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UK Leisure Sector - Q3 2015


Click here to download the UK Leisure Sector - Q3 2015 summary

Summer is over, the buckets and spades packed away, and soon Christmas trees will start popping up in shops up and down the country. However, Q3 2015 proved as active as the first half of the year, with another steady flow of corporate M&A from all leisure sectors.

August was surprisingly active in the pub sector where transactions saw Pubs sell 158 pubs to NewRiver Retail for £53.5m, equating to £339,000 per pub and an income multiple of 7.3x. This was quickly followed by Greene King who sold 16 pubs that it agreed to dispose of to meet regulatory concerns in the wake of its acquisition of Spirit. Heineken picked up 13 of the pubs primarily in Oxfordshire and Nottingham. Completing an active couple of days, saw Red Oak Taverns, led by Mark Grunnell and Aaron Brown, acquire 146 pubs from the administrator of the GRS group of companies. Following the acquisition, Red Oak Taverns will own over 170 pubs across the United Kingdom.

Early September led to further activity, with the sale of the 26 strong Jupiter Hotels portfolio of Mercure properties for £77.5m to a Thailand based consortium. Punch subsequently entered into an agreement to sell its 50% shareholding in Matthew Clarke for £100.7m to Conviviality Brands, which will sell Punch's joint venture partner, Hertford Cellars Ltd, also sell their 50% shareholding to Conviviality. Sold at almost twice book value, and presenting a multiple of 12.9x post tax profit for the year ending August 2015, the transaction received generally positive response from the market.

Perennial top performer, Whitbread, constituted their impressive growth with Q2 FY 15/16 Life-for-Like growth of 4.3% at Premier Inn and 4.0% at Costa. Total company sales grew by 11.1%, driven in part by the performance of London where sales grew 21.1% on the back of a 20.3% increase in rooms available. Perhaps most satisfying for their shareholders is the impressive pipeline of rooms, which has grown to over 14,000 rooms, ensuring the growth story has a few more chapters to be written.


UK Leisure Sector Q3 2015 Highlights

July 2015

Restaurants: Casual Dining Group acquires the 41-strong Las Iguanas restaurant chain from private equity firm Bowmark Capital in a deal thought to be worth between £80m and £90m.

Restaurants: Azzurri Group completes the deal to take over Coco Di Mama, the currently six-strong quick-service Italian concept.

Leisure: Businessman Peter Sedgwick has now bought all three of Blackpool's piers. He acquired the town's North Pier in 2011 and has now purchased the Central Pier and South Pier, which were on the market for £8.1m.

Hotels: MCAP Global Finance acquires two Ramada hotels in the UK from Shiva Hotels for more than the £21.5 million guide price. The 90-room Ramada Birmingham City and the 142-room Ramada Manchester Salford Quays will be managed by Valor Hospitality.

August 2015

Leisure: OLIM Property Ltd buy 5 freehold bowling centres for £12,800,000 for BAE Systems Pension Fund Trustees. The average net initial yield is 7.44%.

Leisure: LN-Gaiety Holdings, a joint venture between Live Nation and Gaiety Investments, completes the acquisition of venue and festival operator MAMA & Company from private equity firm LDC.

Restaurants: Drake & Morgan saw its turnover increase 20% to £24.6m in the year to 29 March 2015.

Pubs: Punch Taverns sells 158 pubs to NewRiver Retail for £53.5m, at an average of £339,000 per pub. 150 pubs from the non-core estate and 8 pubs from the core estate. The deal reflects a multiple of 7.33x.

Pubs: Red Oak Taverns, the circa 30-strong pub operator led by Aaron Brown and Mark Grunnell, acquires 146 GRS Group tenanted pubs for an undisclosed sum, thought to be in the region of £36m.

September 2015

Hotels: Jupiter Hotels sold to Thai group in £77.5m deal. The 26-strong Jupiter Hotels portfolio of Mercure properties has been purchased by Thai Industrial and Engineering Service.

Pubs: Punch Taverns has entered into an agreement to sell its 50% shareholding in Matthew Clark to Conviviality Brands, a wholly-owned subsidiary of Conviviality Retail, for £100.7 million in cash.

Leisure: Deltic Group, the UK's largest nightclub operator, has reported like-for-like sales increased by 7.5% in the 26 weeks to 29 August 2015.

Pubs: Stonegate Pub Company acquire 53 pubs from Tattershall Castle Group for an undisclosed sum. The acquisition includes the famous Tattershall Castle flagship floating bar which is moored on the River Thames.


Contact Details:

Graeme Bunn
Managing Director
T: 020 7280 4740
M: 07776 208085