Mon 14th Jul 2014 - Breaking News - Nightclub company No Saints goes through pre-pack Nightclub company No Saints goes through pre-pack: No Saints, the operator of Wonderland nightclubs and Jam House led by Luminar founder Stephen Thomas, has undergone a pre-pack administration. Administrator FRP Advisory began a sale process in late June with 26 interested parties issued with details of the business. Final offers were submitted at the start of July with No Saints existing management bidding £1,730,000 successfully for the seven trading sites under a vehicle called Exeat Leisure. The administrator had been advised that No Saints seven trading sites had a value of between £1,015,000 and £1,550,000 on an Ebitda multiple of one to two times. The remaining non-viable assets had a value of between £105,000 and £427,000. The deal completed subject to the effective rollover of the secured chargeholder indebtedness via the issue of new bonds on the same terms to Exeat Leisure for £1.41m with the balance of £320,00 to be paid in stages. One offer was received of £1.1m for Jam House Birmingham and Wolverhampton only. An improved offer of £1.75m was received after the deadline for all seven sites subject to due diligence. The offer was declined because an exclusivity period was in place with Exeat Leisure. No Saint operated nightclubs in Birmingham, Edinburgh, Cheltenham, Milton Keynes, Maidstone, Sutton and Wolverhampton – the Wolverhampton and Milton Keynes sites are former Oceana venues opened originally by Stephen Thomas’s former company. Last month saw sites in Norwich and Southampton close. On the decision to place No Saint in administration, Chris Pearce, of the administrator, said: “The group’s senior management have advised me that the cashflow problems across the group stem from a shift in the industry where traditional nightclubs have become less fashionable venues. No Saints Group previously operated clubs in Swansea, Basingstoke, Banbury, Southampton and Norwich but these sites were not sufficiently profitable to keep open. The poor trading at these sites together with the necessary closure and restructuring costs have caused cash pressure within the remainder of the business leading management to take insolvency advice. At the time of my appointment, rent arrears across the sites stood at £761,000 with the respective landlords. Losses for the period 1 October 2013 to 31 May 2014 were £657,000 before further impairments to the balance sheet. The May 2014 balance sheet shows net assets of £1.1m with current liabilities of £258,000. Hawk Holdings and Brendan Quinn hold debentures with cross guarantees across the group. Hawk are currently owed £786,000 and Brenda Quinn is owed £618,000 with current interest to be applied. Both chargeholders had confirmed that they are unwilling to invest funds given the financial position. It was evident that there are irreversible arrears owing to the respective landlords which the company is not in a position to pay. Trading at the Maidstone club had deteriorated significantly following flooding earlier in 2014 and the leases in Southampton and Norwich were considered onerous.” The administrator reported that No Saints contacted shareholders to assess the appetite for a rights issue of at least £700,000. Sufficient support was not forthcoming by the deadline of Monday 23 June. HMRC is owed circa £200,000 in VAT by No Saints. No Saints reported a £3.4m loss in the seven months to September 2012. Thomas told Propel last year that the £3.4m loss occurred after a third and fourth round of fund-raising did not materialise, and the company had to write down the value of a number of venues where investment was no longer possible and sites were surrendered back to landlords. Losses on the write-down of the value of assets and discontinued sites amounted to £3m. Trading losses of around £400,000 account for the remainder of the loss but the continuing business was profitable after central costs over the course of that full year. The company, split into Jam House and Dancing Division segments, was forecast to make around £1.5m profit on turnover of around £16m this year. Thomas told Propel at the time: “We haven’t done as well as we’d have liked but it is nothing to do with operational excellence. This is a profitable business: we had a series of site issues around lease and capital commitments to sort out after our third and fourth tranche of funding did not come through. We had to focus on our profitable sites.” Thomas also said at the time that the Jam House division made £460,000 Ebitda from its sites in Edinburgh and Birmingham, and the Dancing Division, which includes four sites where the company holds an investment and four sites it wholly owns, has made Ebitda of £609,000 in the 2012 full year.