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Thu 15th Jun 2017 - Update: NewRiver, CAMRA, Majestic Wne
NewRiver to raise £200m: NewRiver REIT, the convenience-led UK retail and leisure property specialist which owns 344 pubs, is to raise at least £133 million through the issue of new shares by way of a firm placing and additional gross proceeds of not less than £67 million by way of a placing and open offer, all at an Offer Price in the range of 330 pence to 340 pence per Ordinary Share. The raise is being conducted by way of an accelerated bookbuild on the company’s behalf by Liberum Capital Limited and Peel Hunt as Joint Bookrunners. Proceeds of the Capital Raising are intended to be used as follows: to fund the consideration of approximately £60 million for the acquisition of the 50% share the company does not already own in its BRAVO Joint Ventures for which the company has entered into Heads of Terms; to finance the £30 million of identified (but not yet contractually committed) capital expenditure and risk-controlled development, including the construction of further convenience stores for the Co-operative and the development of the group’s Canvey Island retail park; and to pursue the group’s acquisition pipeline, all of which is off-market or selectively marketed. David Lockhart, chief executive, said: “NewRiver has a proven track record of delivering growing and sustainable cash returns to shareholders through its focused strategy of acquiring and managing convenience-led and community-focused retail and leisure assets combined with risk-controlled development and value enhancing active asset management. The proceeds of the proposed Capital Raising will be deployed into accretive acquisitions, including the purchase of the remaining units in the BRAVO JV, and our exciting programme of risk-controlled developments. NewRiver is very familiar with the BRAVO assets having been responsible for their day to day management since the joint venture was established in 2013. Given the investment made into the BRAVO assets to date, we are confident that this acquisition will produce attractive long term returns for our shareholders.”

CAMRA calls for business rates review: Ahead of the Queen’s Speech expected to take place next week, the Campaign for Real Ale (CAMRA) is calling on the government to deliver on its Manifesto commitment to review the business rates system and relieve the burden on the pub sector. CAMRA is very concerned that pubs are facing a punitive tax burden, which sees the average pub pay £140,000 a year in direct taxes, or 34p in every £1 taken in the till. The Campaign is therefore calling on the government to make the Pubs Relief Scheme permanent and to extend it to £5,000 per pub per year. These calls come in light of 130 MPs – making up a significant 20% of the House of Commons – pledging before last week’s general election to celebrate and promote Britain’s breweries, support action to help pubs thrive and represent the interests of pub-goers, beer and cider drinkers. Support for CAMRA’s #pledgeforpubs campaign has crossed party lines, with 69 Labour and 46 Conservative MPs pledging their support before the election, along with a statement of support from the former Liberal Democrat leader Tim Farron. CAMRA is also calling on the government to keep the brewing and pubs sector front and centre in the Brexit negotiations and to freeze beer duty for the duration of the next Parliament. Colin Valentine, CAMRA’s National Chairman, said: “Pubs are a force for good in local communities. Not only do they support the economy and provide employment, but they also bring communities together, help raise money for charities and are a major attraction for visitors from around the world. Despite this, pubs continue to face a huge tax bill which has recently been made even worse through increases to beer duty and business rates. Ultimately, it is the consumer who will pay the price as publicans are forced to put up prices, which could lead to a number of pub closures in a time of austerity and uncertainty. This is why we are calling on the government to adhere to its Manifesto commitment to review the business rates system. With one in five MPs promising to back the brewing and pubs trade, we hope those elected will come together to become a powerful voice for pub-goers and beer drinkers in this Parliament.”

Majestic Wine reports board changes: Majestic Wine has reported that Phil Wrigley has informed the board that he will retire as chairman and step down from the board at the AGM in August 2017. Greg Hodder, who was appointed non-executive director on 1 October 2015, will be appointed as chairman-designate with immediate effect, formally taking over as chairman at the conclusion of the AGM. Ian Harding, who was appointed non-executive director on 1 June 2013, will be appointed senior independent director with immediate effect. Ian will remain chair of the Audit Committee. An external search process is now underway to appoint an additional non-executive director to add further experience to the board. Rowan Gormley, chief executive, said: “Phil has made a tremendous contribution to the future of Majestic, through his wisdom, decades of retailing experience and wicked sense of humour. He will be sorely missed. We wish him a very happy and well deserved retirement. Greg’s extensive retailing and ecommerce experience, along with his first-hand knowledge of the wine market and the USA, our biggest growth market, make him the ideal person to take over from Phil at this stage of the transformation plan. Ian Harding has retail and corporate governance experience from his time auditing and working in FTSE 100 companies and the gravitas to fulfil the role of senior non-executive director. He has been heavily involved in developing and communicating the transformation plan from the start. We are 18 months into our transformation and are moving out of the “test and learn phase” of the plan and into the “roll out” phase. This means we need to recognise directors with the skills that can support this next stage. We’ve got a strong mix of skills on our board which will support the group as we move from a turnaround to a growth company.” The company also reported its full year results for the 53 weeks ended 3 April 2017 with Half Two profit up 51% on prior year. Sales were up 15.8% on a reported 53 week basis, 11.4% on an underlying 52 week basis, driven by 12% growth in the group customer base to 852,000 active customers. Multichannel orders now account for 56% of group sales. Full year reported adjusted PBT down to £12.9m, reflecting previously announced transformation costs. H2 adjusted Ebit up 51.0%, an encouraging performance in the first period where transformation costs are fully annualised and benefits are starting to come through. Full year reported Profit before Tax was a loss of £1.5m, largely reflecting acquisition related non-cash charges. 

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