Yates Wine Lodges lowers price of flotation
Thursday 14 July 1994
Yates will raise pounds 10m placing 7 million shares at 140p each, a discount to the stock market prices of its nearest quoted rivals, Regent Inns and JD Wetherspoon. The price values Yates at pounds 54m.
Peter Dickson, managing director, said: 'We have taken the market conditions into account. We believe we have left something in the price for institutions.
'The key requirement is to widen our institutional shareholder base of five. We have had a lot of institutional interest and expect to have another 25 on board post-flotation.'
Yates is raising money to repay debts and to double the size of its retail outlets to 100 in the next six years. They are concentrated in the north-west, although there are also bars in Glasgow and London.
The cost of buying a freehold outlet, typically with 2,000 sq ft of selling space, is about pounds 200,000 with another pounds 550,000 to furnish in Yates' Victorian style. Each bar generates a return on investment of 20 per cent in its first year of opening. Six more outlets are under construction.
In the year to 27 March, the company lifted taxable profits from pounds 2.8m to pounds 3.4m on sales ahead from pounds 34.6m to pounds 42.9m.
Bottom Line, page 34
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