Nightcap plc has revealed that it will be launching a roll-out programme to expand from the existing 10 sites to up to approximately 40 sites over the next five years.
Nightcap was incorporated on 23 September 2020 to take advantage of the significant changes taking place within the premium bars segment and the hospitality industry more generally in the UK.
The group's successful fundraising and the admission to trading on the AIM market of the London Stock Exchange completed in 13 January 2021 during the worst crisis faced by the UK hospitality industry in our lifetime. On the same day, the firm acquired The London Cocktail Club Ltd (LCC) for £5.7m.
During the period from incorporation to 31 December 2020, Nightcap had no turnover and incurred costs of £318,342, which predominantly represented accrued fees in connection with the admission of the firm's shares to trading on AIM.
Sarah Willingham, CEO & Co-founder, (pictured) stated that the firm believes that drinks-led hospitality will come back stronger than ever during 2021, helping us on our mission to be one of the UK's leading bar groups.
Willingham continued, 'On the back of the UK Government's successful vaccine programme and its roadmap to start reopening hospitality from mid-April onwards the opportunities for Nightcap are enormous.
'With an experienced, driven team and 10 venues ready and waiting to once again serve the 'millennial pound', we look forward to delivering our commitment to capitalise on this opportunity.
'Nightcap has been set up to acquire, re-capitalise and develop drinks-led concepts with significant potential across the UK. The impact of the COVID-19 pandemic on the hospitality industry has been immense and we are well placed to support entrepreneurs and businesses that have suffered during the pandemic.'
Willingham went on, 'We are proud to be part of the hospitality industry's road to recovery. As we forecast on IPO, we are already seeing evidence of the unprecedented opportunity to develop and grow fundamentally sound businesses which have been adversely affected by the events of the past 12 months.
'These businesses still have strong and motivated leadership teams but lack the capital to grow. With targeted investment and a highly experienced team, we are confident that our prospects for growth through acquisition and organic roll out are excellent.
'Since the acquisition of The London Cocktail Club Ltd, management is putting in place a roll-out programme to expand from the existing 10 sites to up to approximately 40 sites over the next five years and we are currently in negotiations on several new leases inside and outside of London.
'In line with our expectations, the damage done to the property and hospitality sectors by the pandemic is allowing us access to new sites in prime locations with better rents, increased incentives and lower capital costs per site than previously experienced. We are confident of our ability to provide even better returns on our capital employed than historically.'
Willingham ended, 'But above all, we look forward to continuing to do what we do best - looking after our customers, showing them a great time, opening new sites and giving great people meaningful careers.'
Current trading
As dictated by the UK Government, all of LCC's bars remain closed under the nationwide lockdown restrictions put in place on 4 January 2021. LCC's management have worked hard to reduce all business costs to keep its cash burn to the lowest possible amount.
Continuing from the first nationwide lockdown in the first half of 2020 LCC has benefited from certain UK Government support schemes including, amongst others, the Coronavirus Job Retention Scheme, the Coronavirus Business Interruption Loan Scheme, VAT deferral and hospitality business rates relief at applicable locations.
Since the start of the COVID-19 pandemic, LCC has re-negotiated the majority of its property leases, securing rent reductions for periods when its estate has been closed, as well as reducing the rent liability going forward.
Nightcap has also taken other steps to mitigate the effects of the UK Government's current national lockdown, which has included Directors salary sacrifices and cost reductions.