The Food and Drink Group, the UK bar and restaurant operator, has announced it is exploring options to boost its scale including the sale of the business or an acquisition.
The company said it was “actively looking for a substantial corporate transaction” with the aim of creating a business of sufficient scale to cover its necessary central cost base more efficiently than at present.
The 33-strong group, which operates the Henry J Bean’s and Jamies brands, said that it believed it was sub-scale and that its current capital structure was “inappropriate for a more uncertain economic climate”.
It also announced it had secured an additional £2.5m of funding to further secure its financial stability going forward.
James Kowszun, chief executive, told M&C Report: “We are interested in looking at the best option to take the group forward whether that be a sale, an acquisition or reverse takeover."
The announcement by the company came as it reported that current trading was marginally below expectations and re-iterated a drop in pre-tax profit of £300,000 to £600,000 for the year to 29 September.
The group said it had seen some softening in trading in the current year, with like-for-like sales down less than 1% in the first 16 weeks of trading since the year end.
However, it said that like-for-like sales across Henry J Beans and its city bars division increased 5.2% and 4.1% respectively over the same period.
The company said that spend levels over Christmas showed a decline on the previous year, and that trade since Christmas continued to be slow.
For the year to end-September, full-year like-for-like sales increased 2.4% with food sales up over 5% and turnover up 2.4% to £20.8m.
Performance was helped by the acquisition of seven leasehold sites from puzzle Pub Company for £1.2m in April but offset by the sale of three sites with an overall profit on disposal of £400,000.
Henry J Bean’s reported a 6.3% rise in like-for-like sales for the year, with food sales up 6.6%.
Like-for-like sales across Jamies climbed 5.9% for the year, with food sales growth of close to 9%.
However, like-for-like sales across the company’s bars division fell 1% impacted by the poor weather in the summer
Stephen Thomas, chairman of FDG, said: “Henry J Beans and the City Bars business have continued to deliver strong underlying trading with good growth in food sales in particular.
“The invested bars business is showing good returns and we plan to focus on improving the performance of the uninvested bars business over the months ahead.
“The Puzzle sites have integrated well and the refurbished units are delivering improved performance which is encouraging.
“Whilst there has been some softening in trading in the current year as a result of consumer concerns in the wider market, the directors remain confident that the group has a portfolio of brands with significant untapped future potential.”
