Rich coffee flotation

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THREE founders of Madisons coffee bars stand to become multi-millionaires when the group floats on the Alternative Investment Market.

Gareth Lloyd Jones, who used to run Tie-Rack outlets, Simon Broackes, a former property expert with Sir Robert McAlpine, and Mark Horrocks, a fund manager, all stand to make paper profits running into millions. They are also considering making an instant profit by selling shares in the flotation. City Gourmet, the group which owns the chain, will be valued at pounds 15m-pounds 20m when it joins the market inthe next few months.

The three entrepreneurs bought the business in 1995. The group operates seven coffee bars and plans to open 12 sites during 1998. It is looking at new outlets in Cardiff and Manchester.

The coffee-bar concept was imported from America and the idea is catching on fast in the UK. The popularity of the new bars has prompted Seattle Coffee Company to unveil its own flotation plans. However, City Gourmet claims that by offering a wide range of teas and sandwiches it appeals to a wider audience than rivals.

Meanwhile John Weatherill, a former mobile phone salesman, and his family are sitting on a pounds 15m fortune after JWE, the mobile phone distributor, confirmed plans to float on the stock market next month. Mr Weatherill is selling shares worth pounds 3m in the flotation and his family will still own more than 60 per cent of the group, which is likely to be valued at around pounds 20m. JWE has released a pathfinder prospectus predicting pre-tax profits of not less that pounds 1.5m for the year to March. JWE Telecom has a chain of 21 mobile phone shops and acts as a distributor of phones to 300 dealers. It is raising roughly pounds 4m of new money to expand the business.