Patisserie Holdings plc Admission Document

108 Pages·2014·4 MB·English

Patisserie Holdings plc
Admission Document
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Key Highlights
l A leading UK branded café and casual dining group offering cakes, pastries, snacks, meals and
hot and cold drinks from 138 stores and Flour Power Bakery
l All day trading format and affordable proposition
m average café spend per head of £8.84 (excluding Philpotts)
l Favourably positioned across both the coffee shop and branded casual dining markets
m together forecast to be worth circa £6 billion and forecast to grow at over 8 per cent. per
annum1
l Vertically integrated business model
m almost all products made in-house
l Broad customer appeal, supported by portfolio of five differentiated brands
l Experienced management team with proven sector track record
l Reported EBITDA for 52 weeks ended 30 September 2013 of £12.0 million (up 25.1 per cent.
over prior year)
m pro forma EBITDA for the same period of £13.3 million, including recent Philpotts
acquisition2
l 99 per cent. of stores open for more than 12 months profitable on a store contribution basis
m average payback on new store openings less than 24 months
l Significant Group EBITDA margins of circa 20 per cent. and outstanding Group return on
capital employed of 34 per cent.
l Over 250 potential further new sites identified in the UK by independent research
l Rollout programme expected to be financed from internally generated cash flow
l Maiden dividend expected to be paid in respect of the financial year ending 30 September
2015
1 Source: PricewaterhouseCoopers LLP report dated December 2013 and Allegra Group Limited report dated October 2013.
2 Source: Unaudited proforma financial information included in Part V, prepared for illustrative purposes only.
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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the
contents of this document or as to the action you should take, you are recommended to seek your own personal financial advice
immediately from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the
Financial Services and Markets Act 2000 (as amended), who specialises in advising on the acquisition of shares and other securities.
This document, which comprises an AIM admission document drawn up in accordance with the AIM Rules for Companies, has been issued
in connection with the application for admission to trading of the entire issued and to be issued ordinary share capital of the Company to
trading on AIM. This document contains no offer of transferable securities to the public within the meaning of section 102B of the FSMA, the
Act or otherwise. Accordingly, this document does not constitute a prospectus within the meaning of section 85 of the FSMA and has not been
drawn up in accordance with the Prospectus Rules or approved by the FCA or any other competent authority.
Application has been made for the ordinary share capital of the Company, issued and to be issued pursuant to the Placing, to be
admitted to trading on AIM. It is expected that Admission will become effective and that unconditional dealings will commence in the
Ordinary Shares on19May2014. All dealings in Ordinary Shares prior to the commencement of unconditional dealings will be on a
“when issued” basis and of no effect if Admission does not take place and will be at the sole risk of the parties concerned. No
application has been, or is currently intended to be, made for the Ordinary Shares to be admitted to listing or trading on any other
stock exchange. The New Ordinary Shares to be issued pursuant to the Placing will, on Admission, rank pari passuin all respects with
the Existing Ordinary Shares, and will rank in full for all dividends and other distributions declared, made or paid on Ordinary
Shares after Admission.
AIM is a market designed primarily for emerging or smaller companies to which a higher investment risk tends to be attached than to AIM Sch
larger or more established companies. AIM securities are not admitted to the Official List of the United Kingdom Listing Authority.
2(e)
A prospective investor should be aware of the risks of investing in such companies and should make the decision to invest only after
careful consideration and, if appropriate, consultation with an independent financial adviser. Each AIM company is required pursuant
to the AIM Rules for Companies to have a nominated adviser. The nominated adviser is required to make a declaration to the London
Stock Exchange on Admission in the form set out in Schedule Two to the AIM Rules for Nominated Advisers. The London Stock
Exchange has not itself examined or approved the contents of this document.
The Directors (whose names, addresses and functions appear on page5of this document) and the Company (whose registered office appears Annex I:
on page5of this document) accept responsibility, both collectively and individually, for the information contained in this document and
1.1, 1.2
compliance with the AIM Rules for Companies. To the best of the knowledge and belief of the Directors and the Company (who have taken
all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and does not Annex III:
omit anything likely to affect the import of such information. 1.1, 1.2
Prospective investors should read this document in its entirety. An investment in the Company includes a significant degree of risk and
prospective investors should consider carefully the risk factors set out in Part II of this document.
Patisserie Holdings plc
(Incorporated under the Companies Act 2006 and registered in England and Wales with registered number08963601)
Placing of46,645,794Ordinary Shares ofone pennyeach at170pence per share
and
Admission to trading on AIM
Nominated Adviser and Broker
Canaccord Genuity
Share capital immediately Issued and fully paid
following Admission Amount Number
Ordinary shares ofone pennyeach £1,000,000 100,000,000
Canaccord Genuity, which is authorised and regulated in the United Kingdom by the FCA, is acting as nominated adviser and broker to the
Company in connection with the proposed Placing and Admission and will not be acting for any other person (including a recipient of this
document) or otherwise be responsible to any person for providing the protections afforded to clients of Canaccord Genuity or for advising
any other person in respect of the proposed Placing and Admission or any transaction, matter or arrangement referred to in this document.
Canaccord Genuity’s responsibilities as the Company’s nominated adviser and broker under the AIM Rules for Nominated Advisers are owed
solely to London Stock Exchange and are not owed to the Company or to any Director or to any other person in respect of his decision to
acquire shares in the Company in reliance on any part of this document.
Apart from the responsibilities and liabilities, if any, which may be imposed on Canaccord Genuity by the FSMA or the regulatory regime Annex III: 10.1
established thereunder, Canaccord Genuity does not accept any responsibility whatsoever for the contents of this document, including its
accuracy, completeness or verification or for any other statement made or purported to be made by it, or on its behalf, in connection with the
Company, the Ordinary Shares or the Placing and Admission. Canaccord Genuity accordingly disclaims all and any liability whether arising
in tort, contract or otherwise (save as referred to above) in respect of this document or any such statement.
A copy of this document is available, subject to certain restrictions relating to persons resident in any Restricted Jurisdiction, at the Company’s
website www.investors.patisserieholdings.co.uk. Neither the content of the Company’s website nor any website accessible by hyperlinks to
the Company’s website is incorporated in, or forms part of, this document.
IMPORTANT NOTICE
Cautionary note regarding forward-looking statements
This document includes statements that are, or may be deemed to be, “forward-looking statements”. These
forward-looking statements can be identified by the use of forward-looking terminology, including the terms
“believes”, “estimates”, “plans”, “projects”, “anticipates”, “expects”, “intends”, “may”, “will”, or “should”
or, in each case, their negative or other variations or comparable terminology. These forward-looking
statements include matters that are not historical facts. They appear in a number of places throughout this
document and include statements regarding the Directors’ current intentions, beliefs or expectations
concerning, among other things, the Group’s results of operations, financial condition, liquidity, prospects,
growth, strategies and the Group’s markets.
By their nature, forward-looking statements involve risk and uncertainty because they relate to future events
and circumstances. Actual results and developments could differ materially from those expressed or implied
by the forward-looking statements. Factors that might cause such a difference, include, but are not limited
to the risk factors set out in Part II of this document.
Forward-looking statements may and often do differ materially from actual results. Any forward-looking
statements in this document are based on certain factors and assumptions, including the Directors’ current
view with respect to future events and are subject to risks relating to future events and other risks,
uncertainties and assumptions relating to the Group’s operations, results of operations, growth strategy and
liquidity. Whilethe Directors consider these assumptions to be reasonable based upon information currently
available, they may prove to be incorrect. Prospective investors should therefore specifically consider the risk
factors contained in Part II of this document that could cause actual results to differ before making an
investment decision. Save as required by law or by the AIM Rules for Companies, the Company undertakes
no obligation to publicly release the results of any revisions to any forward-looking statements in this
document that may occur due to any change in the Directors’ expectations or to reflect events or
circumstances after the date of this document.
Notice to overseas persons
The distribution of this document in certain jurisdictions may be restricted by law and therefore persons into
whose possession this document comes should inform themselves about and observe any such restrictions.
Any failure to comply with these restrictions may constitute a violation of the securities laws of any such
jurisdiction.
The Ordinary Shares have not been, nor will they be, registered under the United States Securities Act of
1933, as amended, (the “US Securities Act”) and may not be offered, sold or delivered in, into or from the
United States except pursuant to an exemption from, or in a transaction not subject to, the registration
requirements of the US Securities Act. Subject to certain exemptions, this document does not constitute an
offer of Ordinary Shares to any person with a registered address, or who is resident in, the United States.
There will be no public offer in the United States. Outside of the United States, the Placing Shares are being
offered in reliance on Regulation S under the US Securities Act. The Ordinary Shares will not qualify for
distribution under the relevant securities laws of Australia, Canada, the Republic of Ireland, the Republic of
South Africa or Japan, nor has any prospectus in relation to the Ordinary Shares been lodged with, or
registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance.
Accordingly, subject to certain exemptions, the Ordinary Shares may not be offered, sold, taken up, delivered
or transferred in, into or from the United States, Australia, Canada, the Republic of Ireland, the Republic of
South Africa, Japan or any other jurisdiction where to do so would constitute a breach of local securities laws
or regulations (each a “Restricted Jurisdiction”) or to or for the account or benefit of any national, resident
or citizen of a Restricted Jurisdiction. This document does not constitute an offer to issue or sell, or the
solicitation of an offer to subscribe for or purchase, any Ordinary Shares to any person in a Restricted
Jurisdiction and is not for distribution in, into or from a Restricted Jurisdiction.
The Ordinary Shares have not been approved or disapproved by the US Securities and Exchange
Commission, or any other securities commission or regulatory authority of the United States, nor have any
2
of the foregoing authorities passed upon or endorsed the merits of the offering of the Placing Shares nor have
they approved this document or confirmed the accuracy or adequacy of the information contained in this
document. Any representation to the contrary is a criminal offence in the US.
Basis on which financial information is presented
Unless otherwise indicated, financial information in this document, including the historical financial
informationonthe Group for the years ended 30 September 2011, 2012 and 2013 and the unaudited interim
financial information onthe Group for the six months ended 31March 2014has been prepared in accordance
with IFRS.
Various figures and percentages in tables in this document, including financial information, have been
rounded and accordingly may not total. As a result of this rounding, the totals of data presented in this
document may vary slightly from the actual arithmetical totals of such data.
In the document, references to “pounds sterling”, “£”, “pence” and “p” are to the lawful currency of the
United Kingdom.
Market, economic and industry data
This document contains information regarding the Group’s business and the industry in which it operates and
competes, which the Company has obtained from various third party sources. Where information contained
in this document originates from a third party source, it is identified where it appears in this document
together with the name of its source. Such third party information has been accurately reproduced and, so
far as the Company is aware and is able to ascertain from information published by the relevant third party,
no facts have been omitted which would render the reproduced information inaccurate or misleading. The
Company has obtained the third party data in this document from industry studies, forecasts, reports, surveys
and other publications published or conducted by:
• The Javelin Group Limited, Bickenhall Mansions, Bickenhall Street, London, W1U 6BP;
• PricewaterhouseCoopers LLP, 1 Embankment Place, London, WC2N 6RH; and
• Allegra Group Limited (formerly Allegra Strategies Limited), Walkden House, 10 Melton Street,
London, NW1 2EB.
References to defined terms
Certain terms used in this document are defined and certain technical and other terms used in this document
are explainedinthe sectionsof this document under the headings“Definitions”and “Glossary”.
All times referred to in this document are, unless otherwise stated, references to London time.
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CONTENTS
Page
DIRECTORS, SECRETARY AND ADVISERS 5
DEFINITIONS 6
GLOSSARY 9
PLACING STATISTICS 10
EXPECTED TIMETABLE OF PRINCIPAL EVENTS 10
PART I INFORMATION ON THE GROUP 11
PART II RISK FACTORS 24
PART III A. HISTORICAL FINANCIAL INFORMATION ON THE GROUP 31
B. ACCOUNTANTS’ REPORT ON THE HISTORICAL FINANCIAL
INFORMATION ON THE GROUP 58
PART IV UNAUDITED INTERIM FINANCIAL INFORMATION ON THE GROUP 60
PARTV UNAUDITED PRO FORMAFINANCIAL INFORMATION 66
PART VI ADDITIONAL INFORMATION 68
PARTVII TERMS AND CONDITIONS OF THE PLACING 98
4
DIRECTORS, SECRETARY AND ADVISERS
Directors Luke Oliver Johnson (Executive Chairman)
Paul Edward May (Chief Executive Officer)
Christopher (Chris) David Marsh (Finance Director)
Lee Dale Ginsberg (Non-executive Deputy Chairman, Senior
Independent Director)
James Michael Alexander Horler (Non-executive Director)
All of whose business address is at the Company’s registered
and head office
Registered and Head Office 146-158 Sarehole Road
Birmingham
B28 8DT
Company website www.investors.patisserieholdings.co.uk
Company Secretary Christopher David Marsh
Nominated Adviser and Broker Canaccord Genuity Limited
88 Wood Street
London
EC2V 7QR
Legal advisers to the Company Osborne Clarke
One London Wall
London
EC2Y 5EB
Legal advisers to Canaccord Travers Smith LLP
Genuity 10 Snow Hill
London
EC1A 2AL
Reporting Accountants Grant Thornton UK LLP
Colmore Plaza
20 Colmore Circus
Birmingham
West Midlands
B4 6AT
Tax advisers to the Company PricewaterhouseCoopers LLP
7 More London Riverside
London
SE1 2RT
Registrars Capita Registrars Limited
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
5
DEFINITIONS
The following definitions apply throughout this document, unless the context otherwise requires:
“Act” the Companies Act 2006 (as amended)
“Admission” the admission of the Ordinary Shares, issued and to be issued
pursuant to the Placing, to trading on AIM becoming effective in
accordance with Rule 6 of the AIM Rules for Companies
“AIM” AIM, a market operated by the London Stock Exchange
“AIM Rules for Companies” the AIM rules for companies published by the London Stock
Exchange from time to time
“AIM Rules for Nominated Advisers” the AIM rules for nominated advisers published by the London
Stock Exchange from time to time
“Articles” the articles of association of the Company
“Board” or “Directors” the directors of the Company, whose names are set out on page5of
this document
“Canaccord Genuity” Canaccord Genuity Limited, the Company’s nominated adviser and
broker
“Company”or “Patisserie Holdings” Patisserie Holdings plc, a company incorporated under the laws of
England and Wales with company number 08963601
“Concert Party” for the purposes of the City Code, Luke Johnson, Ben Redmond,
RCPand Paul May
“Corporate Reorganisation” the corporate reorganisation described in paragraph 2 of Part VI of
this document
“City Code” the City Code on Takeovers and Mergers
“CREST” the relevant system (as defined in the CREST Regulations) for
paperless settlement of share transfers and holding shares in
uncertificated form which is administered by Euroclear
“CREST Regulations” the Uncertificated Securities Regulations 2001 (S.I. 2001 No.3755)
(as amended)
“Disclosure and Transparency Rules” the Disclosure and Transparency Rules made by the FCA pursuant
to section73A of the FSMA
“EU” the European Union
“Euroclear” Euroclear UK & Ireland Limited, a company incorporated under the
laws of England and Wales
“Enlarged Share Capital” the issued Ordinary Shares upon Admission, comprising the
Existing Ordinary Shares and the New Ordinary Shares
“ESOS” the Company Schedule 4 Share Option Scheme, further details of
which are set out in paragraph 9 of Part VI of this document
“Executive Directors” each of Luke Johnson, Paul May and Chris Marsh
“Existing Ordinary Shares” the 80,733,361 Ordinary Shares in issue immediately prior to
Admission
6
“FCA” the Financial Conduct Authority
“FSMA” the Financial Services and Markets Act 2000 (as amended)
“Group” prior to the Corporate Reorganisation, PAL and its subsidiary
undertakings and, with effect from the Corporate Reorganisation,
the Company and its subsidiary undertakings and “Group
Company” should be interpreted accordingly
“HMRC” Her Majesty’s Revenue and Customs
“IFRS” International Financial Reporting Standards
“Javelin” The Javelin Group Ltd, a company incorporated under 03421813,
an ecommerce and omni-channel retail consultancy
“LIBOR” London Interbank Offered Rate
“London Stock Exchange” London Stock Exchange plc
“Long-Term Incentive Plan” or the Company Long-Term Incentive Plan to be adopted by the
“LTIP” Company, further details of which are set out in paragraph 9 of
PartVIof this document
“New Ordinary Shares” the 19,266,639 new Ordinary Shares to be issued by the Company
pursuant to the Placing
“Non-executive Directors” each of Lee GinsbergandJames Horler
“Official List” the Official List of theFCA
“Ordinary Shares” ordinary shares ofone pennyeach in the capital of the Company Annex I:
21.1.1 (c)
“Patisserie Valerie” the patisserie and bakery business operated by the Group under the
Patisserie Valerie brand
“Philpotts” Philpotts (Holdings) Limited, a company incorporated under the
laws of England and Wales with company number 05838607
“Philpotts Group” Philpotts and its subsidiary, Philpotts Limited
“Philpotts Limited” Philpotts Limited, a company incorporated under the laws of
England and Wales with company number 02001192
“PAL” Patisserie Acquisition Limited, a company incorporated under the
laws of England and Wales with company number 06070007
(formerly named Patisserie Holdings Limited)
“Placing” the conditional placing of the Placing Shares by Canaccord Genuity
as agent for and on behalf of the Company and the Selling
Shareholders pursuant to the terms of the Placing Agreement
“Placing Agreement” the conditional agreement dated 14 May 2014 and made between
the (1) Company (2) Canaccord Genuity (3) the Directors and (4)
the Selling Shareholders, relating to the Placing, further details of
which are set out in paragraph11(a)of Part VIof this document
“Placing Price” 170pence per Placing Share
“Placing Shares” the New Ordinary Shares to be issued by the Company and the Sale
Shares to be sold by the Selling Shareholders, in each case at the
Placing Price, pursuant to the Placing
7
“Prospectus Rules” the prospectus rules made by the FCA pursuant to section 73A of
the FSMA
“PVHL” Patisserie Valerie Holdings Limited, a company incorporated under
the laws of England and Wales with company number 05914839
“RCP” Risk Capital Partners LLP, a limited liability partnership
incorporated under the laws of England and Wales with registered
number OC322005
“Registrar” Capita Registrars Limited
“Relationship Agreement” the relationship agreement between the Company and Luke
Johnson, further details of which are set out in paragraph 11(d) of
PartVIof this document
“Restricted Jurisdiction” the United States, Canada, Australia, the Republic of South Africa,
the Republic of Ireland, Japan or any other country outside of the
United Kingdom where the distribution of this document may lead
to a breach of any applicable legal or regulatory requirements
“Sale Shares” the27,379,155Existing Ordinary Shares being sold on behalf of the
Selling Shareholders pursuant to the Placing
“Selling Shareholders” those persons whose names and addresses are set out in paragraph
18of Part VI of this document
“Shareholder” a holder of Ordinary Shares
“Share Option Schemes” together,the ESOS and the LTIP
“UK” the United Kingdom of Great Britain and Northern Ireland
“UK Corporate Governance Code” the UK corporate governance code published by the Financial
Reporting Council from time to time
“UKLA” or “United Kingdom the FCA, acting for the purposes of Part VI of the FSMA
Listing Authority”
“uncertificated” or “in recorded on the register of Ordinary Shares as being held in
uncertificated form” uncertificated form in CREST, entitlement to which, by virtue of the
CREST Regulations, may be transferred by means of CREST
“US”, “USA” or “United States” the United States of America, each state thereof, its territories and
possessions and the District of Columbia and all other areas subject
to its jurisdiction
“VAT” UK value added tax
8