Chaired by Luke Johnson, the group cited challenging market conditions, high regulatory costs, and difficulties raising investment as a listed company as the reason behind the move.
It is the third hospitality group in the past year to exit the public markets go private, following Nightcap and Loungers.
Over the past several years, the leisure and hospitality business has faced persistent challenging trading conditions, impacted by the pandemic, bad weather during peak summer trading periods, Budget increases in National Insurance to commence from 6 April 2025, pressures on consumer discretionary spending and a change in consumer behaviours.
As a result, it has focused on cost savings, disposals of underperforming assets and a maintaining a healthy balance sheet, limiting its ability to invest in growing the business.
Trading challenges have continued, and the board has been undertaking a review of its strategic options.
The cost, management, legal and regulatory burden associated with maintaining the company’s admission to trading on AIM were found to be “disproportionate to the benefits”.
Limited liquidity
It is estimated that the cancellation will save administrative and adviser costs by £250,000-£300,000 per annum, which would allow cash to be invested directly into the business longer-term.
Post cancellation, the company plans to pursue a partial refinancing of its bank debt, and is in early stage discussions with two major shareholders.
Refinancing fees will be “significantly lower” if the business is unquoted.
There is also “limited liquidity” in the ordinary shares on Aim, with shareholders not able to trade in meaningful volumes.
This has a significant impact on price and market valuation, impacting the company’s status within the industry, and among customers, suppliers and staff, and hurting its ability to seek financing or realise an appropriate value for future sales or disposals.
As a micro-cap stock with a valuation of £6.39m, the company struggles with access to capital, has a lack of visibility amongst analysts, media and potential investors, and is subject to “increased volatility” in its valuation unrelated to its performance.
The board believes it is unlikely to attract the material investment under current market conditions.
An unquoted company will be able to make decisions more quickly as a result of the more flexible regime applicable to a private company, the company said.
Transferring shares
Shareholders will be able to transfer their shares periodically via a matched bargain trading facility.
A general meeting will be held on 22 April 2025 to consider and pass the shareholder resolution, with approval of 75% required.
If approved, cancellation will become effective on 2 May 2025.
The board said shareholders are not required to dispose of their shares, but their ability to trade shares may be reduced if the cancellation goes ahead.
In the first 12 weeks of the current reporting period, total sales of £4.2m, £0.1m lower than the equivalent weeks trading in the previous year.
A warm weather spell during March, combined with the introduction of the higher £2 admissions charge for non-residents, resulted in total sales at the Pier of £1.8m, which was £0.1m higher year-on-year.
Trading in the Bars and Golf divisions has seen a slow start, with total sales of £1m and £1.4m respectively, each £0.1m lower than the prior weeks’ equivalent in 2024.
- Read the original story in MCA here.
