Edinburgh-based Bruce Group Scotland, which owns 19 pubs and live music venues in the capital and in Fife including the Royal Mile Tavern, George IV Bar, Whistlebinkies, La Belle Angele and Stramash, said the bond offer – which was first announced in December – would enable it rapidly grow the business.
The group said it has identified a “substantial” pipeline of acquisition opportunities including a portfolio of 11 tenanted units as it looks to expand into areas including Glasgow.
Kevan Fullerton, who founded the business in 1999 with Scott Piatkowski, said the fundraising will enable it to take advantage of “excellent” potential for growth.
“We have the scale, expertise, and knowledge of the market to expand substantially in a relatively short timescale. The bond will give us immediate access to substantial funds, which will facilitate rapid growth,” he said.
He added that proceeds will be used to quickly grow through acquisitions within its existing market and further afield. The bonds, which will be traded on the NEX exchange, will be secured on the venues and will attract 7.2 per cent interest.
Although Fullerton said the pub market had experienced contraction in recent years, recent reports have highlighted a major upturn in revenues, with growth particularly in drink sales and among independents.
“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.
“This idea has worked with our existing portfolio for the last 20 years with some of our pubs recording a 40 per cent increase in turnover during last summer,” said Fullerton.
“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 that nonetheless benefit from experienced management, strong financial backing, and the cost savings that a large group can command.”
Board members at Bruce also include former banker Kenneth Hillen who is a non-executive director.