Electra to demerge Fridays under Hostmore parent company
Electra Private Equity has confirmed it plans to demerge its Fridays and 63rd+1st brands under a new parent company, Hostmore.
The firm announced plans to demerge the brands earlier this year. It is planned that the shares in Hostmore will be admitted to the main market of the London Stock Exchange in the fourth quarter of this year.
Then, later this year, Electra will be renamed Unbound Group, as the parent company of Hotter Shoes, and transition to AIM.
Hostmore has been created to provide a platform for the development of hospitality brands to supplement the continued growth of Fridays, the American-themed casual dining brand, and 63rd+1st, a new city-based, cocktail-led bar and restaurant brand. The management team of Hostmore will continue to be led by Robert Cook as chief executive officer and Alan Clark as chief financial officer.
Over the 16-week period since the resumption of restricted indoor dining on 17 May, the Hostmore brands reported like-for-like growth against 2019 averaging 11.8%. In the seven weeks since the further reduction of Covid-19 restrictions on 19 July, this growth averaged 15.2%.
Net debt, adjusted to include all Covid-related accruals, reduced to £36.4m at the end of August from £46m at the end of December 2020. Cash generated from operation over the three complete months since reopening, June to August, has been £12.5m reflecting a 91% conversion of earnings before interest, tax, depreciation and amortisation (EBITDA).
Cook said: "We are delighted with the continued strong performance of our two brands, Fridays and 63rd+1st. Fridays continues to outperform the market and we are opening our next two 63rd+1st sites – in Glasgow later in September and Harrogate in November – following a successful launch in Cobham earlier this year in May. While the industry continues to face Covid-related challenges, I am confident in our ability to continue managing these well. We remain on track for listing Hostmore later this year, and our strong performance despite the challenges of the last 18 months underpins our confidence in our ability to create long-term value for shareholders."
They will be supported by Neil Johnson, chairman and chair of the nominations committee, who has committed to chairing Hostmore for approximately six months from its listing until its Annual General Meeting in Spring 2022; senior independent director David Lis, who will stand down from the Electra board prior to admission; and Gavin Manson as a non-executive director, who is chief financial and operating officer of Electra and will stay on the board as it transitions to Unbound Group.
Hostmore's board will also be joined by three newly appointed independent non-executive directors: Andrew Blurton, Louise Stonier and Jane Bednall. Blurton is finance director of Advanced Living, Stonier is chief people and culture officer of Pets at Home Group, and Bednall is a non-executive director of DFS Furniture.
Johnson said: "We are pleased to have assembled a strong board to lead Hostmore as a newly listed group in the hospitality and leisure sectors. With these new appointments we have brought together significant experience in governance, finance, people and consumer markets, together with relevant sector and risk management expertise. These capabilities will promote the strategic development of the business and will complement the expertise of the senior leadership team led by Robert B Cook."
