Nightcap, which runs bar chains including Dirty Martini and the Cocktail Club, said that its valuation ‘does not reflect’ its potential and that it would re-register as a private company
Nightcap, the bar owner, has announced plans to delist its shares from the London Stock Exchange, citing a “challenging” trading environment and predicting adjusted earnings below market expectations.
In an update to its investors, Nightcap claimed that its current AIM listing “does not reflect” the potential of the company, proposing to re-register as a private entity. Gareth Edwards, chairman of Nightcap, said: “We have not taken this decision lightly.
“However, following an extensive review … the board has unanimously concluded that it is in the best interests of the company and our shareholders to cancel our AIM admission and re-register as a private limited company. The board believes that Nightcap’s current public market valuation does not reflect the underlying potential of our business or our achievements to date and that this is unlikely to change in the short-to-medium term.”
The proposed delisting will be subjected to a shareholder vote on July 17, with investors needed to approve the proposal. The planned delisting aims to take effect on July 29. Nightcap operates several well-known bar chains including Dirty Martini and the Cocktail Club, boasting 46 locations across the UK.
Acknowledging the effects of the cost-of-living crisis, “above inflation increases to business rates” and hikes to minimum wage on its performance, Nightcap revealed that its earnings before interest, tax, depreciation, amortisation (EBITDA) are predicted to come in “below current market expectations”. The firm noted that the recent acquisition of London hotspot the Piano Works, coupled with expenses related to its transition to a private company, are expected to dent its profits.
The group has announced that its income figures are meeting projections, despite the “challenging” market environment. This update follows Nightcap’s withdrawal from a possible salvage agreement for its competitor Revolution Bars just last month.
Nightcap expressed its “disappointment” after its merger offer was turned down by the more sizeable hospitality operator. Revolution Bars dismissed the bid, cautioning that it was “incapable of being delivered”.
