LONDON (Alliance News) - Shares in Patisserie Holdings Ltd, owner of cafe chain Patisserie Valerie, started conditional dealings Wednesday respectably above its offer price, after it became the latest retail chain to list on London's AIM market.
Patisserie Holdings shares were quoted at 185 pence Wednesday morning, 8.8% above its IPO price of 170 pence. It also rose at the open, from an opening price of 177.25 pence. The shares start unconditional dealings on Monday next week.
The Birmingham-based company, which operates across five brands, which also include Philpotts sandwiches, said it raised GBP32.8 million before expenses via the initial public offering of 46.6 million new and existing shares with institutional and other investors.
Patisserie's IPO price gave it a market capitalisation of around GBP170 million.
Patisserie said the net proceeds will be used primarily to repay all of its existing outstanding senior debt of approximately GBP21.9 million and shareholder loans of around GBP10.8 million.
The company said it is also hoping to expand, having identified over 250 further potential sites in the UK.
In addition, it said, the selling shareholders will receive gross proceeds of GBP46.5 million pursuant to the placing.
On admission to AIM, the company had 100 million shares in issue, with a free float of 48.4%.
"We have grown the business from 8 stores to 138 today, and I'm delighted that our new investors have recognised the potential to roll out Patisserie Valerie further," said Executive Chairman Luke Johnson in a statement.
Johnson, the company's largest shareholder, now owns 42.7% of the company following the placing, while the remaining directors and members of senior management own 5.9% of the company.
Johnson, which chairs private equity house Risk Capital Partners LLP, previously held a shareholding of around 70% of the company.
The IPO was led by Canaccord Genuity, acting as the company's financial adviser, nominated adviser and broker.
For the year ended September 30, 2013, the group reported revenues of GBP60.1 million, up from GBP49.5 million the prior year, and booked revenues of GBP35.7 million for the six months ended March 30, 2014. It reported earnings before interest, taxes, depreciation and amortisation of GBP7.1 million for the six months just ended, which it said was driven by growth from its stores and its online business.
Patisserie Holdings has grown the business both organically and through strategic acquisitions.
As well as Patisserie Valerie and Philpotts, it also operates the cafe chains Baker & Spice and Flour Power City Bakery and currently operates from 138 stores and the Flour Power City Bakery across the UK.
The company has said it expects to pay a maiden dividend in the financial year ending September 30, 2015.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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