OREANDA-NEWS. Upham Group plc, a collection of premium pubs with its own craft brewery, announces its intention to seek admission of its shares to trading on AIM ("Admission"), and raise up to ?12m to provide funds for further acquisitions.

Upham currently manages a portfolio of 15 high quality pubs, 13 of which it owns, principally in Hampshire, Berkshire and Surrey. It has opened four new pubs in the past 12 months, and the Group aims to double the size of the estate to 30 pubs in the medium term, subject to funding.

It has a highly experienced management team led by CEO Chris Phillips, and Deputy CEO and Estates Director David Butcher, who were recruited in 2011 to develop and roll out a pub acquisition strategy. The first pub to open was The Winning Post at Winkfield, Berkshire, in April 2012.

The Group seeks to buy pubs with growth potential in prime trading locations, in order to invest in the customer experience; increase the revenue generating space of the buildings; provide comfortable and stylish accommodation and improve the pubs' underlying operations. It believes there are more than 2,500 pubs in the relatively affluent geographic area in which it currently operates, up to a quarter of which would suit its acquisition criteria.

This strategy has resulted in all of the pubs in the current portfolio reaching an EBITDA positive run-rate within four months of the commencement of trading, and a valuation uplift (after acquisition costs, fees and renovations) of the total estate (including managed pubs) of ?10.3m to its current value of ?36.8m, according to Savills.

The pubs in the portfolio have approximately 1,075 covers in their main bar and restaurant areas (increasing by an additional 857 covers on the terrace/garden areas) and provide high-quality casual dining with a strong focus on local and seasonal produce with changing menus, a blend of inventive cooking and pub classics all using traditional ingredients.

Upham's high quality food-led model means that its pubs tap into the casual dining trend that has been evident in the past decade, during which eating out has risen to over 40% of total leisure spend, with consumers also eating out more frequently.

Upham Brewery, located in Hampshire, updated its equipment to a modern 30 barrel plant in 2013.  It brews three regular ales, Punter, Tipster, and Stakes; nine seasonal ales, and supplies approximately 300 local pubs. It also sells its beer in bottles through Majestic, Co-Op and Tesco.

Between 2011-2015 the Group raised approximately ?17.3m in equity, predominantly through EIS investments, and ?5.0m in preference shares to finance acquisitions and launch the modern barrel brewery. The ?17.3m was raised from circa 140 shareholders including family offices and private individuals.

Between 2013 and 2015 Upham's revenue grew to ?12.2m from ?4.6m, a CAGR of 64%; and EBITDA rose to ?0.9m from a loss of ?0.2m.

Charles Good, Upham Chairman said: "Upham Group's management team has used its significant experience to buy, develop and manage an exceptional collection of individual premium pubs, with each pub tailored to meet its local market.  

This successful buy, develop and manage formula has led to significant uplift in the value of the Group's estate, with further organic growth potential. This fundraise and Admission will provide Upham with the resources to build on our success."

Chris Phillips, Upham Chief Executive Officer said: "We have ambitious expansion plans, and see a wealth of opportunities around our existing locations, principally in Hampshire, Berkshire, and Surrey.  Upham's highly skilled and dedicated team provides a fantastic service, and has created a loyal customer base. We are very much looking forward to the exciting next chapter in Upham's history."

Additional Information

Directors:

Charles Good, Chairman

Charles, who co-founded The Upham Brewery in 2009, has 40 years' experience of investing in and mentoring companies from early entrepreneurial growth to institutional funding and exit. In the mid-1990s he played a key role in building Shoprite Group Ltd as Managing Director of its Scottish operations, to become Scotland's third largest food retailer, which was sold to Kwik Save in 1995 for ?55 million.

In 2001 he became Chairman of Blooms of Bressingham plc, an AIM quoted garden centre group, which was trading poorly and financially stretched. He led the policy to re-focus the business on larger newer centres. Five years later, with Blooms producing growing profits, he orchestrated its sale to Wyevale Garden Centres for ?30 million. He was Chairman of Hurricane Energy from 2006 until 2012, which at its peak was valued at ?630 million.

Chris Phillips, Chief Executive Officer

Chris, who joined Upham as CEO in November 2011, has over 30 years' experience in the hotel and pub trade. His career started with three years' training in the profession with Trust House Forte, from 1980 to 1983, in all aspects of hotel management working in various hotels mainly in the five and four star categories around London, Paris and the Home Counties.

From September 1983 to June 1985, he opened and set up the first three pubs in the highly visible and successful Slug and Lettuce chain. From June 1985 to June 2007, he was Managing Director and founder of Front Page Pubs. He bought, redeveloped and sold thirteen pubs, ten in central London and three in the Home Counties. The first pub was called The Front Page, on Old Church Street Chelsea, and the second The Sporting Page, in Limerston Street, Chelsea. Most were branded under the Page banner, one notable exception being The Lords Tavern which The MCC invited him to take over and redevelop. He successfully sold the company in June 2007 to Food and Fuel Limited.

David Butcher, Deputy Chief Executive Officer, Estates Director

David, who joined Upham in his current role in November 2011, is a chartered surveyor (MRICS) with 24 years' experience in the pub trade.  He started his career working for MARR Taverns, a 200 pub company set up following the MMC reports. The company specialised in turning around poorly run and under developed pubs. He then progressed as Property Manager for Inn Business Group, which owned and operated a mixture of managed and leased pubs, which was subsequently sold to Punch Taverns Plc.

Following this, David was Head of Tenanted Trade and Property for eight years at George Gale & Co where he was responsible for sourcing of pub acquisitions and tenants, and for running 80 leased pubs. He acquired ?25 million worth of assets over a five year period, which he subsequently developed and integrated into the estate. In the latter half of his time at Gales the group was awarded Pub Company of the Year in 2004 and 2005 by the trade journal, The Publican, before being sold to Fullers for ?92 million in 2006.  More recently, David co-founded the Powder Train Pub Company and was responsible for sourcing and acquiring sites, ongoing development and day to day operation of its portfolio.

Robb Harris, Finance Director

Robb, Upham's finance director since Oct 2014, is a chartered management accountant with extensive operational and management experience in the hospitality sector. He qualified in the industry with Kraft Foods, and subsequently worked in financial management roles with Tigi International, Channel 4 Television and Unilever.

In 2008, he joined Absolute Taste, a high end contract, retail and event caterer that is an autonomous part of the McLaren Group. As Finance Director, he overhauled all the financial elements of the business and contributed to a period of significant sales expansion including winning the London 2012 Westfield Stratford tender and the creation of a wholly owned Swiss subsidiary. After three years in that role, he was appointed to head up Absolute Taste's event business where he grew turnover from ?2.6 million to ?4.3 million in two years, more than doubling profits.

John McMillan, Non-Executive Director

John has over 30 years' experience in the City predominately in Institutional Sales. In 1985, he joined Vivian Gray before transferring to the Institutional Sales desk. John moved to Hoare Govett in 1988 and subsequently worked for Kleinwort Benson, Credit Agricole and Matrix. Fascinated by the UK growth in Real Ale sales, he founded The Upham Brewery in 2009 and ran it until 2012.

Nigel Bankes, Non-Executive Director

Nigel has spent his working career in the pub and brewery business. He joined Whitbread in 1983 and from 1989 to 2000 he was Operations Director of Whitbread Pub Partnerships, Whitbread's national leased pub business, responsible for the operation of 1,800 leased pubs. From 2000 to 2014 he was Chairman of Timothy Taylor, a Yorkshire-based brewery and pub company, which won the Champion Beer of Britain and best managed pub in the UK in 2014.

Keith Mullins, Non-Executive Director

Keith Mullins joined S G Warburg's investment management division in 1978. The division later developed into Mercury Asset Management and subsequently became Merrill Lynch Investment Managers upon its acquisition by Merrill Lynch in 1998. He therefore has many years' experience as a specialist UK equity fund manager. He left as a Managing Director of Merrill Lynch Investment Managers in 2001 and has since undertaken various investment-related advisory and consultancy roles. He is Chairman of Octopus AIM VCT 2 plc.

The Estate:

 

Pub

Location

Opening date

Covers

Bedrooms

Bar & Restaurant

Other1

Upham Brewery

Stakes Farm Cottage, Hampshire

Jan 2012

n/a

n/a

n/a

The Winning Post

Winkfield, Berkshire

Apr 2012

68

78

10

The Thomas Lord

West Meon, Hampshire

Aug 2012

75

70

-

The Navigator

Lower Swanwick, Hampshire

Sep 2012

95

134

23

The George Inn

Longbridge Deverill, Wiltshire

May 2013

72

120

12

The Running Horse

Littleton, Hampshire

Jul 2013

105

80

15

The Bunk Inn

Curridge, Berkshire

Oct 2013

74

117

9

The White Hart (South Harting)

South Harting, West Sussex

Nov 2013

65

120

6

The Wheelwright's Arms

Havant, Hampshire

May 2014

66

86

-

The Peat Spade Inn

Longstock, Hampshire

Sep 2014

65

62

8

The Plantation

Canford Cliffs, Dorset

Nov 2014

56

105

10

The Mill At Gordleton

Hordle, Hampshire

May 2015

88

98

8

The White Hart (Overton)

Overton, Hampshire

Jun 2015

93

56

12

The Swan Inn

Chiddingfold, Surrey

Sep 2015

84

60

11

The Hawk Inn

Amport, Hampshire

Feb 2016

72

68

9

The Inn On The Hill

Haslemere, Surrey

Sep 2016 (expected)

TBC

TBC

TBC

1 Other covers include private dining rooms, function rooms, terrace and garden areas, conservatories and tiki huts

  

IMPORTANT INFORMATION

This announcement which has been prepared by, and is the sole responsibility of, the Directors of the Company has been approved solely for the purposes of section 21 of the Financial Services and Markets Act 2000 by Zeus Capital Limited, which is authorised and regulated by the Financial Conduct Authority.

This announcement is an advertisement and does not constitute a prospectus or admission document in connection with an offering of securities of the Company.  Further, this announcement does not constitute, or form part of, any offer or invitation to issue, or any solicitation of any offer to subscribe for, any securities in the Company 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 or act as any inducement to enter into, any contract therefor.  Investors must neither accept any offer for, nor acquire, any securities to which this announcement refers, unless they do so on the basis of the information contained in the admission document to be published by the Company.  The subscription of ordinary shares in the Company is subject to specific legal or regulatory restrictions in certain jurisdictions.  Persons distributing this communication must satisfy themselves that it is lawful to do so.  The Company assumes no responsibility in the event there is a violation by any person of such restrictions. Copies of the admission document published by the Company will be available free of charge from the Company's registered office.

Zeus Capital Limited is acting only for the Company in connection with the matters described in this announcement and is not acting for or advising any other person, or treating any other person as their client, in relation thereto and will not be responsible for providing the regulatory protection afforded to clients of Zeus Capital Limited or advice to any other person in relation to the matters contained herein.

Neither Zeus Capital Limited, nor any of its 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 information relating to the Company, whether written, oral, or in a visual or electronic form, and howsoever transmitted or made available or any loss howsoever arising from any use of this announcement or its contents or otherwise in connection with it.

The value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment you may get back less than you originally invested. All of the value of an investor's investment in the Company will be at risk. Past performance is not a guide to future performance and the information in this announcement or any documents relating to the issue cannot be relied upon as a guide to future performance. Persons needing advice should contact a professional adviser.

This announcement may not be published, distributed or transmitted by any means or media, directly or indirectly, in whole or in part, in or into the United States.  This announcement does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States.  Securities may not be offered or sold in the United States absent registration under the U.S. Securities Act of 1933, as amended (the "Securities Act"). The securities mentioned herein have not been, and will not be, registered under the Securities Act and will not be offered to the public in the United States.  The Company has not been, and will not be, registered under the US Investment Company Act of 1940, as amended.

Neither this announcement nor any copy of it may be taken or transmitted into or distributed in any member state of the European Economic Area (other than the United Kingdom), Canada, Australia, the Republic of South Africa or Japan or any resident thereof.  Any failure to comply with these restrictions may constitute a violation of the securities laws or the laws of any such jurisdiction.  The distribution of this announcement in other jurisdictions may be restricted by law and the persons into whose possession this announcement comes should inform themselves about, and observe, any such restrictions.

The anticipated timetable for Admission, including the publication of the admission document and/or the date of Admission, may be influenced by a range of circumstances, including market conditions. There is no guarantee that the admission document will be published or that Admission will occur and investors should not base their financial decisions on the Company's intentions in relation to the placing of shares and Admission at this stage.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this announcement.

This announcement may include "forward-looking statements". All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's investment strategy, plans and objectives and target returns are forward-looking statements.  Forward-looking statements are subject to risks and uncertainties and accordingly the Company's actual future financial results and operational performance may differ materially from the results and performance expressed in, or implied by, the statements.  These factors include but are not limited to those described in the formal admission document.  These forward-looking statements speak only as at the date of this announcement.  The Company and Zeus expressly disclaim any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so by the Financial Services and Markets Act 2000, the AIM Rules for Companies or any other applicable laws, regulations or rules.