Nightcap plans to exit AIM and re-register as private company

Nightcap has said there could be more benfits to of being a private business

London Cocktail Club owner Nightcap has proposed to cease trading on AIM and re-register as a private company.

The late-night bar chain operator, which runs 46 bars and 11 brands across the UK, said it would take this action as its valuation “does not reflect” its potential.

In an update published today, Nightcap chair Gareth Edwards said the board “unanimously” concluded that the decision to re-register as a private company is the “most effective way” to reach its long-term potential.

It comes ahead of its Annual General Meeting on 17 July, where shareholders must approve the proposal. If approved, it would take effect at 7 am on 29 July.

“We have not taken this decision lightly; however, following an extensive review and deliberation, we have determined the most effective way to maximise shareholder value in the long term and increase the potential for the long-term success of the company,” Edwards said.

Edwards said the board is convinced Nightcap’s current valuation “does not reflect” its potential or achievements so far, which “is unlikely to change in the short-to-medium term.”

He added: “Since our last institutional fundraise in May 2021, we have demonstrated several times that we can access funding from non-institutional sources at a premium to our share price at the time.

“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.”

The hospitality sector has been hit hard over the past few years as it continues to battle the lingering effects of the cost-of-living crisis, inflation and wages.

However, the late-night bar chain said revenues are “in line” with market expectations despite a challenging trading year.