Nightcap, the owner and operator of 46 premium bars, has announced plans to delist from London’s AIM market and continue as a private company.
The decision comes as the hospitality sector continues to face significant headwinds and the bar operator said trading throughout 2024 has remained difficult.
Nightcap expects these tough conditions to persist until the end of the calendar year and points to the ongoing cost of living crisis, above-inflation increases in business rates, the impact of higher National Living Wage, and continuing rail strikes as reasons for the slow trading environment.
For the 52-week period ending 30 June 2024, Nightcap anticipates revenues to be in line with current market expectations. However, adjusted EBITDA is projected to fall below market forecasts. This shortfall is attributed to the aforementioned economic pressures, coupled with additional costs associated with the integration of The Piano Works acquisition, which has proven more expensive than initially anticipated.
The company’s financial performance has also been affected by abortive deal costs and expenses related to the proposed AIM delisting.
Nightcap said the current public market valuation does not reflect the company’s underlying potential or achievements to date. Many UK small cap companies will have the same gripe.
However, Nightcap believes this situation is unlikely to change in the short to medium term and is throwing in the towel on its time as a public company.
The company IPO’d in 2021 but hasn’t really embraced life as a public company. Investors have heard little from the company since listing, and the board have done little to communicate with the wider market. The lowly valuation should come as no surprise to management.
To facilitate future share transactions, Nightcap has appointed Asset Match Limited to provide a matched bargain facility, which is set to commence operations from the delisting date. This electronic off-market dealing facility will allow existing shareholders and new investors to trade Nightcap shares through periodic auctions.
