Deltic Group, the UK’s largest nightclub operators, has put back plans to explore an IPO or another type of exit until at least next year, as it concentrates on further upgrading its estate.
In an interview with The Times, when asked about appointing advisors, chief executive Peter Mark said: “Our view on advisers is that until we are happy we have got the right story and have caught up on the investment backlog, we should hold off. But hopefully that will happen within a year, macro factors permitting.”
The group, which has 57 venues under such brands as Pryzm, Atik and Bar&Beyond, is investing £8.1m, down slightly on the £8.4m it invested last year, although that included the one-off £2.5m cost of opening a large Pryzm in Birmingham.
Deltic reported a fall in underlying earnings from £13.4m to £11.5m in the year to 25 February in a challenging trading environment while it also decided to implement “a more aggressive depreciation policy in line with best practice”.
Turnover improved by £1m to £102m as admissions increased by 1.7% on a like-for-like basis to 7.2m, although the spend per head, excluding VAT, fell by 80p to £14.09.
Marks said: “As our most recent Deltic Night Index report highlighted, young people still really enjoy going out to bars and clubs, and we want to make sure they’re having the best possible experiences when they choose our venues. We’re very proud that we understand what our guests want and invest in our estate to ensure that we’re delivering fantastic experiences each and every time. This latest round of investment is an example of that.”
When asked about a look at Revolution Bars Group, Marks said: “You couldn’t say never, but it’s too early to say. The share-price fall seems quite an overreaction but if the market continues to overreact you’ve got to consider all options. But we’re not actively looking at anything right now.”
He said that this year had started well and the absence of a football tournament would help summer trading, although the company had to swallow an extra £1m in costs from business rates, the living wage and duty.
Asked about consumer confidence, he told The Times: “I would say it’s OK. I don’t see any impact from Brexit. I think our consumer remains price-sensitive and remains driven by occasions. They’ll go out a bit less but spend a bit more. I’m pretty flat on the future, to be frank. I don’t see it as being particularly good or bad.”
