Patisserie Valerie looks to grab slice of IPO

Patisserie Holdings is set to raise up to �33m
Patisserie Holdings is set to raise up to �33m
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Patisserie Valerie, the cafe chain, is set to become the latest business to cash in on the improved spending outlook with a stock market listing that could value it at about £170 million.

Patisserie Holdings – which also owns the Baker & Spice, Druckers, Flour Power and Philpotts brands – is set to raise up to £33m with a listing on London’s junior Alternative Investment Market (Aim) by the end of May. Proceeds will be used to pay off debts.

It is the latest in a growing group of retailers to seek a stock market listing amid improving consumer sentiment.,, McColl’s, Pets at Home and Poundland have all joined the market so far this year.

Chief executive Paul May, below, who runs the business on behalf of majority shareholder Risk Capital Partners, said an initial public offering (IPO) was sensible at this juncture.

“We built this business through a recession and we’re now nicely positioned to grow it,” he said.

Patisserie Holdings operates from 138 stores, with the main Patisserie Valerie chain accounting for 89 of those sites.

The group has opened 72 Patisserie Valerie outlets during the past seven years, including four shops in Edinburgh, two in Glasgow and one in Aberdeen.

The group is chaired by Luke Johnson, the former chair of Channel 4 television who made his name backing restaurant chain Pizza Express. He co-founded Risk Capital Partners, which owns about 70 per cent of Patisserie Holdings, in 2001. During the year to 30 September, the group generated core earnings of £12m on sales of £60.1m.

During the half-year to March, earnings were £7.1m on revenues of £35.7m. Patisserie Holdings plans to pay a dividend in its next financial year ending in September 2015.

A further 12 stores are expected to open in the current financial year, and the company says it is looking at as many as 250 potential sites across the UK. It has no outlets for any of its brands in Wales or Ireland.

New stores are typically profitable from the first month of opening, with average weekly sales of £14,000.

Patisserie Valerie, which has its roots in pre-war Soho, attracts the group’s highest-spending customers who on average part with £9.62 per visit. For the group as a whole, that figure stands at £8.84.

The first Patisserie Valerie opened on Frith Street in London in 1926. For many years, it was run as a small group by the Scalzo family consisting of a partnership of three brothers – Enzo, Robert and Victor – who acquired the Soho shop in 1987 and took the group to eight sites.

Victor Scalzo remains a shareholder in the company and is employed as operations director of Baker & Spice. The current management team is expected to continue to hold a majority interest in the business after flotation.