Novus Leisure, the operator of 52 primarily London based premium bars and clubs, as well as Tiger Tiger in nine towns outside London, has secured new joint owners LGV Capital and Hutton Collins. LGV and Hutton Collins have backed the existing management team, led by Steve Richards (CEO), in a deal worth £100m. John Kelly will remain as non-executive chairman. The transaction has provided an exit for the incumbent majority shareholders Barclays Ventures and RBS Strategic Investment Group.
LGV and Hutton Collins will support the Group’s future strategy to double its central London portfolio over the next three years. The Group will have access to tens of millions of pounds of growth funding to strengthen its existing footprint and increase its estate by a third. This will consolidate and enhance Novus’ market leading position in the premium bar London market. Novus also has the potential to expand outside its London core to cities such as Manchester, Bristol and Leeds.
Novus has continued to trade well in the year ended 30 June 2012 with total (52 venues) revenue growth of 25.5%. Correspondingly, profit has increased by 51% in the year ended 30 June 2012. Like for like sales (37 venues) for the year were 11.3% or 21% on a two year basis.
Revenue has been driven by Novus’ well invested, sophisticated and state of the art pre-booking system and a strong performance from new sites including the acquired Balls Brothers estate. Pre booked sales accounted for 55% of sales throughout the year and are forecast to hit 65% within 24 months.
Profit has been enhanced by concentrating on ‘high margin’ corporate parties and events of which food accounts for 35% of sales. In addition the business has concentrated on ‘premiumising’ its range of wine, cocktails and spirits and extending its trading window to the extent that 60% of revenue is now taken pre – 11pm.
Steve Richards, Novus CEO, commented:
“Novus has a resilient model that has served it well over the years. Our focus and investment in our pre-booked system has given us the ability to take market share and deliver predictable high quality earnings. These attributes have resulted in keen interest by the private equity community to invest in the next stage of Novus’ development and in LGV and Hutton Collins we have secured investors who have an enviable record of backing successful businesses in the leisure sector. We really look forward to working with them over the next few years and to maximise the growth potential of Novus Leisure”
Bill Priestley, Managing Director, LGV Capital said:
“We are delighted to have completed this acquisition. Novus has one of the best collection of bars and venues in the UK, which, together with its website, Late night London has enabled it to outperform its market and peer group for some years. We are backing a first class management team, led by Steve Richards, and look forward to developing the business by growing the estate through acquisitions.
“This will be LGV’s fifth investment in the pubs and bars sector. We backed the original start up of Enterprise Inns before it floated in 1995, co-funded the acquisition of The Unique Pubco, which was sold to Enterprise Inns in 2004, backed the 2008 management buy-out of The Liberation Group, the Channel Islands’ leading pub company and brewer, and acquired Amber Taverns, the northern community pub specialist in 2010.”
