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Nightcap adds Dirty Martini to portfolio for GBP4.7 million price tag

9th Jun 2023 18:35

(Alliance News) - Nightcap PLC on Friday said it has bought DC Bars Ltd, the operator of the Dirty Martini chain of cocktail bars, and Tuttons Brasserie Ltd for up to GBP4.7 million.

Nightcap is a London-based owner of Cocktail Club, Adventure Bar and Barrio Familia chains.

Nightcap said it has bought 10 Dirty Martini bars and the Dirty Martini brand, which it said has a "significant roll-out potential."

It noted that five bars are located across London, with the other five in Birmingham, Bristol, Leeds, Manchester and Cardiff.

In 2022, DC Bars generated revenue of GBP23.7 million and earnings before interest, tax, depreciation and amortisation of GBP3.9 million.

Despite this, Nightcap explained that Dirty Martini experienced tough trading conditions over the last year, in line with the hospitality industry in general, including the negative consequences of train strikes, the cost-of-living crisis and inflation. It has also struggled with "significant indebtedness." Based on this, the business was put into administration.

"The board believes that the Dirty Martini brand is a good fit with Nightcap's existing portfolio, increasing the group's presence in its already established locations and expanding Nightcap's portfolio of bars into further key cities," the company explained.

Nightcap said it will buy Dirty Martini for GBP4.7 million, including GBP4.2 million in cash on completion and a further GBP500,000 payable based on certain conditions being met.

In line with the acquisition, Nightcap said it has raised a total of GBP5.0 million, through a subscription of 19.6 million shares priced at 12 pence per share. This represents a 26% premium to Nightcap's closing price of 9.50p on Thursday.

Nightcap shares closed up 26% to 12.00p each on London on Friday.

Chief Executive Officer Sarah Willingham said: "We couldn't be happier to welcome Dirty Martini to the Nightcap family. These are long-established, well-run bars that fit well with our existing portfolio and our model of running multiple brands in clusters in London and around the country.

"Dirty Martini's late-night bars operate in a similar way to ours. They have great bars in excellent locations with impressive fitouts, following over GBP10 million of capital investment."

In 2021, Nightcap bought Cocktail Club, Adventure Bar Group and Barrio Bar Group.

Nightcap also issued a trading update on Friday.

It said that whilst the cost-of-living crisis has affected the entire hospitality industry, the influence of train strikes has been the main source of disruption to the company's trading in the year ending July 2.

Management currently estimates that the 28 train strike days over the year have cost the company GBP2.9 million in revenue and GBP1.9 million in Ebitda.

In relation to financial 2023, the board currently expects to report revenue broadly in line with current market expectations, with adjusted Ebitda expected to be below current market expectations.

"Despite macroeconomic and train strike related challenges, the board continues to be impressed with the resilience of Nightcap's brands and its customers," Nightcap added.

By Sophie Rose, Alliance News reporter

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