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Tue 17th Apr 2018 - Update: Diversey and Zenith merge, Christie Group, Majestic Wines
Diversey and Zenith merge: Diversey and Zenith Hygiene Group have announced the completion of the transaction by Bain Capital Private Equity which will combine the two companies, creating the UK and Ireland’s largest manufacturer and supplier of cleaning and hygiene products. Completion of the deal follows on from customary anti-trust clearance by the Competitions and Markets Authority on 19 March 2018. The combined group will create a £170m market leader with approximately 1,000 employees nationally, poised for growth across the UK and Ireland. The chief executive and founder of Zenith Hygiene Group, Ringo Francis, will lead the combined group in the UK and Ireland reporting to Gaetano Redaelli, president of Europe for Diversey. Ringo Francis, in conjunction with the Diversey leadership team led by Ilham Kadri and Bain Capital will conduct a detailed review of the combined group. The review will focus on strengthening market position, delivering a comprehensive product and service offering for customers and identifying new opportunities outside of the UK market which can benefit from the combined group’s expertise. Based in Hertfordshire, Zenith Hygiene manufactures and distributes a wide, high-quality range of cleaning and hygiene products serving customers in the healthcare, food service, hospitality, leisure and facilities management, pharmaceutical and food and beverage processing industries. The company employs around 500 people across sixteen locations nationally, generating net sales of £67m in the fiscal year ending February 2017. Diversey is a global supplier of hygiene and cleaning solutions that integrates chemicals, floor care machines, tools and equipment with a wide range of technology-based value-added services, food safety services and water and energy management. Globally, Diversey employs approximately 9,000 people and generated net sales of approximately $2.6 billion in 2016. Ringo Francis, chief executive of Zenith Hygiene Group, said: “This marks the start of an exciting new chapter, for the new group in the UK and Ireland. The combination of these two powerful brands will provide significant benefits for our customers and employees and opportunities for further expansion and growth in new sectors. I look forward to harnessing the strengths of both businesses to support our aspirations as supplier and employer of choice in the UK and Ireland.”

Christie Group report revenue and operating profit boost: Property agency Christie Group has reported sales grew 11.1% to £76.1m for the 12 months ended 31 December 2017. Operating profit was £3.8m (2016: £1.1m before exceptional items). David Rugg, chairman and chief executive of Christie Group, said: “2017 saw an encouraging rebound in performance following a disrupted 2016. Looking ahead, 2018 has started well. We have a good volume of Client M&A transactions in progress. As a result, we anticipate our first half performance will be significantly ahead of last year’s first half performance. Our Professional Business Services division drove revenue to a total of £40.6m (2016: £35.0m) an increase of 15.9% over the previous year. The primary drivers were an increase in regional transactional derived income emanating from additional hires engaged in the proceeding three years, as well as strong revenue from corporate M&A activity in certain key and emerging markets. Our financial services income also continues to grow. Increases in the Living Wage have hit those labour-intensive sectors we operate in. For example, Care Homes employ large numbers of staff at the minimum wage. In restaurants and retail shops this has been compounded by an increase in property rates. As a result, our agency business Christie & Co has seen some increase in distress based transactions. Through the advent of C.V.A.s some distress will transfer to landlords through increased voids and the prospect of re-letting at reduced rents. Inevitably, distress leads to increased business advisory and disposal work.”

Majestic Wines to accelerate growth through increased customer acquisition: Majestic Wine has reported it intends to accelerate growth, by materially increasing investment in new customer acquisition. Sales are on track to hit £500m sales target in 2019. 2018 financial year adjusted Ebit is expected to be in line with market expectations. The group is currently investing around £12m a year in new customer acquisition at a lifetime payback in excess of 4x, generating £48m per year of future value. The company stated: “We will invest an additional £9m to £12m, of which £7m to £10m is directed at growth and £2m will ensure we drive growth safely. This will reduce adjusted Ebit in FY19 by £2m to £3m (vs FY18), but increase annual generation of future value from £48m to £80m+ a year.” Chief executive Rowan Gormley, said: “We are in the fortunate position of having the option to accelerate growth by investing in new customer acquisition. We are starting from a good place with the core business on track to meet our 2019 sales target of £500m and the market’s expectation for profits and dividend in FY18. In the last three years, we have doubled sales at Naked Wines and delivered profitability in all three markets – after increasing investment in new customer acquisition. We believe we can double the level of investment again while maintaining the returns, driving sustained growth in shareholder value. On a risk / return basis, the case for accelerating investment is clear. We can measure success in months while delivering returns over years. This is the right thing to do to maximise shareholder value.”

Samlesbury Hotel goes into administration: The Best Western Plus Samlesbury Hotel, one of Lancashire’s best known hotels has gone into administration. Owned by Squire Hotels, the venue, located on Preston New Road, continues to trade and is still open for business while a buyer is sought. Matthew Ingram and Steven Muncaster of Duff & Phelps in Manchester were appointed joint administrators of the 86-bedroom hotel on the outskirts of Preston last week. In a statement they said they were trading the hotel as a going concern and it remains open for business, with current bookings being honoured. Joint administrator Matt Ingram said: “Consumer confidence is the driving force of the sector, and as such, its health is dependent on economic certainty. With Brexit on the horizon and inflation on the rise uncertainty is building; meaning consumers are increasingly tightening their belts. This coupled with the introduction of the National Living Wage in 2016, which hugely impacted the leisure industry as a whole, has meant that those in the sector are facing a bumpy road ahead.” The hotel, which won an award as the best in Lancashire, is popular for conferences and meetings. It boasts eight meeting rooms; one suite, four multi-functional boardrooms and a further three meeting rooms and can accommodate between four and 220 delegates. The hotel’s Merchants Bar and Grill restaurant can also accommodate up to 82 guests. It joined the Best Western Plus Brand at the beginning of 2017 after a business decision to raise the hotel’s profile on a local level. Squire Hotels was created in 2011 and has other hotels in the north west of England. It bought the Windermere Hydro in Bowness in 2014.

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