Essenden, the Nick Basing-led operator of the Tenpin brand, said yesterday that it is to tap institutions for at least £100m of new equity to fund acquisitions, which could include a move into the restaurant sector.
Basing told M&C Report that the group was set to enter a new three-year period of growth and that it was now looking to put in place the foundations to target the bolt on of “complementary multi-site leisure businesses”
The ex-Paramount chief executive said: “The restaurant and bar sectors are obvious ones for us to drill into. We will look across the wider sector for the right deal to provide the best opportunity for growth and the right level of returns for our shareholders. It is potentially a good time to look at opportunities through institutional backing and there are a number of interesting opportunities out there in the market place.
“We’ve been scouring the market for the last nine months. Now that we’ve unlocked the issue of the capital structure, we will be accelerating things and starting conversations.”
He said the deal this week to convert £21m of loan notes into shares had created the right capital structure to enable it to “fulfil its ambitions” and admitted that the group would be disappointed if the equity raised was “shy of the £100m mark”.
Yesterday, the group reported a 13.5% rise in like-for-like sales for the 11 weeks to 16 March 2014 on the back of a second consecutive year of growth, and reiterated that one of its key focuses was to create the conditions to “deliver a transformational and successful acquisition”.
The 29-strong company saw like-for-like sales rise 0.6% in the year to 29 December, with sales up 8.3% in the final quarter. EBITDA grew 8.4% to £4.1m during the year, while sales reduced from £47.1m to £45.6m due to a reduction in the number of sites. Pre-tax profit stood at £3.6m against a loss of £100k in 2012.
The company said that its focus is twofold: continuing to improve its existing business, whilst creating the conditions to deliver a transformational and successful acquisition.
Basing said that the performance of the group’s F&B operation had been strong during the year.