For Hugh Osmond, the float of his Various Eateries PLC (LON:VARE) chain occurred at possibly the worst moment for the restaurant sector. However, out of adversity tends to come opportunity.
On Friday the owner of the high-end Coppa Club and Tavolino venues raised £25mln by placing 34.2mln shares at 73p each, for a market capitalisation of £65mln.
Six-year-old Various Eateries, which saw summer trading reach 50%-60% of 2019 levels in London and nearly pre-coronavirus (COVID-19) pandemic figures elsewhere, has said it 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 £3.5bn. He also helped create the FTSE 100-listed insurance aggregator Phoenix Group, and still manages two private equity firms.
For his latest venture, Osmond has teamed up with Andy Bassadone, the force behind Italian restaurants Strada and French bistros chain Côte who most recently 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 AIM pubs and restaurants sector with the government's 10pm curfew now in place. Arguably it could have been worse.
Booze-led Revolution Bars Group PLC (LON:RBG) tumbled 24% to 10p this week after announcing a radical restructuring in the wake of the new restrictions, while pub chains Youngs (LON:YNGA) and City Pub Group Plc (LON:CPC) were down 14% to 835p and 10% to 58p respectively. Loungers (LON:LGRS) was down 15% to 139p, while Franco Manca owner Fulham Shore (LON:FUL) lost 10% to 7p.
Elsewhere in leisure, posh cinema operator Everyman PLC (LON:EMAN) was only down 7% to 81p. Given the bloodshed at larger rival Cineworld (LON:CINE), this ranks as a success and is possibly reflective of the more niche, higher-margin experience approach taken by Everyman, which isnt reliant (totally) on blockbusters and popcorn.
Turning to the wider market, the AIM-All Share index dipped 2.5% to 948, just outperforming the FTSE 100 which was down 3% to 5,822.
Among the fallers, diagnostics firm Genedrive shed 15% 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 for genedrive to 2.4% from 3.3%.