David Bruce plans Capital Pub float
Pub entrepreneur David Bruce is planning his first venture onto the stock market.
The founder of the Firkin chain is working on an AIM launch for Capital Pub Company, the business he founded three years ago with fellow director Clive Watson, formerly FD at Regent Inns.
Messrs Bruce and Watson (pictured) plan an AIM debut for Capital by April 2006. However, depending on market conditions the float could come earlier as the company looks to raise funds for expansion, as well as to repay its initial backers.
Capital currently operates 16 London pubs, owing the freehold of all but one. The business has been funded through two tax-efficient Enterprise Investment Schemes (EIS), the second of which was launched in January this year.
Capital is looking to raise finds to provide an exit strategy for its initial EIS investors, most of whom are private individuals.
Cash from an AIM float would enable the directors to remain involved with the business, rather than follow Mr Bruce's more familiar strategy of a trade sale to a larger operator.
Capital's focus on traditional community pubs, such as Ladbroke Arms in Notting Hill and its recent acquisition the Larrik on the New Kings Road, has paid off.
In the year to the end of March, turnover increased 61 per cent to £6,771,000, with pre-tax profits more than tripling to £668,000. The balance sheet was helped by booming London property prices, with the revaluation adding £482,000 to the value of the London freeholds.
Mr Bruce said: "We are extremely encouraged by this strong set of results, especially given the fact that The Capital Pub Company only started trading in October 2001 and the equity fundraising exercise wasn't completed until April 2003.
He added that the results "prove our commitment to non branded, off high street pubs is the right one and highlight the strength of our investment case."
Capital will consider more leases along the lines of the Larik, acquired in June on a 30 year free-of-tie lease, where a high level of sales can be generated.
However, Mr Watson insisted that this does reflect any shortage of freehold opportunities. He said: "We've just completed on the Kew Gardens Hotel, an underinvested site with fantastic potential."
