VARIOUS EATERIES PLC

Share Issue/Capital Change • Sep 10, 2020

National Storage Mechanism | Additional information

RNS Number : 5477Y

Various Eateries PLC

10 September 2020

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR ANY JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT

This announcement is an advertisement and not an admission document or a prospectus. This announcement is not and does not constitute or form part of, and should not be construed as, an offer of securities for subscription or sale in any jurisdiction nor a solicitation of any offer to buy or subscribe for, any securities in any jurisdiction, nor shall it or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with, any contract or commitment whatsoever. This announcement does not constitute a recommendation regarding any securities. Prospective investors should not subscribe for or purchase any securities referred to in this announcement except in compliance with applicable securities laws and regulation and on the basis of the information in the final admission document ("Admission Document") to be published by the Company, and any supplement thereto, in connection with the placing ("Placing") of its ordinary shares ("Shares") and the proposed admission ("Admission") of the Shares to trading on the AIM market of London Stock Exchange plc ("London Stock Exchange").  A copy of the Admission Document will, following publication, be available for viewing on the Company's website at www.variouseateries.co.uk.

This announcement constitutes a financial promotion for the purposes of section 21 of the Financial Services and Markets Act 2000 and has been approved by W H Ireland Limited which is authorised and regulated by the Financial Conduct Authority.

10 September 2020

VARIOUS EATERIES PLC

("Various Eateries" or the "Company" or "the Group")

INTENTION TO FLOAT

AND

PROPOSED ADMISSION TO TRADING ON AIM

Various Eateries, whose group (the "Group") owns, develops and operates restaurant sites in the United Kingdom, announces its intention to seek admission ("Admission") to trading on AIM, a market of the London Stock Exchange, of the entire issued and to be issued share capital of the Company. Admission is expected to take place end of September/early October 2020. The Company intends to raise up to £25 million by way of a placing of its Ordinary Shares on Admission.

Highlights

·     Exceptional leadership team - members of the VE Board have created some of the UK's largest and most well known hospitality groups. Between them, they have opened more than 400 new sites and have generated attractive returns for investors since the mid 1990s.

o  Hugh Osmond, Founder - PizzaExpress, My Kinda Town, Punch Group

o  Andy Bassadone, Chairman - My Kinda Town, Strada, Côte Restaurants, Bill's, The Ivy Collection

o  Yishay Malkov, CEO - The Ivy Collection, Gordon Ramsay Holdings, Roka Zuma, Park Chinois

o  Oli Williams, CFO - itsu, McDonald's

o  Matt Fanthorpe, Chef Director - Guy Savoy, Jamie's Italian

·     Established platform business operating two core brands, Coppa Club & Tavolino, both positioned to benefit from the post-Covid environment. 

o  Ten sites in operation, with five sites in London and five sites outside, providing a platform to scale organically at pace

·   Unprecedented growth opportunity - the Directors believe site availability, acquisition opportunities, reduced competition, availability of talent and changes in consumer behaviour provide opportunities to accelerate the Group's growth

·     Use of funds - the Directors believe Admission will allow the Group to advance its plans to roll out the Coppa Club and Tavolino brands, while allowing greater access to capital to fund future activities including acquisitions and for working capital

Hugh Osmond, Founder of Various Eateries, commented:

"I believe that Covid-19 is the biggest event to hit the UK economy outside of war-time. Whilst I deplore the terrible effect it has had on our industry, we are confident that there will be major opportunities for a well funded group with strong management to build a fantastic business in the aftermath of Covid. We are also confident that we have one of the most experienced teams ever assembled in the hospitality sector, 2020s-appropriate brands, and an established platform business and I am firmly of the view that the opportunity is as big as it was in the early 1990s when I jointly led the acquisition of PizzaExpress.

"The funds raised will be principally used to take advantage of the opportunities and accelerate growth. Our senior team has an established track record of acquiring, converting and opening sites and, with, what we perceive to be, the availability of premium sites at attractive rents, I believe the prospects for Coppa Club and Tavolino are exciting. 

"There are also a number of well-known brands out there that are struggling to navigate the pandemic and various other industry pressures. Should the right opportunities present themselves, we would consider supplementing our organic growth through acquisition, offering distressed brands a more sustainable future as part of the Group.

"The brands we operate have been designed to cater to changing consumer preferences. Coppa Club provides all-day flexible spaces ideal for remote working as well as extensive outdoor spaces, and separate bar, lounge and restaurant areas. Tavolino is a modern all-day Italian bistro with potential for every high street. With a team that between them have created some of the UK's most well-known sit-down restaurant groups over a period of 27 years, we believe we are ideally placed to make the most of the post-lockdown landscape."

Key Strengths

Entrepreneurial leadership with expert experience

The Directors believe that the combination of Andy Bassadone and Hugh Osmond working together is a compelling proposition.

Andy Bassadone has 25 years' experience in the UK restaurant sector. He founded the Italian-themed restaurant chain, Strada, in 1999, working with partner Chris Benians to grow the company to 25 restaurants over a 5-year period before selling the company for £56m in 2005.

After sale, Andy remained at Strada as CEO, and grew the restaurant group to 55 sites, ultimately overseeing its disposal a second time for £140m in 2007. As set out above, Andy went on to launch two other successful restaurant concepts including market leading French Bistro chain Côte in 2007. This was sold by Andy Bassadone and his team for £100m in 2013 and in 2015 it was sold again for £240m. He later headed up the expansion of Bill's Restaurants and, more recently, The Ivy Collection.  

Hugh Osmond is one of the industry's most well-known and successful entrepreneurs. He led the acquisition and transformation of Pizza Express from annual losses in 1993, to £38m of EBITDA by 2001, growing the group to 367 restaurants, serving 16 million diners per annum. Hugh also led the acquisition and sale of My Kinda Town, the international restaurant group, with Andy Bassadone. In 1997, Hugh co-founded Punch Taverns and became the Executive Chairman of Punch Group. He led the process of consolidation in the pub industry to create a group with over 8,000 outlets, and an enterprise value of £3.5 billion in 2005.

An exceptional management team

VE's senior management team has significant sector experience and brings exceptional expertise to the Group. The team includes:

·   Yishay Malkov, CEO, who was Executive Operations Director of the Ivy Collection and helped develop the concept, opening c.30 sites in four years. He was also restaurant director at Gordon Ramsay Holdings and Managing Director of Park Chinois;

·    Oli Williams, CFO, who was previously Group Financial Controller of itsu and Senior Franchise Accountant at McDonald's; and

·   Matt Fanthorpe, Chef Director (non-board position) who was Chef director at Jamie's Italian opening 34 restaurants in 6 years, and who worked under three star Michelin Chef, Guy Savoy.

Established platform businesses

The Group operates two contemporary brands across ten locations - Coppa Club, an all-day clubhouse offer in prime locations throughout London and the South-East and Tavolino, a new Italian brand with nationwide potential, offering high quality Italian food at mid-market prices. The Directors believe that the two brands are well positioned for the new market conditions post-lockdown.

The Group also operates two Strada sites which, subject to matters including market conditions, it aims to re-fit as Tavolino sites.

A significant reduction in competition

A significant number of operators are closing all sites or are not re-opening sites post lockdown. The directors believe that this  provides a huge opportunity for the growth of Tavolino and the roll out of the Coppa Club concept if the right locations can be identified.

Well-invested central infrastructure to support growth

The Group has established a head office structure capable of operating the current business whilst also executing builds, new openings and acquisitions. The central function includes experienced finance, HR, marketing and procurement teams and also has the benefit of a highly proficient fit out team who have worked with Andy Bassadone for over 25 years and have carried out over 200 individual restaurant fit outs for him during that association.

Market Opportunities

Site availability

A significant number of restaurant operators have either entered into administration, launched a CVA process or are closing sites in response to the lockdown. The Directors understand that due to this pressure on restaurant groups, and the desire to ensure occupancy on the part of the landlords, there has been an aggressive renegotiation of the terms of many existing leases with some groups negotiating up to 25% rent reductions. The Directors believe that, as the economic fallout continues, the element of the rent linked to turnover (and therefore linked to performance of the tenant) rather than a fixed amount will increase and base rents will reduce accordingly. As a result, the Directors also believe that there will be a power shift in favour of tenants and operators in the longer term, with potential one-way tenant breaks, upward and downward rent reviews and turnover-linked leases.

Acquisition Opportunities

The Directors have observed that some groups of high-quality concepts are struggling to stay afloat and are seeking funding, resources and expertise. A number of these such groups discussed potential collaborations with the team. These businesses have been identified as potential acquisition targets which could be incorporated into the Group utilising the experience of the wider management team and central function.

Reduced Competition

A significant number of branded chains have entered into the administration processes or are significantly reducing their estate. The Directors believe that the reduced competition post-lockdown, particularly in relation to Italian mid-market chains, provides a major opportunity, particularly for the growth of Tavolino.

Availability of Talent

Following the increased number of closures across the sector, the Directors believe that a much higher number of well-qualified people are available for positions post-lockdown. The increased availability of talented General Managers and Head Chefs, in particular, should assist the expansion of both of the Group's brands. 

Changes in consumer behaviour

Coppa Club in particular was designed specifically to take advantage of changes in consumer behaviour which have now been accelerated by Covid. It has been estimated that 50% of the UK workforce favour working remotely for 1-2 days per week post-lockdown. In addition, it has also been reported that safety is paramount for diners who are looking for social distancing, outdoor areas and sanitation in the restaurants they choose. The Directors believe that the Group is well placed to provide guests with a safe environment, given its sites with large outside seating which makes the implementation of social distancing possible, without eroding the customer experience.

Reasons for Admission and Use of Proceeds

The Directors believe that Admission is an important step in the Group's development which is expected to:

·     assist the Group by allowing it to advance its plans to roll out the Coppa Club and Tavolino brands;

·     allow greater access to capital to fund future activities, including acquisitions;

·     allow the Company to provide publicly quoted shares as a currency to vendors for the acquisition of suitable businesses;

·     facilitate the recruitment, and retention of, suitably qualified staff through the issue of options over publicly traded shares;

·     raise the profile and reputation of the Group within the industry; and

·     provide general working capital.

The net proceeds available to the Company from the Placing are intended to fund the roll out of Coppa Club; to fund the roll out of Tavolino; for acquisitions (if appropriate) and for general working capital.

The Directors have entered into lock-in agreements pursuant to which (subject to certain exemptions) they have undertaken not to dispose of any interest they hold in Ordinary Shares for 12 months following Admission.

Risks

Risks include execution risk; economic risk; cost inflation and COVID-19 having a second wave and/or local and national lockdowns causing as much disruption as has been seen in recent months. Before subscribing for or purchasing any shares in the Company, persons viewing this announcement should ensure that they fully understand and accept all risks which will be set out in the Admission Document if published.

Advisers

·     WH Ireland Limited as Nominated Adviser and Broker

·     RSM Corporate Finance LLP as Reporting Accountants

·     RSM UK Audit LLP as Auditors

·     Irwin Mitchell LLP as Solicitors to the Company

·     Alma PR Limited as Financial PR

Enquiries

Various Eateries plc
Yishay Malkov	Chief Executive Officer	Via Alma PR
Andrew Bassadone	Executive Chairman
Hugh Osmond	Non-Executive Director
WH Ireland Limited	Nominated Adviser and Broker	Tel: +44 (0) 20 7220 1666
Katy Mitchell
Harry Ansell	(Broker)
Lydia Zychowska
Alma PR	Financial PR	Tel: +44 (0) 20 3405 0205
Rebecca Sanders-Hewett		variouseateries@almapr.co.uk
Susie Hudson
David Ison
Harriet Jackson

About Various Eateries

Various Eateries owns, develops and operates restaurant sites in the United Kingdom. The Group's stated mission is "great people delivering unique experiences through continuous innovation".

The Group is led by a highly experienced senior team including Andy Bassadone (Executive Chairman), Hugh Osmond (Founder), Yishay Malkov (CEO), Oliver Williams (CFO) and Matt Fanthorpe (Chef Director).

The Group operates two core brands across ten locations:

·     Coppa Club, a multi-use, all-day concept that combines restaurant, terrace, café, lounge, bar and work spaces

·     Tavolino, a restaurant aiming to address a gap in the market for high quality Italian food at mid-market prices

For more information please visit the Group's website at www.variouseateries.co.uk.

Important Information

The contents of this announcement, which has been prepared by and is the sole responsibility of Various Eateries plc, have been approved by WH Ireland Limited solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 (as amended).

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed by any person for any purpose on the information contained in this announcement or its accuracy, fairness or completeness.

This announcement is not for distribution, directly or indirectly, in or into the United States (including its territories and possessions, any State of the United States and the District of Columbia), Australia, Canada Japan, South Africa or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. The distribution of this announcement may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement does not constitute or form a part of any offer or solicitation to purchase or subscribe for, or otherwise invest in, securities in the United States, Australia, Canada, Japan or South Africa or any other jurisdiction where it is prohibited to do. The Ordinary Shares referred to herein have not been, and will not be, registered under the United States Securities Act of 1933 (the "Securities Act"). The Ordinary Shares may not be offered or sold in the United States except pursuant to an exemption from or in a transaction not subject to the registration requirements of the Securities Act. There will be no public offer of securities in the United States or in any other jurisdiction.

In any member state of the European Economic Area ("EEA") and the United Kingdom, this announcement and any offer if made subsequently is, and will be, directed only at persons who are "qualified investors" within the meaning of the Prospectus Regulation (Regulation (EU) 2017/1129). In addition, in the United Kingdom, this announcement is being distributed only to, and is directed only at, qualified investors who are (i) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order, and (iii) persons to whom it may otherwise lawfully be communicated (all such persons together being referred to as "relevant persons"). This announcement must not be acted on or relied on (i) in the United Kingdom, by persons who are not relevant persons, and (ii) in any member state of the EEA other than the United Kingdom, by persons who are not Qualified Investors. Any investment or investment activity to which this announcement relates is available only to (i) in the United Kingdom, relevant persons, and (ii) in any member state of the EEA other than the United Kingdom, qualified investors and will be engaged in only with such persons.

Any subscription or purchase of the Company's shares in the possible Admission should be made solely on the basis of information contained in the Admission Document which may be issued by the Company in connection with the Admission. The information in this announcement is subject to change. Before subscribing for or purchasing any shares in the Company, persons viewing this announcement should ensure that they fully understand and accept the risks which will be set out in the Admission Document if published. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. This announcement shall not form the basis of or constitute any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any shares in the Company or any other securities nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefor.

The date of Admission may be influenced by a variety of factors which include market conditions.  The Company may decide not to go ahead with the Admission and there is therefore no guarantee that the Admission Document will be published or that Admission will occur. Potential investors should not base their financial decision on this announcement. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested.

Persons considering making investments should consult an authorised person specialising in advising on such investments. This announcement does not constitute a recommendation concerning a possible offer. The value of shares can decrease as well as increase. Potential investors should consult a professional advisor as to the suitability of a possible investment.

Nothing contained herein constitutes or should be construed as (i) investment, tax, accounting or legal advice; (ii) a representation that any investment or strategy is suitable or appropriate to your individual circumstances; or (iii) a personal recommendation to you.

None of WH Ireland Limited or any of their respective affiliates or any of their or their affiliates' directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for/or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the announcement or its contents or otherwise arising in connection therewith.

WH Ireland Limited is acting exclusively for the Company and no-one else in connection with the possible Admission. They will not regard any other person as their respective clients in relation to the possible Admission and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, nor for providing advice in relation to the possible Admission, the contents of this announcement or any transaction, arrangement or other matter referred to herein.

WH Ireland Limited is authorised and regulated by the FCA in the United Kingdom, is registered in England & Wales with company number 02002044 and is a member of the London Stock Exchange. WHIreland and the WHIreland logo are registered trademarks.

For the avoidance of doubt, the contents of the Company's websites (or any other website operated by or on behalf of the Company and/or its subsidiaries) are not incorporated by reference into, and do not form part of, this announcement.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect the Group's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Group's business, results of operations, financial position, liquidity, prospects, growth and strategies. Forward-looking statements speak only as of the date they are made.

In light of these risks, uncertainties and assumptions, the events in the forward-looking statements may not occur or the Company's or the Group's actual results, performance or achievements might be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements. None of WH Ireland Limited, the Company or any member of the Group, or any of such person's affiliates or any of their or their affiliates' directors, officers, employees, advisers or agents undertake to update, review or revise any such forward-looking statement or any other information contained in this announcement, except to the extent required by applicable law.

INFORMATION TO DISTRIBUTORS

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the Product Governance Requirements) may otherwise have with respect thereto, the Company's shares have been subject to a product approval process, which has determined that the Company's shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors should note that: the price of the Company's shares may decline and investors could lose all or part of their investment; the Company's shares offer no guaranteed income and no capital protection; and an investment in the Company's shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the possible Admission. Furthermore, it is noted that, notwithstanding the Target Market Assessment, WH Ireland will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Company's shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the Company's shares and determining appropriate distribution channels.

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