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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Cains Beer | CBC | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
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|---|---|---|---|---|
| 0.00 | 0.00% | 3.00 | 00:00:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
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| 3.00 |
| Top Posts |
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Posted at 30/7/2008 08:35 by grlz Slightly hysterical responses aside - the fact remains that the group's bankers have continued to actively support CBC so if the plug was going to be pulled it would have occurred last year after it breached its covenants. With the tax issue negotiated - the only question mark is the company's short term funding position, but on the plus side recent trade is significantly up and sales to it's own estate attract higher margins. Risky, but once the banking is confirmed could easily double from this level, hence yesterdays tick up DYOR |
Posted at 12/4/2008 11:18 by fenseal3 RNS Number:0348SCains Beer Company PLC 09 April 2008 10 April 2008 CAINS BEER COMPANY PLC (CBC/L) ('Cains' or 'the Company') PRELIMINARY RESULTS Cains Beer Company Plc, the AIM-listed craft brewer and pub operator, announces its unaudited preliminary results for the fourteen month period ended 28 October 2007 HIGHLIGHTS * Performance during the period was in line with current market expectations with the group's contract packaging and brands divisions performing well and seeing pleasing brand wins with several of the UK's largest grocery retailers * Necessary controls and processes now in place and plans are being implemented to develop and grow the business based upon a firm set of foundations * Honeycombe has been fully integrated into the Cain's business generating:- + *Synergy benefits from the closure of the Honeycombe head office in Preston + *The provision of a central distribution centre of product to the pubs + *Rationalisation of the workforce * Cains' beer pouring across pub estate since July 2007 * Pub refurbishment programme underway following the opening of the newly-refurbished Market Tavern in Glossop - Eight further sites have been earmarked for refurbishment as the next part of the rebranding exercise with another 30 in the pipeline. Sudarghara Dusanj, Cains Beer Company Chief Executive, comments: 'We remain cautious about the outlook for 2008 and are aware that the smoking ban and reduced levels of consumer confidence is going to have a significant impact in the short term to the business. However we are confident that a non-smoking environment will, in the medium and long term, result in growth in both bar and food sales.''We continue to make progress from our initiatives to drive synergies and cost cutting through the business. The brewery division now provides a central distribution service of product to the pubs and this has removed the need to employ third-party contractors. We have started our programme across the estate to steadily transform unbranded pubs into a cohesive pub estate predominately marked with the Cains brand.''We are confident that we now have the right brand, products, pubs and people to exploit opportunities for our future profitable growth. Our beers, craft brewed to the highest quality, continue to win awards and loyal customers. Ongoing investment in the Cains brand is also at the heart of our growth strategy. Our sponsorship of Liverpool European Capital of Culture 2008 is having a positive impact and we are well on our way towards achieving our vision of becoming Britain's favourite beer company.' ENDS For further information visit: (www.cains.co.uk) or enquiries to: Cains Beer Company PLC 0151 709 8734 Sudarghara Dusanj, Chief Executive Ajmail Dusanj, Chief Operating Officer Charles Stanley Securities (Nominated 0207 149 6000 Adviser) Rick Thompson Adventis Financial PR 0207 034 4758 Tarquin Edwards 07879 458 364 Chris Steele 07979 604 687 CAINS BEER COMPANY PLC PRELIMINARY RESULTS FOR THE PERIOD ENDED 28 OCTOBER 2007 Cains Beer Company Plc, the AIM-listed craft brewer and operator of pubs, is pleased to announce its unaudited preliminary results for the fourteen month period ended 28 October 2007. CHAIRMAN'S STATEMENT Introduction I am pleased to announce our first full set of results for the business since the reverse takeover of Honeycombe Leisure plc by Robert Cain and Company limited on the 7th June 2007. The combined entity has since been renamed Cains Beer Company PLC. The results reported were achieved in a period of significant change for the business, which included the reverse takeover and key senior management changes. Results As was expected, the results show a loss for this initial first period of £2.8m before the full benefits of the acquisition take effect. The acquired Honeycombe business had a recent history of loss making and during the initial post acquisition period we have been concerned with taking greater control of the business and establishing tighter controls upon which to build a successful operation for the long term. It is inevitable that it is going to take time to turn the pub business around, but the Board are confident that the necessary controls and processes have now been put in place and that plans are being implemented to develop and grow the business based upon a firm set of foundations. The management team are well experienced in turnaround situations and will apply that experience and knowledge to the enlarged group. Cains Business Divisions; The business comprises three principle divisions: (1) Brands division - brewing, selling and marketing the 'Cains branded products'. (2) Contracts division - brewing and packaging contracts for third parties. (3) Retail division - operating managed and tenanted pubs. Financial Review Retail As a result of the reverse acquisition, which was completed during the last year, the Cains business acquired 92 pubs from Honeycombe Leisure Plc of which 25 are held as freehold properties and the remaining 67 as leasehold. Pubs in the owned estate are classed as Locals, Town Centre or Inns & Taverns. * Locals; are wet led community pubs * Town Centre; are wet led town centre locations * Inns & Taverns; are destination pubs some with accommodation and high percentage of food The total retail sales for the period annualised on a like for like basis fell by 11% with liquor down 11.5% and food down 7.6%. Contributing factors to this downturn include the introduction in July of the smoking ban, the poor summer weather and a fall in consumer confidence. This compares with 2006, which benefited from the football World Cup and excellent summer weather. Gross margins have increased by 1% on an annual like for like basis, with liquor up 1.1% and food up 2.2%. The division incurred exceptional costs of £633,000 relating to the closure costs of the former head office of Honeycombe Leisure in Preston and the relocation of this function to Liverpool, which resulted in associated redundancy costs. Cains looks forward to seeing the benefit of these rationalising and cost cutting measures in future periods. Brands and Contracts Our total sales for brewing increased by 7% overall on an annual like for like basis. The brands division increased by 1%, the contracts division increased by 7.4% with retailing falling by 1.8%. The annual gross margin has increased by 1% despite significant increases in the price of malt, hops and barley which have all been in short supply. Selling and distribution costs have increased significantly by 23.7%, on a like for like basis. This increase is primarily related to increased costs in haulage as a result of higher fuel prices and the distribution of beers across the acquired Honeycombe estate. Administration costs have increased significantly, on a like for like basis, by 60.3% for several reasons. Rent which was previously waived by the landlord, when Cains was a private business, is now being charged , the enlargement of the senior management team to better manage the enlarged group business has necessitated an increase in salary costs and the group has invested in the Cains brand through increased marketing and advertising spend. Interest payable is significantly higher than the previous year as a result of the loan interest payable on the new loan facilities entered into at the time of the reverse takeover of the Honeycombe business. Dividend The Board is not in a position to propose a dividend for the current year but it is our medium to long term aim that we will deliver dividends to our shareholders. Operational Review The financial period ended 28 October 2007 has been one of significant change both internally and externally. In terms of external factors we have seen the introduction of the smoking ban in England on the 1st July 2007. Whilst initially causing a number of operational issues, which undoubtedly affected trading, we do feel that in the medium term, the smoking ban will fit well with our model of running quality local and food-led pubs and can only lead to a better quality experience for our customers. As previously mentioned, the poor weather and the recent general deterioration in consumer confidence due to a number of adverse economic factors, are unwelcome challenges to be addressed, as are the recent budgetary increases in duty, the increases in raw material costs and the well above average increases in energy costs on the brewing side. However, despite these challenges, the Board is pleased to report that performance during the period was in line with current market expectations. Honeycombe has been fully integrated into the Cain's business and this has generated synergy benefits from the closure of the Honeycombe head office in Preston, the provision of a central distribution centre of product to the pubs and rationalisation of the workforce. We are also pleased to report that Cains' beer has been pouring across the pub estate since July 2007 and our aim is to shift the mix of sales in favour of Cains' brands in the medium term through promotions and in-house marketing. We have undertaken a full estate review, which has outlined a number of opportunities to invest in the estate and steadily transform unbranded pubs into a cohesive pub estate predominantly marked with the Cain's brand. To that end, we announced in December the opening of the newly-refurbished Market Tavern in Glossop as the first pub in the estate to undergo a complete refurbishment as part of the investment program by the group. Eight further sites have been earmarked for refurbishment as the next part of the rebranding exercise with another 30 in the pipeline. The model of integrated family brewer is a tried and tested one and one which Cains can now develop over the coming months and years. Our aim is to ensure we deliver quality in everything we do whether that be brewing our own extensive range of craft beers, brewing/packaging beer for others or retailing in our pubs and we have a vision based upon the craft brewer model seen in America in companies such as Samuel Adams, Sierra Nevada and Anchor Brewing. The group's contract packaging and brands division have performed well and are in line with management expectations seeing pleasing brand wins with several of the UK's largest grocery retailers. Cains are the Official Beer Sponsors to Liverpool European Capital of Culture 2008. As a major sponsor with pouring rights at high profile events Cains is poised to benefit from the city's year in the spotlight and the brand awareness this will generate. Cains has also commissioned a leading British Pop Artist (Sir Peter Blake) to produce a limited edition label for its Finest Lager which went on sale in February. The design has been based upon Cains' vision to become Britain's favourite beer company. People I would like to express my personal thanks to all those who make Cains the strong, successful brand it is. Our success is entirely due to the contributions made by our employees whether they work in our pubs, brewery or support departments. Everyone associated with the group makes a contribution to our success and they should all feel proud to be part of the Cains success story. Since the end of the financial year we have also taken steps to further strengthen the management team with a significant appointment. Francis Patton joined us on the 1st December 2007 as a non executive director. Francis was previously Customer services Director of Punch Taverns plc and has 22 years experience in the pub and brewing sector which can only add huge value to us at a time of consolidation in the industry and future potential growth. Outlook We remain cautious about the outlook for 2008 and are aware that the smoking ban and reduced levels of consumer confidence are going to have a significant impact in the short term to the business. However we believe that a non-smoking environment will in the medium and long term, result in growth in both bar and food sales. We continue to make progress from our initiatives to drive synergies and cost cutting through the business. The brewery division now provides a central distribution service of product to the pubs and this has removed the need and expense to employ third-party contractors. We have begun our programme across the estate to steadily transform unbranded pubs into a cohesive pub estate predominately marked with the Cains brand. We are confident that we now have the brand, pubs and people to take advantage of opportunities for future profitable growth and I look forward to the future with confidence. Roy Morris Chairman CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE PERIOD ENDED 28 OCTOBER 2 2007 Acquisitions Total 2007 2007 2006 Turnover 29,678 13,542 43,220 23,994 Cost of sales (25,479 ) (8,365 ) (33,844 ) (20,833 ) Gross profit 4,199 5,177 9,376 3,161 Selling and distribution costs (1,478 ) (163 ) (1,641 ) (1,024 ) Administration expenses before exceptional items (3,275 ) (5,509 ) (8,784 ) (1,751 ) Exceptional items - (633 ) (633 ) (1,233 ) Total administration expenses (3,275 ) (6,142 ) (9,417 ) (2,984 ) Operating (loss)/profit before (554 ) (495 ) (1,049 ) 386 exceptional items Operating loss (554 ) (1,128 ) (1,682 ) (847 ) Interest payable and similar charges (1,091 ) (154 ) Loss on ordinary activities before (2,773 ) (1,001 ) taxation Taxation on loss on ordinary - - activities Loss for the financial period (2,773 ) (1,001 ) Basic loss per share (2.91) (1.50) Fully diluted loss per share (2.40) (1.50) CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES FOR THE PERIOD ENDED 28 OCTOBER 2007 Loss for the financial period (2,773 ) (1,001 ) Unrealised surplus on revaluation of tangible fixed assets - 7,126 Total recognised gains and losses relating to the period (2,773 ) 6,125 As explained in note 1 to this announcement, the results for 2007 represent the fourteen month period ended 28 October 2007 and the comparative information for 2006 represents the year ended 31 August 2006. CONSOLIDATED BALANCE SHEET AT 28 OCTOBER 2007 2007 2006 £000 £000 FIXED ASSETS Intangible assets 732 30 Tangible assets 45,182 8,984 Investments 180 - 46,094 9,014 CURRENT ASSETS Stocks 2,167 875 Debtors 7,284 4,544 Cash at bank 2,669 103 12,120 5,522 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR (23,639) (8,902) NET CURRENT LIABILITIES (11,519) (3,380) TOTAL ASSETS LESS CURRENT LIABILITIES 34,575 5,634 CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR (26,735) (159) PROVISION FOR LIABILITIES AND CHARGES (465) - NET ASSETS 7,375 5,475 CAPITAL AND RESERVES Share capital 1,511 667 Share premium account 19,239 - Other reserves (16,067) (657) Revaluation reserve 6,919 7,126 Profit and loss account - deficit (4,227) (1,661) SHAREHOLDERS' FUNDS 7,375 5,475 CONSOLIDATED CASHFLOW STATEMENT FOR THE PERIOD ENDED 28 OCTOBER 2007 2007 2006 £000 £000 £000 £000 NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES (1,015) 1,491 RETURNS ON INVESTMENTS AND SERVICING OF FINANCE Interest paid (1,091) (154) (2,106) 1,337 CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT Payments to acquire tangible fixed (535) (659) assets Receipts from sale of fixed assets 8 3 Costs of reverse acquisition (1,603) - Net overdraft in Cains Beer Company Plc at acquisition (2,774) - (4,904) (656) NET CASH (OUTFLOW)/INFLOW BEFORE FINANCING (7,010) 681 FINANCING Net proceeds from issue of shares 2,600 - Net proceeds from issue of loan 2,500 - stock Invoice discounting 1,171 (1,067) Net repayment of bank loans (220) - Net repayment of other loans (50) - Capital element of finance lease rental payments (121) (19) NET CASH INFLOW/(OUTFLOW) FROM FINANCING 5,880 (1,086) DECREASE IN CASH (1,130) (405) NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION FOR THE PERIOD ENDED 28 OCTOBER 2007 1 ACCOUNTING POLICIES The financial information has been prepared in accordance with applicable accounting standards under the historical cost convention as modified by the revaluation of long leasehold land and buildings and plant and machinery. The principal Accounting Policies of the group are consistent with those adopted by Cains Beer Company Plc (formerly Honeycombe Leisure PLC) and Robert Cain and Company Limited in their previous financial statements with the exception of the reassessment of the useful economic lives of certain fixed assets. In the opinion of the Directors the policies remain the most appropriate for the period. The group's overdraft facility is due for review in June 2008 and the directors anticipate that the group may require an increase in the facility at that stage. The financial information has been prepared on the going concern basis. This basis of preparation relies on the successful outcome of the facility review. The directors believe that this will be the case and that the going concern basis is therefore appropriate. Basis of consolidation This report consolidates the financial information of Cains Beer Company Plc and its subsidiary undertakings which have been made up to 28 October 2007. Under the requirements of the Companies Act 1985 it would normally be necessary for the company's consolidated accounts to follow the legal form of the business combination during the period. However this would portray the combination as an acquisition of Robert Cain and Company Limited by Cains Beer Company Plc (formerly Honeycombe Leisure Plc) and would, in the opinion of the Directors, fail to give a true and fair view if the substance of the business combination. Accordingly the Directors have adopted reverse acquisition accounting as the basis of consolidation in order to give a true and fair view. In invoking the true and fair override, the Directors note that reverse acquisition accounting is allowed under International Financial Reporting Standard 3 and that Urgent Issues Task Force of the UK's Accounting Standards Board considered the subject under UK GAAP and concluded that there are instances where it is right and proper to invoke the true and fair override in such a way. The group has therefore applied the reverse acquisition accounting rules, relating to the reverse acquisition of Cains Beer Company Plc (formerly Honeycombe Leisure plc) by Robert Cain and Company Limited. Under the reverse acquisition accounting rules, Robert Cain and Company Limited is considered the parent undertaking that acquired Cains Beer Company Plc. The overall effect of this is that the consolidated financial information is prepared from a Robert Cain and Company Limited perspective rather than Cains Beer Company Plc, in summary this means: * The comparative consolidated financial information is that of Robert Cain and Company Limited rather than that of Cains Beer Company Plc. * The results for the period and consolidated cumulative profit and loss reserves are those of the Robert Cain and Company Limited plus the post acquisition results of Cains Beer Company Plc. * Goodwill which is calculated by reference to the fair value of the acquired assets of Cains Beer Company Plc has been recognised and is being amortised over 20 years. * A reverse acquisition reserve ('Other reserve') of £16,207,000 has been created: however, * the share capital and share premium account is that of Cains Beer Company Plc. The accounting period reported in these financial statements in respect of consolidated financial information therefore represents the fourteen month period ended 28 October 2007 with a comparative period of the twelve months ended 31 August 2006. 2 EXCEPTIONAL ITEMS 2007 2006 £000 £000 Related party loan waived - 1,233 Restructuring costs 633 - Restructuring costs related to the closure of the former head office of Honeycombe Leisure in Preston and the relocation of this function to Liverpool, including associated redundancy costs and the compensation for loss of office of certain directors. 3 LOSS PER SHARE The calculation of loss per ordinary share is based on the losses for the period and the weighted average number of ordinary shares deemed to be in issue during the period on a reverse acquisition accounting basis as set out below. 2007 2006 Result for Loss Result for Loss period period per share per share £000 £000 pence pence Basic loss per share: Loss attributable to ordinary (2,773) 2.91 (1,001) 1.50 shareholders Diluted loss per share: Loss attributable to ordinary (2,773) 2.91 (1,001) 1.50 shareholders Interest on loan stock 88 (0.51) - - Loss attributable to ordinary shareholders before interest on loan stock (2,685) 2.40 (1,001) 1.50 The weighted average number of shares in issue used in the basic earnings per share calculation may be reconciled to the number used in the diluted earnings per share calculation as follows: 2007 2006 Number Number Basic earnings per share denominator 95,178,593 66,713,034 Issuable on conversion of loan stock 16,864,608 - Diluted earnings per share denominator 112,043,201 66,713,034 4 NOTES TO THE CONSOLIDATED CASHFLOW STATEMENT 2007 2006 £000 £000 RECONCILIATION OF OPERATING LOSS TO NET CASH (OUTFLOW)/ INFLOW FROM OPERATING ACTIVITIES Operating loss (1,682) (847) Depreciation 1,146 325 Amortisation of goodwill 20 5 Loss on disposal of fixed assets - 1 Release of government grant (50) (40) Movement in stock (444) 160 Movement in debtors (418) 1,296 Movement in creditors 413 591 Net cash (outflow)/inflow from operating activities (1,015) 1,491 RECONCILIATION OF NET CASHFLOW TO MOVEMENT IN NET DEBT 2007 2006 £000 £000 Increase in cash 2,566 98 Increase in bank overdraft (3,696) (503) Net cash (1,130) (405) Movements in: Invoice discounting facility (1,171) 1,067 Finance leases (152) 165 Bank loans (26,197) - Other loans (521) - Loan stock (2,500) - CHANGE IN NET DEBT IN YEAR (31,671) 827 Net debt at 31 August 2006 (2,796) (3,623) Net debt at 28 October 2007 (34,467) (2,796) ANALYSIS OF NET DEBT Non-cash Reverse items acquisition 2006 Cashflow 2007 £000 £000 £000 £000 £000 Cash in hand 103 2,566 - - 2,669 Bank overdrafts (600) (3,696) - - (4,296) (497) (1,130) - - (1,627) Debt due within one year: Invoice discounting (2,209) (1,171) - - (3,380) facility Finance leases (34) 57 (15) (173) (165) Other loans - - - (120) (120) Loan stock - (2,500) - - (2,500) Debt due after more than one year: Other loans - 50 - (451) (401) Finance leases (56) 64 (15) (70) (77) Bank loans - 220 - (26,417) (26,197) (2,796) (4,410) (30) (27,231) (34,467) 5 The abridged financial information set out above does not constitute the group's statutory accounts defined under Section 240 of the Companies Act 1985. The auditors have not yet made a report under Section 235 of the Companies Act 1985 on the financial statements for the period ended 28 October 2007 from which the financial information is extracted, and consequently full accounts for the period have not yet been filed at Companies House. The report of the auditors on the accounts for Cains Beer Company Plc (formerly Honeycombe Leisure Plc) for the year ended 30 April 2006 was unqualified and there was no statement under either section 237(2) or section 237(3), however there was an emphasis of matter relating to going concern. Full accounts for Cains Beer Company Plc (formerly Honeycombe Leisure Plc) for the year ended 30 April 2006 have been filed at Companies House. This announcement was approved by the Board of Directors on 9 April 2008. The full audited accounts of Cains Beer Company Plc for the period ended 28 October 2007 and Notice of Annual General Meeting are expected to be posted to shareholders not later than 28 April 2008 and will be available for a period of one month to the public at the company's registered office, Stanhope Street, Liverpool, L8 5XJ from that date. This information is provided by RNS The company news service from the London Stock Exchange END FR UKRURWARSRUR |
Posted at 17/2/2008 15:34 by fenseal3 Cains Beer Company - Pre Close Trading UpdateRNS Number:9133M Cains Beer Company PLC 31 January 2008 For release at 0700 hrs on 31st January 2008 Cains Beer Company (CBC/L) ('Cains' or the 'Company') Pre-Close Trading update Cains Beer Company PLC, the AIM-listed craft brewer and operator of 105 pubs, which acquired the North-West based pub company, Honeycombe Leisure plc ('Honeycombe') in June 2007 by way of a reverse takeover, today releases a pre-close period trading update. This update is prior to the announcement of Cains' preliminary results on Thursday, 10th April 2008, for the 18 month period ended 31 October 2007*. . The Board are pleased to report that Cains' performance during the period was in line with current market expectations. Trading since the start of the new financial year has been difficult across the industry with competitive pressures being felt following the smoking ban, commodity price rises and the downturn in consumer spending. However, we continue to make progress and have put in place various initiatives to drive synergies and extract cost from the business. Honeycombe has been fully integrated into the Cains business, generating synergy benefits from the closure of Honeycombe's head office in Preston, the provision of a central distribution centre of product to the pubs and rationalisation of the workforce. Cains beer has been pouring across the whole pub estate since October 2007 and our aim is to shift the mix of sales in favour of Cains branded beers in the medium term by promotions and in-house marketing. We have undertaken a full estate review, which has outlined a number of opportunities to invest in the estate and steadily transform unbranded pubs into a cohesive pub estate predominately marked with the Cains brand. To that end, we announced in December the opening of the newly named Market Tavern in Glossop as the first pub in the estate to undergo a complete refurbishment as part of a £5 million investment by the Company. Eight further sites have been earmarked for refurbishment as part of the next stage of this re-branding exercise and the Company looks forward to announcing further progress in due course. The Company's contract packaging and brands divisions have performed well and are in line with management expectations, seeing pleasing brand wins with several of the UK's largest food retailers. Cains are the Official Beer sponsors to Liverpool European Capital of Culture 2008. As a major sponsor with pouring rights at high profile events, Cains is poised to benefit from the city's year in the spotlight and the brand awareness this will generate. Cains has also commissioned a leading British Pop Artist to produce a limited edition label for its Finest Lager, which will go on sale from 1st February 2008. The design has been based on Cains' vision to become Britain's favourite beer company. Sudarghara Dusanj, Chief Executive, commented: 'Cains and Honeycombe integrating as one company was always based on a deliverable turnaround strategy and it still is. Challenges exist, but the progress made so far has been encouraging and we are confident that the model we have put in place will rejuvenate the pubs and build on the success of the brewery and its brands across our own estate, the on trade and off trade. ''The current trading climate for our industry is difficult but not unforeseen and the business is well placed to build a sustainable and profitable future under a strong brand with an experienced team.' * The 18 month period ending 31 October 2007 due to be reported on, follows the move of Cains year-end from 30 April to 31 October. Accordingly, the Company initially reported a second set of interims for the 6 months ending 30 April 2007 on 24 July 2007 relating to the old Honeycombe Leisure plc business. ENDS For further information visit: (www.cains.co.uk) or enquiries to: Cains Beer Company Plc 0151 709 8734 Sudarghara Dusanj Charles Stanley Securities (Nominated 0207 149 6000 Adviser) Rick Thompson Henry Fitzgerald-O'Connor Adventis Financial PR 0207 034 4758 Tarquin Edwards 07879 458 364 Chris Steele 07979 604 687 Notes to Editors About Cains Beer Company plc - Cains Beer Company is a craft brewer of award-winning beers and lager. The company is listed on AIM and operates 105 individual pubs, mainly located in the North of England. - Cains is the official beer of Liverpool's European Capital of Culture 2008 and the brewery is closely aligned to the arts through a partnership with Britain's Tate galleries. - Cains is credited with brewing a Premium British Lager. Its Finest Lager is fully matured for a full flavour and brewed using only the best malt in the world - Maris Otter. It was voted the 2nd 'Best Thing in the World' by GQ Magazine. - The company's Stanhope Street brewery, known as 'The Terracotta Palace' and widely regarded as an iconic landmark in Liverpool, was built in 1887 although brewing started on the site when the business was founded by Irish-born entrepreneur Robert Cains in 1850. - With a modern vision to become 'Britain's Favourite Beer Company', Cains is now headed by entrepreneurial brothers Sudarghara and Ajmail Dusanj, who are chief executive and chief operations officer respectively. Their relentless focus on product quality and innovation has won the company countless awards and accolades since they purchased the brewery in 2002. This information is provided by RNS The company news service from the London Stock Exchange END TSTFKKKBOBKDODN |
Posted at 14/6/2007 08:29 by tiredoldbroker Tadtech, obviously it takes two views to make a market, and I'm happy to chew this one over. I don't believe there is a predator waiting in the wings, because (a) Honeycombe's pubs were up for sale for a long time and didn't attract a buyer (and could have been had much cheaper then than now), and (b) I don't believe the Dusanj brothers would waste money on reversing Cains into HCL if they'd had a cash buyer lined up, and (c) a hostile offer won't work as the board hold over 50%.As far as the share price goes, my reading of the numbers doesn't support this level, and I'll explain why. All the numbers are in the merger document at and are thus the company's own. In the year to 30.4.06 HCL made a loss at the operating level (before interest, exceptional charges and tax) of £121K; in the first half of this year, stripping out fixed asset items, they roughly broke even. Their cost of sales (i.e. purchases of all stock for sale, not just beer but spirits, food etc) was under £26m and will be lower this time. Their pub estate was not in good shape, after years of under-investment. In the year to 31.10.06, Cains made a profit at the operating level of £386K. I do believe that with new management, they can earn more from the old HCL estate. I'd also suggest that a percentage of HCL pub beer sales can be supplied from Cain's brewing division, which will help margins there. But the problem is, I think that the better profits will largely go on servicing the £35m mountain of debt; even at 7%, the interest bill would be £2.45m a year. As the old HCL pub estate really needs money spending on it, I don't see immediate scope to cut debt, and it may even be that as Cains total sales last year were just £24m, scaling up to supply the HCL estate may require further capital expenditure, on kegs and lorries if not new brewery equipment. So my conclusion is that the combined CBC business is probably stronger than either Cains or Honeycombe were as separate entities; but that the likely improvement in trading is simply not enough to support all the debt and a market value at 28p of over £42m. I don't think I'm simply looking back at historic trading, I really am trying to base my valuation on what CBC might manage in the future, and it isn't enough. I can see that the bank was very pleased to see HCL secure a deal which gave the bank more security, and better cover on the interest bill, but I think it may be a long haul to produce value for anyone buying at this level. The problem is that the £35m debt won't go away, and the shares are like a highly geared "stub" on whatever the residual value may be, after allowing for the debt. |
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