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SMALL CAP MOVERS: Various Eateries to capitalise on hospitality crisis

SMALL CAP MOVERS: Coppa Club owner Various Eateries makes AIM market debut; rivals tumble on 10pm curfew rules

It is difficult to know whether serial entrepreneur Hugh Osmond’s timing is awful or inspired.

The float of his Various Eateries chain occurred at possibly the worst moment for the restaurant sector. However, out of adversity tends come opportunity.

On Friday the owner of the high-end Coppa Club and Tavolino venues raised £25million by placing 34.2million shares at 73p each, for a market capitalisation of £65million.

Stock market debut: Coppa Club and Tavolino owner Various Eateries hopes to expand its portfolio through opportunistic acquisitions now that rivals are struggling

Six-year-old Various Eateries, whose summer trading reached 50-60 per cent of 2019 levels in London and nearly pre-pandemic figures elsewhere, will use the proceeds to expand its portfolio through opportunistic acquisitions.

‘To many, this crisis is an existential threat; but it is also a once-in-a-lifetime opportunity to build a new, major leisure business, based on how people want to live now,’ said founder Osmond.

Of course he has some form after transforming Pizza Express and building Punch Taverns into an 8,000 pub goliath worth £3.5billion. He also helped create the FTSE 100 insurance aggregator Phoenix Group, and has two private equity firms he still manages.

For his latest venture he has teamed up with Andy Bassadone, the force behind Italian restaurants Strada and French bistros chain Côte, while most recently he led the expansion of Bill’s Restaurants and The Ivy Collection.

While Osmond was spying a ‘once-in-a-lifetime opportunity’, the problems were pretty acute for the rest of the sector with the 10pm curfew now in place. Arguably it could have been worse.

Booze-led Revolution Bars tumbled 24 per cent to 10p after announcing a radical restructuring in the wake of the new restrictions, while pub chains Young’s and City Pub were down 14 per cent to 835p and 10 per cent to 58p respectively.

In the food space, Loungers was down 15 per cent to 139p, while Franco Manca owner Fulham Shore lost 10 per cent to 7p.

Posh cinema operator Everyman was only down 7 per cent to 81p. Given the bloodshed at larger rival Cineworld, this ranks as a success and is possibly reflective of the more niche, higher margin experience-based approach taken by Everyman, which isn’t reliant (totally) on blockbusters and popcorn.

Turning to the wider market, the AIM-All Share dipped 2.5 per cent to 948, just outperforming the FTSE 100 which was down 3 per cent to 5,822.

Among the fallers, diagnostics firm Genedrive shed 15 per cent to 128p after admitting it takes extra time to get US approval for its Covid-19 automated laboratory testing due to the nature of saliva samples. Broker InterTrader also trimmed its stake to 2.4 per cent from 3.3 per cent.

Elsewhere, marketing consultancy Ebiquity dropped 11 per cent to 20p after turning to an interim loss before tax of £1.9million, although it expects to return to profitability in the second half.

Among the risers, National Accident Helpline owner NAHL Group climbed 41 per cent to 56p after revealing that asset manager Frenkel Topping has proposed a takeover, though it is too early to confirm whether a transaction will go ahead.

Boohoo shares rose after announcing it will address the issues flagged by an independent review regarding its 'weak' corporate governance practices

Boohoo shares rose after announcing it will address the issues flagged by an independent review regarding its ‘weak’ corporate governance practices

Open Orphan surged 15 per cent to 17p after confirming it is indeed in advanced negotiations with the UK government for a Covid-19 vaccine challenge study as speculated by the press.

The biotech plans to expose 48 healthy volunteers to the virus at a facility in London’s Whitechapel to assess whether its nasal candidate provokes an immune response.

Meanwhile, fast fashion designer Boohoo rose 13 per cent to 359p after announcing it will address the issues flagged by an independent review regarding its ‘weak’ corporate governance practices.

Finally, finnCap’s results suggested the small-cap arena will be vibrant and healthy for the next few months with a flurry of IPOs and fundraisings.

This week payments provider Fonix Mobile and telecoms services provider Calnex announced their intention to float, while bioplastics firm Biome Technologies proposed to raise £1million via a placing to speed up growth. No IPOs in sight for next week, we’ll have to wait for October.