Nightcap shares slumped on Tuesday as the hospitality company’s takeover of a live entertainment brand was clouded by a bleak trading update.
The bar operator, co-founded by former Dragons Den star Sarah Willingham, saw its share price slump 8.2 per cent to 4.5p by the late afternoon after it told investors trading had been ‘far softer’ than anticipated since the year began.
It blamed continued cost-of-living pressures, industrial action from railway workers, ‘above inflation increases’ in business rates and other costs, and the upcoming hike to the UK Living Wage.
Market plunge: Nightcap, co-founded by Sarah Willingham (pictured), saw its share price slump after saying trading had been ‘far softer’ than anticipated since the year began
While the group believes revenues for the 2024 fiscal year will align with forecasts, it also expects to achieve adjusted earnings before nasties of between £2million and £2.5million, down from £2.6million last year.
The company’s guidance came alongside the announcement that it had bought The Piano Works for £200,000.
Founded in 2015, The Piano Works runs a Victorian-listed warehouse in Farringdon and a residency at Nightcap’s Barrio Covent Garden venue in the heart of London’s West End.
Its sites offer a combination of live music, usually involving musicians performing playlists decided by the audience, together with food and drinks, including cocktails.
Nightcap intends to make the Covent Garden residency, which has operated since November, permanent and broaden the Piano Works concept to additional locations, such as cities outside the UK capital.
Alan Lorrimer, founder of the Piano Works, said: ‘The past four years have been the toughest I have known in my forty years in hospitality.’
He added: ‘We now have the potential to expand The Piano Works and prove that customers across the country will love our immersive audience-requested live music experience.’
Nightcap’s latest acquisition follows the takeover of the Dirty Martini cocktail chain and Central London brasserie Tuttons in a £4.65million pre-pack deal last year.
It warned that the costs of integrating Dirty Martini and The Piano Works this year would be higher than expected.
Willingham said: ‘I am very excited about the future prospects for Nightcap and look forward to next year as our synergies bed in and we start to benefit from the successful integration of all of our businesses.
‘Our new systems and processes will be fully functioning and optimised, and the impact of our exceptional team and their excellent work will be felt and seen widely across the business.’
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