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Good move to check out yourself, always the best way to approach an investment like this.
Here's a recent recording from Wallingham.
https://www.**********.co.uk/articles/sarah-willingham-of-nightcap-discusses-their-impressive-growth-and-expanding-pipeline-c558abf/
I looked the company up after a night out in the Exeter ****tail Club, very busy had to que to get in and ended up leaving in the early hours of the morning, fun place to be good vibe and no issues. Interested in making a investment in the buissness here so far I like what I see, doing my own research to see if it'll be a good long term move for me.
Yeah - have been in a decent selection of their bars across a number of their brands.
I like how they keep differentiated from the mainstream multi site operators - they are noticeably busier than their peer group and the bars have a real energy about them.
revenues are rising nicely each quarter - up c25% from Q2 to Q3 although with new bars opening it is difficult to get a like for like comparison.
With more bars opening in April Q4 should see a similar increase so YE revenue could be c £35m to £40m (is £25.2m after 9 months).
IMHO cash is still a concern - £7m is decent (was £9m on 26/12) but there are borrowings and also trade payables to factor in so the actual position is less clear. This was addressed in the Investor Meets presentation a month or so ago but the response was a little vague.
The positive is that current bars are cash generative - was over £1m in H1, so clearly the better the trading the more cash that is being generated. This should hopefully fund the new leases and store re-fits etc.
Has anyone been to any of the bars? I'm Manchester based so a bit far for me.
We are delighted with how Nightcap is progressing. So am I Sarah, well done Team !
Hahaha. Like there's gonna be another lockdown. Absolutely zero chance of that.
bojo has not ruled out another lockdown -see sky news
Any further insights given to the cash vs liabilities situation?
Actually looking a the interim results that were recently released cash may be a little tight. The EBITDA figure and cash generated were both positive which is good, however, the balance sheet is less strong.
Comparing the YE results nightcap had current assets of £14.3m v current liabilities of £11.5m. At H1 it is now assets of £11.7m v £13.7m liabilities - so in the short term we have a £2m shortfall (and a 6 month negative change of c£4m) . Clearly not all these payments need to be made at once but it's not a good indicator of a supposedly cash generating company.
It will be interesting to see if this is mentioned in the Investor Meets presentation today
IMHO cash is ok unless the purchase another brand. NGHT's strategy is to increase their venues, but i see this predominantly as expansions to existing brands . Of the 25 negotiations not all will reach a positive conclusion and it is currently a good time to get empty spaces at knock down prices. Also, if we do come out of the pandemic, as is now expected, then the timing could be ideal. Also, these are leases, not freehold purchases, so the upfront cost is a lot lower, although clearly the new venues will need to be kitted out internally so this will incur some costs - maybe £50k per venue?
Finally, hopefully the current venues will be cash generative so cash should be growing from the main operations.
...hello all. Has anyone considered the cash requirements here (from 10th Jan update) "Nightcap currently has a further 25 sites in legal negotiations or under offer across several of its brands. The Group expects for several new site leases to be entered into before the end of March 2022." - goes on to say £9.4m in the bank. Enough? Any signs of a raise on the horizon?
Have moved on from Nightcap, wish all current shareholders well. Just spotted this online and thought some of you might be interested.
https://www.leeds-live.co.uk/best-in-leeds/restaurants-bars/leeds-bar-revolution-turn-huge-22775783
I heard Nightcap have just won a huge contract to supply booze and bars for Downing Street - should act as a good hedge against any future lock downs.
seems a solid update as we have almost been in semi lockdown for the last couple of months.
Regarding cash, yes looks fine. Was over £12m in Sept but we have spent c£3.6m on acquisitions since then plus upgrades to bars etc
Yeah simply put me too
Well, I like it.
Assume this is the same Mark Ward who owns c10% of RBG and also a fair bit of IDP. He is a very wealthy smart cookie, so IMHO it bodes well that he is increasing his holding here
Rapid growth that will be 15% in one day! roll on Xmas .
ShandyPants - I share your view as well.
Revs was making good progress before Covid hit - the De Cuba bars usually out performed the vodka bars, however, in line with the rest of the industry I believe Revs are now seeing their younger focussed brand (Revs Vodka is 18 to 24 focussed, de cuba is 24+) outperform their slightly older focussed brand. We also saw this in 'spoons where draft beer was significantly down but drinks favoured by a younger clientele were significantly up.
Thankfully we don't all get excited by the same thing - I invest in Boo, it's not because I like £10 dresses... It's because I see significant upside in the mid term. I don't personally like tequila however the numbers look attractive to me and will significantly add to both the top and bottom line of Nightcap, this acquisition seems to make a lot of sense.
I wouldn't see them rolling it out to smaller towns but larger towns and cities could easily support one of these.
If we grow to 20 ****tail clubs, 20 Adventure Bar group bars and then 10 of these... that gives... wait for it... 50 bars.. I'm not just a pretty face..
Not bad considering where we started from. I'm actually happy seeing a lot of 'bought growth' - Nightcap was launched as an acquisition vehicle...
Fastduck - surely the cuba bars are the best in the revolution range - the standard revolution brand appears to be the issue. Also not sure how you can say RBG were on the slide before covid - the H1 and xmas 2020 period were really good - then covid hit.
This deal looks encouraging IMHO. The 60s theme bar is a stand alone brand the the others will appeal to the younger crowd who appear to be the big spenders ATM. Difficult to determine whether the price is good as revenues/trading was impacted by Covid. I like that 3 of the 5 bars have a kitchen as food ensures it can appeal to many people throughout the day, rather than just the late night drinkers/clubbers.
Definitely, its not a small town, quite few bars and several nightclubs.
Is there scope for another similar bar in your town?
I live in a town 200 mile from London and one of, if not the most popular bar's is casino de cuba and was for a long time pre covid
Latin themed bars do not excite me. As I pointed out in a previous post, Revolution were on the slide before Covid. The 60's themed bar is probably ok for London. Expansion sounds great but no use opening expensive bars in poorer areas of the UK where there aren't enough young people with the money to spend. I want to see some genuine numbers, not bought growth. Nightcap need to demonstrate they are worth backing before acquiring again. Unless they do, the share price will be stuck around 20p or more likely less. |Institutions won't buy because they are looking for management capable of creating organic profit growth generating cash. When they need to raise more money, the sp will fall further. Before then I will thankfully be out.
These guys are doing exactly as they said they would, they are well on the way to creating a significant bar group.
This acquisition looks to be great value, perhaps not as good a deal as the previous acquisition however times have changed.
Good to see them add another concept but one which allows them to take advantage of the synergies from the larger group.
With their stated roll out strategy you can see them getting up to 50 bars pretty quickly. I’m assuming they’ll roll this new concept out to some of the larger cities in the UK.