Pizza float reheated

BrightReasons to try again after last year's abandoned £75m issue
MICHAEL GUTHRIE, the head of BrightReasons, the pizza chain forced to abandon a £75m stock market flotation last November, is thinking of trying again as early as September.

Sources close to the company said it would like to attempt a flotation this autumn but that there will be no announcement until a firm date and a timetable have been hammered out.

BrightReasons, which operates the Pizza Land and Pizza Piazza restaurant chains, blamed market conditions for abandoning last November's flotation. Operating profits to the year ending in September were £6m, before interest charges of around £1m, on a turnover of £76m.

Mr Guthrie dismissed City speculation that investors, frustrated by the aborted flotation and worried about his health, were about to push through management changes.

Speculation about Mr Guthrie's future grew when he stepped down last month as chairman of Pavilion Services, the motorway services group, after it became clear that its venture capital investors wanted to sell the business.

But this weekend he was adamant. "I ain't packing up from BrightReasons," he said, adding that he felt perfectly healthy in spite of minor heart problems he suffered several years ago.

Ian Armitage at Mercury Asset Management, the group's majority shareholder, said he had complete faith in Mr Guthrie.

"I am delighted with progress at the group," he commented.

According to Mr Guthrie: "There was nothing to do any more at Pavilion once it was decided to sell rather than expand the group. The shareholders do not need an army of people there if they are not going to take the business forward.

"But the situation is different at BrightReasons. We have just arranged a three-year financing package, which enables us to open another 20 sites by the end of the financial year, and I am very relaxed about the way things are going."

Lazards, the merchant bank, has been appointed by Pavilion to advise on a sale of the company. Although Pavilion has traded profitably at the operating level since Mr Guthrie's £89m management buy-in from Rank Organisation in 1991, it has been forced to make large asset write-downs and has spent heavily on opening new service stations.

In 1993, Pavilion made pre-tax losses of £15.7m on turnover of £118.2m.

It is understood that the short-list of buyers for Pavilion includes Granada and two oil companies - possibly British Petroleum and Esso.

Oil companies are said to be keen to break into the motorway service business as a way of extending their retailing concepts at motorway service complexes.