom sales across the City Pubs estate, while continuing Young’s strategy of consistent year-on-year investment at attractive returns in its pubs and bedrooms. The culture of Young’s and City Pubs’ businesses are closely aligned, both championing an entrepreneurial approach, underpinned by strong ambience and customer service and facilitated by supportive and engaging team members. The City Pubs estate therefore closely fits Young’s strategy to operate premium, individual and differentiated pubs and bedrooms. The Young’s directors recognise the value of City Pubs’ strong customer relationships and trusted teams, as well as the attractive growth opportunities that City Pubs has been pursuing. City Pubs’ track record and expertise provides the Young’s directors with confidence that the transaction will help deliver on a local, customer-focused strategy for the combined group. The transaction therefore represents a significant opportunity to accelerate Young’s existing growth strategy and create value for all stakeholders of the combined group.” Simon Dodd, chief executive of Young’s, said: “We are excited to be announcing the proposed acquisition of City Pubs, with the full recommendation of their board. City Pubs is an excellent business we have followed for some time, and one which aligns closely with Young’s in terms of both strategy and culture. Like us, City Pubs operates premium, individual and well-invested pubs and rooms, with a focus on the highest standards of customer service. Both businesses have performed well in a tough trading environment recently, testament to the strength of our business models, people and approach to customers. We believe that City Pubs is an excellent fit with Young’s and the combination of the two businesses represents a compelling opportunity for all stakeholders. It will allow us to expand our estate through the addition of a complementary, high-quality pub and bedroom portfolio, with the potential for the benefit of significant operational synergies to be realised by both sets of shareholders, through the partial share offer.” Clive Watson, executive chairman of City Pubs, added: “All at City Pubs can feel very proud of what has been built up over the past 12 years. City Pubs was an EIS start-up which began trading in March 2012 and now has an estate of fifty premium pubs in the great cities of southern England and south Wales. Like all hospitality businesses, the pandemic derailed City Pubs’ progress, but it has been able to produce a strong performance since with a more focussed, reshaped business with the lowest debt in its history and a solid strategy in place. The City Pubs board has therefore been able to evaluate today’s recommendation from a position of strength. Mindful of the uncertain economic climate, high interest rates and inflation in particular, and our plans for long term growth as an independent company, initial approaches were rejected. However, following careful consideration, we believe the transaction is in the best interests of City Pubs shareholders with the ability to realise 75%. of the equity in cash at a material premium to the current share price together with a stake in the future upside. The board believes the transaction significantly accelerates the value that could be realised in the short term by City Pubs if it were to remain independent. Additionally, the City Pubs board is reassured by Young’s similar entrepreneurial culture and its approach to investing in the business.” It comes as Young’s reported managed house revenue for the last six weeks was ahead of last year by 5.8% and up by 3.3% on a like-for-like basis. This follows a record performance for the half-year ending 2 October 2023, with a “proven strategy delivering industry-leading profitability”. Revenue was up from £186.5m in the same period in 2022 to £196.5m while adjusted profit before tax rose from £25m to £28m – a 12% increase and a record for a half year period. Adjusted Ebitda increased from £45m to £47.9m while net debt grew from £168.1m to £184m. It also reported record investment of £39.1m, consisting of £20.3m in its existing estate and £18.8m on five freeholds. It said headroom of £92.5m reflects a strong balance sheet, aided by positive free cashflow, which “supports our strategy and provides the financial capacity for continued investment”. Room revenue has been the standout performance, with like-for-like growth of 10.1%, with Central London and the City among standout regional performers, up 8%. Christmas bookings already strong, up 13% on last year, supported by investments and acquisitions. Standout drink performers include Guinness (+26.6% volumes). An interim dividend of 10.88 pence per share, an increase of 6.0%, reflects a “strong performance and positive outlook”. Young’s features in the Propel Turnover & Profits Blue Book, the latest edition of which was sent to Premium subscribers last Friday (10 November). Its turnover of £368,900,000 for the year to 3 April 2023 is the 37th highest in the database. The Blue Book ranks companies by turnover, profit and profit conversion, listing directors’ earnings for the past five years. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email kai.kirkman@propelinfo.com to upgrade your subscription.
Next Who’s Who of UK Food and Beverage to feature 83 updated entries and 34 new companies, released tomorrow: The next Who’s Who of UK Food and Beverage will feature 83 updated entries and 34 new companies when it is released to Premium subscribers tomorrow (Friday, 17 November), at midday. This month’s edition includes 784 companies and more than 211,000 words of content. The companies, listed in alphabetical order, will have their most recent results reported as well as broader information around Ebitda, plans and trading style available. The database merges Companies House information, interviews and other public information to provide an easy to reference and exhaustive guide to the sector. Meanwhile, for the first time, Propel group editor Mark Wingett has chosen the best videos from the Propel conferences in 2023, picking out a selection of talks and interviews that resonated with delegates from across the breadth of the hospitality sector. The 12 videos will be made available to Propel’s Premium subscribers at 9am on Friday, 24 November. Premium subscribers also receive access to five other databases: the Multi-Site Database, which is produced in association with Virgate; the Propel Turnover & Profits Blue Book; the New Openings Database; the UK Food and Beverage Franchisor Database; and the UK Food and Beverage Franchisee Database. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email kai.kirkman@propelinfo.com to upgrade your subscription. Premium subscribers are also being given exclusive access to the recording and slides to Propel Multi-Club Conferences. They also receive their morning newsletter 11 hours early, at 7pm the evening before; regular video content and regular exclusive columns from Mark Wingett.
Starbucks faces walkout at hundreds of US stores: The union representing thousands of Starbucks workers in the US is staging a walkout on one of the coffee chain’s busiest days of the year. The action comes amid a bitter fight between Starbucks and Starbucks Workers United, which started organising workers at the company in 2021. Roughly 200 stores are expected to be affected by the 16 November work stoppage, reports the BBC. Barista Michelle Eisen, one of the union’s leaders, said the company could afford to “do better by its workers”. The protest is the second to coincide with Starbucks’ “Red Cup” day, when the company distributes reusable, holiday-themed cups. In some locations, the walkout is set to last just a few hours, while in others it is expected to shutter the store for most of the day. Starbucks, which operates roughly 10,000 stores across the US, said it did not expect major disruption. It said it had spent hundreds of millions of dollars on higher wages, training and new equipment and it blamed the union for delays in talks, noting successful negotiations at several stores in Canada. “Starbucks remains ready to progress in-person negotiations with the unions certified to represent partners,” the company said in a statement. Since 2021, workers at about 350 of the company’s circa 10,000 locations in the US have voted to join the union, while Starbucks has fiercely opposed the campaign. Judges in the US have found the company has repeatedly violated labour laws. Starbucks, which typically appeals the findings, has denied wrongdoing. Last year, former boss Howard Schultz was forced to appear before Congress to answer for the union’s claims. Bank of England could cut interest rates next spring: The Bank of England could cut interest rates next spring, according to investors who have increased bets on significant monetary easing after better-than- expected inflation data. Money markets are pricing a cut in March, the first since the pandemic, following figures that showed consumer prices were rising at the weakest pace since October 2021. Before this week, investors expected no change in interest rates by the Bank’s monetary policy committee until next September, reports The Times. Annual inflation rose by 4.6% last month, lower than the 4.8% forecast by the Bank, on the back of a sharp drop in energy costs and other domestic inflationary sources. Markets reacted positively to the sharp fall in the consumer price index and closed higher for a third day. Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “October’s consumer prices report has rightly entrenched expectations that the MPC will be able to start to reduce bank rate in about six months’ time.” Martin Beck, adviser to the EY Items Club, a forecaster, said the monetary policy committee could reduce rates three times next year. “The latest inflation numbers should continue to assuage earlier concerns about the stubbornness of UK inflation. They also reinforce the view that the Bank of England will start cutting interest rates from late next spring,” he added. Financial markets believe that the 5.25% base rate will be reduced to about 4.65% by the end of next year.
MPs to debate enhanced protection for heritage pubs today: A debate is due to be held in parliament tomorrow to explore ways to step up protection for heritage pubs following the demise of the Crooked House. Dudley North MP Marco Longhi has secured the House of Commons debate, which will take place in the afternoon. He has also submitted his name in a ballot for a private member’s bill to protect heritage pubs, which will be introduced in a parliamentary session if it is successfully drawn, reports the Express & Star. It comes after the Crooked House in Himley burned down in August and was totally demolished without permission two days later. Longhi said its demise had deeply affected the community – which has led to rallying calls to see it rebuilt – and better protection for heritage pubs was needed. He said it was necessary to firstly define the characteristics of a heritage pub, to establish which buildings the extra protections proposed could apply to. “Once we’ve found that definition, it should be a requirement for local authorities to hold and review on a yearly basis a register listing all heritage pubs,” he said. When a heritage pub is to be put on the open market for sale it should be widely advertised. Places are being bought and sold behind closed doors without them being advertised. They are sold to people with no intention of running them as a pub.” Longhi has also suggested that only buyers who wish to run the heritage buildings as pubs should be allowed to make offers in the first year of them going on the market. Other measures he wants to see include giving a temporary listed status to buildings being considered for listing purposes, and giving extra powers to local authorities so they are able to stop any development on land where there has been a suspected arson attack until an investigation is complete. Staffordshire Police is treating the fire which started at the Crooked House as arson. To date, six people have been arrested in connection with the fire. ‘Oldest pub in UK’ could close following noise complaints: An ancient pub said to be the oldest in Britain could close after 715 years – because of noise complaints from nearby neighbours. Bosses of Ye Olde Black Bear in Tewkesbury, Gloucestershire, have incurred the wrath of some of its neighbours who have complained about customers and live music at the venue, reports The Mirror. The owners of the pub, which was established in 1308, have spent a large amount of money over six years on a major revamp ahead of its reopening in June this year. Rumoured to have once been visited by Williams Shakespeare, it had been shut since 2017 after falling on hard times before being acquired by Luke and Graham Haynes. The venue, which has a large open area at the back for hosting live music events, has been told by Tewkesbury Borough Council that strict new conditions could be imposed following complaints from the public. “The longstanding licence of The Black Bear is the subject of a review, placing it at risk of closure,” the pub said on its Facebook page. The council said, in a letter to residents living near the pub, its environmental health team had asked for a review of the Black Bear’s premises licence. It said: “The reason for the review is because of the noise and public nuisance emanating from the activities on the premises.” It added possible conditions it might impose included limiting outdoor entertainment at the site to six days a year, ending at 10.30pm each time, and requiring a noise limiting device to be installed. Landlord Luke Haynes said the council had been aware of his plan to make live music a key part of the business and that allowing only six events a year would mean the pub would not survive financially, adding that money generated by staging live music sessions in the summer would enable the venue to get through the winter. He said: “The support from the town has been absolutely overwhelming. It’s a very small number of people who are complaining. We’ve had huge support from our neighbours. I’m trying to work with the council to come up with solutions to this.” The pub’s fans have rallied behind the bid to keep it going, with an online petition having been signed by more than 2,800 people.
|
|
|
|
|
|
|
