City Pub Company plans new fundraising

By John Harrington, M&C Report

- Last updated on GMT

Related tags: Depreciation, Public house, Henley-on-thames

Clive Watson said the board is very excited about the new fundraising
Clive Watson said the board is very excited about the new fundraising
City Pub Company, the Enterprise Investment Scheme (EIS)-funded group, plans to raise a further £5m to £10m as it targets an estate of 25 to 30 pubs.

The news comes as the 17-strong group reports that both EBITDA and sales more than doubled in the six months to the end of June across both EIS companies (West and East), with earnings before interest, taxes, depreciation and amortization (EBITDA) moving from £320,000 to £677,000 and sales growing from £3.1m to £6.4m.

City has disposed of two pubs to reinvest the funds elsewhere: the Three Blackbirds in Newmarket sold for £560,000 and the Henley Brew House in Henley-on-Thames sold for £875,000.

City is looking to raise the money by the issuing of convertible preference shares — a process that is different from EIS, giving the assurance of a fixed rate of return.

City chairman Clive Watson said: “It is likely that this will yield a coupon of around 6% and a conversion rate of around 170p.”

The plan is to launch the fundraising in mid-April.

Watson added: “The board is very excited about the new fundraising, especially as it has now identified several new opportunities for acquisition that would add significant value.”

Related topics: MA500 Business Club

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