Company targets rapid growth
Bruce Group unveils £20m bond for pubs expansion
George IV pub, one of the group’s Edinburgh outlets
Scottish independent pub company, the Bruce Group, is raising £20 million to fund acquisitions across the central belt.
The Edinburgh-based business, which owns 19 pubs in and around the capital, is issuing bonds which can be traded on the NEX Exchange Growth Market.
Among the pubs in the group are the Royal Mile Tavern, George IV Bar, Whistlebinkies and La Belle Angele. The group, which was established in 1999 by Kevan Fullerton and Scott Piatkowski, has experienced considerable growth in recent years and is seeking the investment in the business to fund expansion. The bond will be secured on the venues acquired and will attract 7.2% interest.
Mr Fullerton, director, said: “We believe that the pub market currently offers excellent potential for growth and profitability and we have the scale, expertise, and knowledge of the market to expand substantially in a relatively short timescale.
“The £20m bond will give us immediate access to substantial funds which will facilitate rapid growth. We will use this investment to quickly grow our group through multiple acquisitions within our existing market and further afield. The bond will offer investors an excellent opportunity to invest in a growing, profitable traditional market that is currently undergoing a resurgence.”
Revenue in the UK pub market was estimated to have risen 0.8% to reach £18.1bn in 2018. Whilst the pub market has experienced some contraction in recent years many recent reports, including a recent MCA Insight analysis of the UK pub sector in 2018, have highlighted a substantial upturn in pub revenues with growth particularly in wet sales and among independent pub groups.
Mr Fullerton continued: “We are confident that the pub market is ripe for expansion if the right product is offered. Our success has been in developing traditional pubs in excellent locations which appeal to a wide group of people from both the local and visitor market. This idea has worked with our existing portfolio for the last 20 years with some of our pubs recording a 40% increase in turnover during last summer.
“We think that our model, extended across Edinburgh and into Glasgow and the central belt, will produce a profitable pub group which, although centrally owned and operated, retains the individual identity and character of each pub.
“We are not creating a chain, we are building a group of individual pubs which nonetheless benefit from experienced management, strong financial backing, and the cost savings which a large group can command.”
The company is being advised by former banker Kenneth Hillen as a non-executive director.