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Bar operator Nightcap has announced the proposed cancellation of admission of its ordinary shares to trading on AIM, a re-registration as a private limited company, and adoption of new articles of association.
As a result, directors have undertaken an “extensive” review to evaluate the benefits and drawback to the company and its shareholders of retaining the admission to trading on AIM of the ordinary shares.
This review has included, amongst other matters, the value that the current market capitalisation ascribes to Nightcap, the liquidity of the ordinary shares, the ability to raise further equity through public markets at an acceptable price and the cost of maintaining a public quotation.
For these reasons, the directors have concluded that the proposals are “in the best interests of the company and its shareholders as a whole”.
The Company has received “irrevocable” undertakings from several shareholders and the directors, representing approximately 76.9% of the company’s issued share capital, to vote in favour of the resolutions.
Gareth Edwards, chair of Nightcap, said: “We have not taken this decision lightly, however, following an extensive review and deliberation, the board has unanimously concluded that it is in the best interests of the company and our shareholders to cancel our AIM admission and re-register as a private limited company.
“The board believes that Nightcap’s current public market valuation does not reflect the underlying potential of our business or our achievements to date and that this is unlikely to change in the short-to-medium term.”
He added: “We believe that we will be able to continue to execute on our strategy as a private company and therefore we believe that a cancellation of the company’s admission on AIM is in the best interests for shareholders and for the future of our business as a whole.”
Trading throughout 2024 has remained challenging for the sector, with the main headwinds coming from the continuation of the cost-of-living crisis, above inflation increases to business rates, as well as the impact of the rise in the national living wage.
For the year ended 30 June, Nightcap still expects to report revenues that are in line with current market expectations, with adjusted EBITDA expected to be below current market expectations.
