TIDMELTA
RNS Number : 2141P
Electra Private Equity PLC
15 October 2021
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION.
Electra Private Equity PLC
Proposed Demerger of Hostmore plc from Electra Private Equity
PLC and Intention to List
15 October 2021
Following the previously announced intention to demerge (the
"Demerger") Hostmore plc ("Hostmore") from Electra Private Equity
PLC ("Electra"), Electra announces that, subject to approval by
Electra shareholders on 1 November 2021, it is expected that the
Demerger will be completed and the Hostmore shares (the
"Securities") will be admitted to the premium listing segment of
the Financial Conduct Authority (the "FCA") and to trading on the
London Stock Exchange plc's main market for listed securities on 2
November 2021 (the "Admission").
Details of Hostmore, its group and the Admission are set out in
the prospectus (the "Prospectus"), which will shortly be available
on Electra's and Hostmore's respective websites
www.electraequity.com and www.hostmoregroup.com, subject to certain
access restrictions, once the Prospectus has been approved for
publication by the FCA, which is expected later today.
The Board of Electra believes that the strategy of establishing
Hostmore as an independent listed company provides shareholders
with the optimal opportunity for short and long-term value creation
through each of:
1) the recovery of the market and consumer confidence as we emerge from the Covid-19 pandemic;
2) market share gains arising from further development of the
Fridays and 63(rd) +1(st) brands in the United Kingdom with
continued focus on quality, relevance and simplification; and
3) development of the Hostmore business through acquisition and development of new brands.
Hostmore management will be meeting investors over the coming
days. Presentation slides will be made available on both the
Electra and Hostmore websites www.electraequity.com and
www.hostmoregroup.com in due course.
Trading update
Hostmore and its subsidiary undertakings (together the "Group")
have made encouraging progress since the resumption of indoor
dining in England on 17 May 2021.
Over the 20-week period since the resumption of restricted
indoor dining in England on 17 May 2021, the Group has reported
like-for-like growth when compared with the same period of 2019
averaging +11.0%. On a VAT adjusted basis, the like-for-like growth
of the Group when compared with the same period of 2019 was (1.0%).
In the 11 weeks since the further relaxation of Covid-19
restrictions in England on 19 July 2021, the like-for-like growth
of the Group when compared with the same period of 2019 has
averaged +12.1%. On a VAT adjusted basis, the like-for-like growth
of the Group when compared with the same period of 2019 was 0.1%.
Performance by the Group over the entire 20-week period reflected a
+2.8%(1) outperformance of the market and over the period since 19
July 2021 sales by the Group have outperformed the market by +1.5%.
* **
The Group's net debt,*** adjusted to include all Covid-19
related accruals, reduced to GBP36.4m at the end of August 2021
from GBP46.0m at the end of December 2020. Cash generated from
operations over the 3 complete months following the resumption of
indoor dining in England on 17 May 2021 (i.e. June to August 2021)
was GBP12.5 million. The free cash flow generated during the period
of GBP14.1 million reflects a 103% conversion of EBITDA.***
The Group opened a new Fridays restaurant in Lincoln on 19 May
2021, followed by the opening of the first 63rd+1st in Cobham on 24
May 2021 and the second 63rd+1st in Glasgow on 24 September 2021.
The Group plans to open a further 63rd+1st site in Harrogate in
November 2021.
* These figures exclude contributions from (i) new stores opened
in both 2019 and 2021, including 63rd+1(st) stores; and (ii) the
Fridays Covent Garden store which was permanently closed in
September 2021 as well as other stores that closed in financial
years 2019, 2020 and 2021.
** Market based on industry data compiled by Coffer CGA Business
Tracker.
*** Based on the Group's unaudited management reporting pre
IFRS16.
Neil Johnson, Chairman of Electra Private Equity PLC,
commented:
"The demerger of Hostmore marks the penultimate stage of the
implementation of the Electra strategy over five years. We have
confidence that both the demerger of Hostmore, and shortly the
transition to Unbound Group, will provide shareholders with the
opportunity for further value creation over and above that
delivered since 2016, whether they wish to realise value now or to
share in the further value creation opportunity that we have
confidence both businesses will deliver."
Robert B. Cook, Chief Executive Officer of Hostmore,
commented:
"We are delighted to be announcing the intention to proceed with
the demerger and listing which, subject to the approval of Electra
shareholders, we expect to complete in early November. The demerger
and listing of Hostmore leaves us well placed to continue to
develop enduring value through our existing and future brands and
we look forward to the future with excitement and confidence."
NOTES TO EDITORS
Electra Private Equity PLC
Electra is a private equity investment trust which has been
listed on the London Stock Exchange since 1976. Electra's
investment objective is to follow a realisation strategy, which
aims to crystallise value for shareholders, through balancing the
timing of returning cash to shareholders with maximisation of
value. Since 1 October 2016, Electra has distributed over GBP2
billion to shareholders through ordinary dividends, special
dividends and share buybacks.
Hostmore plc
Hostmore is a growing hospitality business with its current
operations focused on the American-themed casual dining brand,
Fridays, and the cocktail-led bar and restaurant brand, 63rd+1st.
While Fridays has been trading for over three decades in the UK,
Hostmore was established in 2021 to provide a platform for the
development of hospitality brands under the leadership of an
experienced management team that has a track record of building
businesses in the hospitality and leisure sectors.
Hostmore businesses are, and will be, defined by iconic brand
experience, vibrant heritage and sector-leading technology. Its
strategic focus will be to optimise its brands, aligning them with
evolving consumer demands and delivering personalised customer
engagement, optimising experience and efficiency through digital
leadership. Hostmore's mission is to make every customer experience
relevant and engaging, to celebrate the unique heritage and
character of its brands, and create environments where people have
fun and feel welcomed.
Celebrating its 35th anniversary in the UK in 2021, Fridays is
an established brand that offers bold, distinctive American food as
well as iconic cocktails made with premium spirits, alongside a
range of refreshing low and non-alcoholic cocktails. Fridays
provides a high-energy, fun environment with a wide demographic
appeal. In 2020, Hostmore refreshed Fridays' customer offering,
re-energising its voice to widen its appeal and bring it to today's
market - bringing back 'That Fridays Feeling' to existing, new and
former audiences.
In May 2021, Hostmore opened its first cocktail-led bar and
restaurant under the complementary brand 63rd+1st in Cobham,
Surrey. 63rd+1st offers a more sophisticated tone than the Fridays
restaurants and is aimed at affluent young professionals and
university students. A second site in Glasgow opened in September
2021, and the Company is aiming to open a further site by the end
of 2021 in Harrogate, with scope for 10 plus sites by the end of
2023.
Hostmore is exploring opportunities with TGI Friday's, Inc. to
expand its existing brands into new franchise territories and,
following the Demerger, will seek to add rapidly growing,
early-stage businesses to its portfolio of complementary brands,
exploring opportunities to extend its offering into experience-led
hospitality and leisure concepts.
Unbound Group PLC
Unbound Group PLC will be the parent company for a range of
brands focused on the 55+ demographic. Initially focused on Hotter
Shoes, Unbound Group will provide a broader range of products and
services to support and enhance the active lifestyles and wellbeing
of its targeted customer community. This online e-commerce platform
will be based on the foundations of Hotter as a trusted brand,
cloud-based digital infrastructure, and strong customer
personalisation through data insight. Unbound Group's expanded
offering beyond Hotter footwear will feature apparel and wellness
products and services, alongside third-party complementary
brands.
Hotter Shoes
Hotter Shoes has been transformed from a retail to a
multi-channel business with a strong and growing digital focus over
the last 2 years, and is now a fast-growing, profitable and
cash-generative e-commerce focused footwear brand. Hotter provides
footwear with uncompromising focus on comfort and fit through the
use of differentiating technology, to a targeted demographic that
values its brand and products. Hotter's direct-to-consumer channels
now reach 29% of the female population in the UK over the age of
55, providing them with footwear that allows them to do more of
what they love. Cultural and demographic shifts now provide an
opportunity to further monetise the existing Hotter customer
database and grow it through the addition of similarly themed
products beyond footwear.
S
ENQUIRIES
Electra Private Equity PLC
Gavin Manson, Chief Financial and Operating Officer
020 3874 8300
Vico Partners
John Sunnucks, Iain Rawlinson, Sofia Newitt
020 3957 5045
Numis
Joint Financial Adviser and Joint Corporate Broker to Electra
Private Equity PLC
Stuart Dickson
Alec Pratt
Jonathan Abbott
+44 207 260 1000
HSBC Bank plc
Joint Financial Adviser and Joint Corporate Broker to Electra
Private Equity PLC
Simon Alexander
Sam McLennan
Alex Moraru
+44 20 7991 8888
FURTHER INFORMATION
This communication is being made for information purposes only
in connection with the Demerger and Admission, and does not purport
to be full or complete.
The distribution of this announcement in jurisdictions other
than the United Kingdom may be restricted by law and persons into
whose possession this document comes should inform themselves about
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into the United States of America, Canada, Australia, Japan or
South Africa.
This communication is not for publication or distribution,
directly or indirectly, in or into the United States (including its
territories and possessions, any State of the United States and the
District of Columbia). This communication does not constitute or
form part of an offer of securities for sale or solicitation of an
offer to purchase securities in the United States, Canada,
Australia, Japan, South Africa or in any other jurisdiction in
which such offer may be restricted. The securities referred to in
this communication have not been, and will not be, registered under
the US Securities Act of 1933, as amended (the "Securities Act"),
or the securities laws of any state in the United States and may
not be offered or sold in the United States, except in reliance on
an applicable exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act. There will be
no public offering of securities in the United States.
In the United Kingdom, this communication is being distributed
only to, and is directed only at: (A) (i) persons who are
"investment professionals" specified in Article 19(5) of the
Financial Services and Markets Act (Financial Promotion) Order
2005, as amended (the "Order") and/or (ii) persons who fall within
Article 49(2)(a) to (d) of the Order (and only where the conditions
contained in those Articles have been, or will at the relevant time
be, satisfied); and (B) persons who are "qualified investors"
within the meaning of Article 2(e) of the Prospectus Regulation
(Regulation (EU) 2017/1129) as it forms part of United Kingdom law
by virtue of the EU (Withdrawal) Act 2018; and (C) persons to whom
it may otherwise lawfully be communicated (all such persons
detailed in (A), (B) and (C) together being referred to as
"Relevant Persons"). Any person in the United Kingdom who is not a
Relevant Person must not act or rely on this communication or any
of its contents. In the United Kingdom, any investment or
investment activity to which this communication relates is
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recipient is deemed to confirm, represent and warrant that they are
a Relevant Person.
In the member states of the European Economic Area (the "EEA"),
this communication is directed only at persons who are "qualified
investors" within the meaning of Article 2(e) of the Prospectus
Regulation (Regulation 2017/1129/EU) ("Qualified Investors"). This
communication must not be acted or relied upon by, and no
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The contents of this announcement have been prepared by and are
the sole responsibility of Electra.
This announcement does not constitute an offer or invitation to
sell or issue, or a solicitation of an offer or invitation to
purchase or subscribe for any securities in any jurisdiction nor
shall it (or any part of it) or the fact of its distribution, form
the basis of, or be relied on in connection with any contract
therefor. No offer of Securities will be made as part of the
Demerger or Admission and the Prospectus will be published solely
in connection with the proposed Admission.
This announcement may not be relied upon for the purpose of
entering into any transaction and should not be construed as, nor
be relied on in connection with, any offer, invitation or
inducement to purchase or subscribe for, or otherwise acquire, hold
or dispose of any securities of Electra and/or Hostmore and shall
not be regarded as a recommendation in relation to any such
transaction whatsoever.
HSBC Bank plc ("HSBC"), which is authorised by the Prudential
Regulation Authority (the "PRA") and regulated in the United
Kingdom by the FCA and the PRA, and Numis Securities Limited
("Numis" and together with HSBC, the "Banks") which is authorised
and regulated in the United Kingdom by the FCA, are acting as
financial advisers and corporate brokers exclusively for Electra
and as financial advisers exclusively for Hostmore, HSBC is acting
as listing agent exclusively for Hostmore and Numis is acting
exclusively as sponsor for Hostmore in connection with the Demerger
and Admission, and in each case for no one else in connection with
the Demerger, Admission or any other matters described in this
announcement and will not regard any other person (whether or not a
recipient of this communication) other than Electra and Hostmore as
a client in connection with the Demerger, Admission or any other
related matters and will not be responsible to anyone other than
Electra and the Hostmore group for providing the protections
afforded to their respective clients nor for providing advice to
any such other person in connection with the Demerger, Admission,
or any other matters referred to in this announcement. Apart from
the responsibilities and liabilities, if any, which may be imposed
on the Banks (or either of them) by the Financial Services and
Markets Act 2000 or the regulatory regime established thereunder,
neither of the Banks nor any of their respective affiliates,
directors, officers or employees owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect,
consequential, whether in contract, in tort, in delict, under
statute or otherwise) to any person who is not a client of HSBC or
Numis (as applicable) for the contents of this announcement or its
accuracy, completeness or verification or for any other statement
made or purported to be made by it, or on its behalf, or by any
other person(s) in connection with the Demerger, Admission, this
communication, any statement contained herein, or otherwise.
The information in this communication does not purport to be
comprehensive and has not been independently verified by the Banks,
any of their respective group undertakings or affiliates or any of
their respective members, directors, officers, employees, agents or
affiliates. Except in the case of their respective fraudulent
misrepresentation, no responsibility or liability is accepted by
the Banks, any of their respective group undertakings or affiliates
or by any of their respective members, directors, officers,
employees, agents or affiliates as to or in relation to the
accuracy, completeness or sufficiency of this communication or any
other written or oral information made available to any interested
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warranty, express or implied, is made as to the fairness, accuracy,
completeness or correctness of the information or opinions
contained in this communication and no reliance should be placed on
such information or opinions. The information contained in this
communication is subject to change without notice and may not
contain all material information relating to the products,
services, investment and transaction referred to herein. None of
the Company, HSBC, Numis nor any of their respective group
undertakings or affiliates is under any obligation or give any
undertaking to provide the recipient with access to any additional
information or to update this communication or any additional
information or to correct any inaccuracies in it which may become
apparent, and it reserves the right, without giving reasons, at any
time and in any respect to amend or terminate the proposal(s)
described herein.
Certain statements made in this announcement are forward-looking
statements and by their nature, all such forward-looking statements
involve risk and uncertainty. Forward-looking statements include
all matters that are not historical facts and often use words such
as "expects", "may", "will", "could", "should", "intends", "plans",
"predicts", "envisages" or "anticipates" or other words of similar
meaning. These forward-looking statements are based on current
beliefs and expectations based on information that is known to
Electra and/or Hostmore at the date of this announcement. Actual
results of the Electra group and/or the Hostmore group and/or their
respective industries may differ from those expressed or implied in
the forward-looking statements as a result of any number of known
and unknown risks, uncertainties and other factors, including, but
not limited to, the effects of the Covid-19 pandemic and
uncertainties about its impact and duration, many of which are
difficult to predict and are generally beyond the control of
Electra and/or Hostmore (as applicable). Persons receiving this
announcement should not place undue reliance on any forward-looking
statements. Unless otherwise required by applicable law or
regulation Electra, Hostmore and its respective advisers (including
HSBC and Numis, in the capacity set out above) disclaim any
obligation or undertaking to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
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retail investors and investors who meet the criteria of
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defined in paragraphs 3.5 and 3.6 of the FCA Handbook Conduct of
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and who have sufficient resources to be able to bear any losses
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prejudice to the requirements of any contractual, legal or
regulatory selling restrictions in relation to Admission.
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Assessment, the Banks will only procure investors who meet the
criteria of professional clients and eligible counterparties.
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for the purposes of Chapters 9A or 10A respectively of the FCA
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