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Fri 24th Mar 2017 - TGI Friday’s owner Electra to pay £1bn special dividend
TGI Friday’s owner Electra to pay £1bn special dividend: The Board of Electra Private Equity, which owns TGI Friday’s in the UK, has declared a special dividend of £1.0 billion, after its best ever year in terms of returns, including significant profits from leisure investments. The dividend represents 2,612p per share, to be paid on 5 May 2017 to shareholders on the register of members at the close of business on 7 April 2017. The company stated: “Estimated pro forma Net Asset Value per share as at 28 February 2017 was 5,327p, after adjusting for realisations announced since 30 September 2016, the tender proceeds and 2016 dividend payments. The notice of termination of Electra’s outsourced management contract has reduced the number of new investments being made and, with continued realisations, has resulted in the accumulation of significant cash. Prior to this dividend, pro-forma cash, based on transactions announced but in some cases still to complete is expected to be approximately £1.4bn. As indicated in the first phase of our strategic review in October 2016, the board believes that it is best practice to return excess capital to shareholders and will continue to monitor the company’s capital needs as part of the second phase of the strategic review. As disclosed previously, the board intends to begin the second phase of the review in June and looks forward to engaging with its portfolio company management teams as soon as access is granted by Epiris, or on termination of the Epiris management contract on 31 May, and anticipates announcing the findings in the fourth quarter of fiscal 2017.” Epiris, the manager of Electra, previously announced that the private equity company recorded a total investment return of £751m, the largest return in its history, in the year to 30 September 2016. Electra Private Equity was involved in 27 transactions during the year, and its largest gains came from Parkdean Resorts (£188m), B2B information services group Axio (£130m) and Hollywood Bowl (£94m), which floated on the London Stock Exchange in September. “It has been an extraordinary year in many respects – we’ve been involved in M&A transactions with a combined value of £3.2bn, we’ve delivered record levels of total investment return and realisations (£751m and £903m respectively),” said Alex Fortescue, managing partner of Epiris. “Investment performance has been driven by the success of our approach of buying attractive businesses well and then transforming them through M&A and strategic and operational focus and change.”

Easyhotel – ‘trading above expectations, eight openings planned this year’: Easyhotel, the owner, developer, operator and franchisor of “super budget” branded hotels, has reported trading slightly above the board’s expectations for the five months to 28 February 2017 – with eight openings expected this year. It stated: “Owned hotels once again materially outperformed their competitive set (source: STR Global) during the period, whilst the overall UK hotel market improved year on year. This performance was mainly driven by strong owned hotel like-for-like revenue growth of 19% for the five months to 28 February 2017 compared with the same period last year, as the group continues to benefit from the revenue strategy announced in December 2015. Three “new look” hotels opened during the first five months of the financial year – Brussels, Amsterdam Arena and Birmingham – and all have traded exceptionally strongly and are expected to reach maturity ahead of budget. Easyhotel’s total committed development projects currently have 1,748 rooms under development, 716 of which are owned and 1,032 are being developed by franchise partners. New hotel projects under construction in Barcelona (204 rooms) and Ipswich (94 rooms) are progressing well. Manchester (115 rooms) and Liverpool (78 rooms) are now expected to open during the summer as we take advantage of the extension to the construction programme to improve on the layout and design of the two city centre hotels. Since announcing a long leasehold property in Sheffield on 20 December 2016, for conversion into a 131 room hotel, planning permission has been obtained and the completion of the purchase is expected in the coming weeks. On 22 December 2016, a further long leasehold project was added to the development pipeline in Leeds for conversion into a 94-room hotel, subject to planning permission. Both Sheffield and Leeds are expected to open in 2018. Two further franchise hotel projects have been announced during the period – a 54-room hotel in Reading (November 2016) and an 81-room hotel in Belfast, the first in Northern Ireland (January 2017). Both hotels are expected to open in early 2018. The appeal for the retrospective planning permission relating to 78 of the 162 rooms at the group’s Old Street Hotel (80 Old Street, London) was heard on 21 March 2017. A decision is expected shortly.” Chief executive Guy Parsons said: “Trading in the first five months of financial year 2016/17 was slightly ahead of the board’s expectations, with like for like revenue growth of 19%, as owned hotels continued to benefit from our revenue management strategy. The roll out of the new booking engine (Hetras) and yield management system (Duetto) are on schedule and will support our positive trading momentum. The systems will be rolled out to the whole network by the end of the current financial year. We remain on track to open eight new hotels, four owned and four franchised, in the current year. We are actively evaluating a number of interesting opportunities which potentially meet our site criteria of location and returns. The board remains confident that it shall secure properties in major and regional UK cities as well as key European gateway cities whilst leveraging the strong brand to increase Easyhotel’s presence in the growing branded super budget hotel segment.”

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