Under the plans announced this morning, all A and B shares will be converted into a single class of ordinary share, with the economic and voting rights of all shareholders being re-aligned.
The company said: “Shepherd Neame will remain a private limited company; family members, directors and employees’ aggregate beneficial interest immediately post the share capital reorganisation will be approximately 54% of the issued share capital and votes.”
“The board intends to grow the dividend rate payable to all shareholders with a view to a target dividend cover in the region of two times basic earnings per share pre-exceptional items in the medium term.”
The company said it has received “irrevocable undertakings” to vote in favour of the resolutions from shareholders holding 24.6% of the issued A shares (3.5% of the total voting rights) and 66.1%% of the B shares (56.6% of the total voting rights). Together they represent 29% of the total issued share capital and 60.1% of the total voting rights of the company.
Discussion
Meetings with the different classes of credits are to take place on 3 and 5 June, with the admission and first day of dealing of the ordinary shares set for 9 June.
Chairman Miles Templeman said: “Shepherd Neame is a highly successful family business with a proud heritage, a clear strategy and a bright future.
“Over the last few years, the board has taken some important steps to enhance its business with the acquisition of some excellent pubs and hotels, modernisation of the brewery and strengthening of our brand portfolio, as well as a business and board reorganisation to give clear focus to this strategic development and drive higher performance out of existing assets. The board believes it is well placed to deliver on its objectives and drive future value for shareholders.
“Following extensive consultation with our shareholders we have concluded that now is an appropriate time to simplify our governance and share capital structure and to re-align the voting and economic rights of ‘A’ and ‘B’ shareholders.
“We will continue as a private limited family company with our shares traded on the ISDX Growth Market as a low cost dealing facility and with considerable tax advantages.
“We believe this proposal is in the interests of all shareholders.”
Trading update
Separately, Shepherd Neame this morning said trade has “continued to be strong through the spring months”, with like-for-like EBITDAR up +4.1% in the tenanted estate, average EBITDAR per tenanted pub up +6% and like-for-like sales in its managed houses up by +8.8% for the 39 weeks to 29 March.
Total beer volume was down -0.3% following the termination of brewing bottled Kingfisher lager in October 2013. “The core own and licensed portfolio grew by +6%. This reflects a continued strong performance in our portfolio and good growth in the recently launched Whitstable Bay range,” the firm said.
“Following on from the success of the major redevelopment of the Marine Hotel, Whitstable in 2013, the Fayreness Hotel, Kingsgate has been fully refurbished and renamed The Botany Bay Hotel. The hotel opened on 22 March 2014 and trading to date has been ahead of expectations.”
It added: “The board is confident in delivering results for the 52 weeks ending 28 June 2014 in line with market expectations.”
The company is now in the process of commissioning a water treatment plant. It said it was currently in dispute with its local water company over the ending of a long-term agreement and that if it went to arbitration could end up costing them £750,000, which they would seek to reclaim.