Eclectic Bar Group plc 1. ( Eclectic, the Company or the Group ) Intention to Float on AIM

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Maximilian Bishop
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1 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA, JAPAN NOR ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION This announcement is an advertisement and not a prospectus or an admission document and does not constitute a recommendation regarding any securities. Investors should not subscribe for or purchase any shares referred to in this announcement except on the basis of information in the admission document to be published by Eclectic Bar Group plc in due course in connection with the proposed institutional placing and admission of the entire issued and to be issued ordinary shares of Eclectic Bar Group plc (the Ordinary Shares ) to trading on AIM, a market operated by London Stock Exchange plc (the Admission Document ). Copies of the Admission Document will, following publication, be available from the Company's registered office. The contents of this announcement, which has been prepared by and is the sole responsibility of Eclectic Bar Group plc, have been approved by Panmure Gordon (UK) solely for the purposes of section 21 of the Financial Services and Markets Act 2000 (as amended). For Immediate Release 27 October 2013 Eclectic Bar Group plc 1 ( Eclectic, the Company or the Group ) Intention to Float on AIM Eclectic, one of the leading operators of premium bars in the UK, today announces its intention to launch an initial public offering ( IPO ) by means of an institutional placing of Ordinary Shares consisting of the issue of new Ordinary Shares by the Company for approximately 10 million, and a sale of existing Ordinary Shares, held by the Group s principal shareholder, Avanti Capital plc ( Avanti ) (the Placing ). The Company intends to apply for the admission of its entire issued and to be issued Ordinary Shares to trading on AIM, a market operated by the London Stock Exchange ( Admission ). 1 The Company has been newly incorporated for the purposes of the proposed IPO. Shortly before Admission, it is proposed the Company will acquire Eclectic Bars Limited, the entity currently operating the business described in this announcement. As such, all references to Eclectic, Company and Group in this announcement should be construed accordingly.

2 Highlights Premium target market Eclectic is a leading operator of premium bars in the UK. Eclectic s portfolio comprises 19 venues located in major towns and cities, predominantly targeting a customer base of sophisticated students midweek and stylish over 21s and young professionals at weekends. The Company focuses on delivering added value for its customers, with premium product ranges, high-quality music and entertainment, and a commitment to high service levels and standards. Strong brands The Group trades across its estate under a variety of brands, including Embargo 59, Lola Lo, Sakura, Po Na Na and Fez Club. These brands have proven themselves to be consistently cashgenerative, continuing to trade well even since the start of the global financial crisis of Strong financial track record The Group has established a stable financial track record over the past five years with turnover in the year ended 30 June 2013 of 21.2 million, representing a 2 year CAGR of 16.9 per cent., and Group EBITDA of 3.0 million, representing a 2 year CAGR of 16.7 per cent. Significant growth potential based on successful track record The management team, led by Reuben Harley who has over 25 years experience of working in the UK pub and bar industry, is implementing a strategy to grow the business through the development of new sites either under the Company s existing brands or using brands which can be successfully maintained, as well as business acquisitions as appropriate opportunities present themselves. The bar market in the UK remains fragmented, and the Company is presented with a significant number of opportunities for acquisitions of both new sites and businesses. The management team has demonstrated its ability to achieve successful openings of new venues, on average exceeding its target returns. Panmure Gordon (UK) Limited is acting as Nominated Adviser and Broker to the Group. Reuben Harley, Chief Executive Officer of Eclectic, said: I see a great opportunity to grow this business both organically and via selective new site acquisitions. The bar market remains highly fragmented and with our total focus on attracting a premium customer to the highest quality bar in the locations in which we operate we are well positioned to take advantage of the market.

3 The potential of our brands allows for growth both from utilising different brands in areas in which we currently operate as well as new sites in our target towns and cities. The IPO will help accelerate this growth strategy. Key Strengths of the Group The key strengths of Eclectic are: It targets a premium customer base. Gross margin of c. 80 per cent. Premium product ranges, high-quality music and entertainment, and commitment to service and standards. Capacities averaging approximately 400. National geographic spread, primarily in university towns which in management s view combine an active night time economy and demographics to support premium-positioned bars. Detailed framework of operational and financial systems and disciplines throughout the business. Management team with a track record of delivering operational and financial improvements and value-enhancing acquisitions. A clear development and training programme for the people within the business. The Estate The Group currently operates 19 sites, all held by the Group on a leasehold basis with the exception of one site which is owned on a freehold basis. The estate is national, with sites in London, Bath, Bournemouth, Brighton, Bristol, Cambridge, Derby, Edinburgh, Lincoln, Manchester, Norwich, Oxford and Reading. The sites currently trade under a variety of branded themes as follows: Cuban Embargo 59 is the Group s Cuban-themed premium bar located on the King s Road in Chelsea, London. Its theme is based on the revolution of 1959, with Cuban elements in the design and product range seeking to encapsulate the feel of the playground of the Americans in the 1950s. Embargo 59 includes a VIP Gold Room with adjacent walk-in cigar humidor and roof-top terrace.

4 Polynesian Lola Lo is a Polynesian tiki-themed bar brand, based on Easter Island and the iconic 1950s pin-up girls. The bars are decorated with bamboo and woodcarvings and the theme is supported by a wide range of rum products and high quality cocktails served in authentic tiki mugs and in fresh fruit. Currently Eclectic operates Lola Lo branded sites in Brighton, Bournemouth, Cambridge, Edinburgh, Lincoln, Norwich, Oxford and Reading. Japanese Sakura is the Japanese word for cherry blossom, and the brand has a subtle Japanese theme. The positioning for the brand is to offer a West End style experience to customers in major towns and cities outside the Capital. Sakura sites are currently located in Manchester and Reading. Moroccan The Company s Po Na Na and Fez Club bars are Moroccan themed, based on the 1920s French art deco period. These sites are designed to have the atmosphere of a souk with rough plastered walls and lanterns. The current portfolio includes Po Na Na sites in London (Wimbledon), Bath and Bristol, and Fez Club sites in London (Putney) and Cambridge. Recent Acquisitions The Group s most recent acquisitions, Madame Geisha, Coalition and Coyote Wild, currently continue to trade under their existing brand names. The Madame Geisha site in Brighton was acquired in March 2013 and is also Japanese themed. It is planned for refurbishment in In October 2013, Eclectic acquired the Coalition bar in Brighton. Coalition is located in the Kings Road Arches on the seafront and has a large outdoor terrace. The bar regularly hosts live music events and headline DJ acts. Coalition will continue to trade under its existing name for at least the next 12 months, over which time the opportunities for further development will be reviewed. Also in October 2013, Eclectic acquired the freehold of the Coyote Wild bar in Derby. The Company intends to convert this site to the Lola Lo brand in early Market Position The Company competes in the premium bars market. It is the view of the Directors that the bars market can be segmented into three constituent parts being mass market, super premium and premium.

5 Within each town or city there is a premium customer segment looking for aspirational venues to visit. In management s view this customer segment includes sophisticated students midweek and stylish over 21s and young professionals at weekends. This is the target market for Eclectic. Eclectic s value added product and service offer incorporating premium branded drinks, high quality cocktails, table service, VIP areas and table booking, combined with relatively low capacity venues leads to an ability to target and maintain a premium customer clientele. Strategy for Growth The Board's current business strategy comprises: identifying development opportunities across its existing sites, whereby capital can be employed to enhance existing profitability. growth through the acquisition and, if necessary, development of new sites. The criteria Eclectic sets for new sites seeks to maintain the Group's focus on a premium customer base. It is anticipated that the majority of new sites will be in major cities and towns where there is also a student population. The Company targets a 30 per cent. EBITDA return on new acquisitions and 25 per cent. on re-developments of existing sites in the first 12 months post acquisition or redevelopment. The Company is targeting the addition to its portfolio of two to three new sites per annum. Brands New sites will be selected either for the opportunity to use one of the Company s existing brands, or where an existing brand or business can be successfully maintained and developed. Internally the management team continues to work on the evolution of existing brands and the development of potential new brands, which it believes is a key aspect of retaining customers and providing a premium offer to them. Historical Trading The following financial information has been derived from the Company s financial statements for its 2011 and 2012 financial years and from the Company s non-statutory, unaudited management accounts for its 2013 financial year.

6 Year ended 26 June June June 2013 m m m Revenue Revenue excluding PBR Gross profit Gross profit margin 80.1% 79.1% 79.6% Site EBITDA Site EBITDA margin 27.2% 25.6% 25.1% Site EBITDA excluding PBR Group EBITDA Notes: 1. In July 2012, Eclectic was awarded a contract to operate the 33 sites of PBR Leisure Limited ( PBR ) on behalf of its lending banks. This contract terminated on 20 October 2013 following the sale of The Living Room business to Stonegate Pub Company and the sale of a number of other individual sites to various purchasers. 2. Site EBITDA represents EBITDA at site level before deduction of central infrastructure and head office costs. 3. Group EBITDA represents EBITDA for the Group after deduction of central infrastructure and head office costs. Current Trading Since 30 June 2013, Eclectic has acquired one leasehold site and one freehold site, funded from existing cash resources and debt facilities. The contract to manage the assets of PBR terminated on 20 October Current trading is in line with the Directors expectations for the first three months of the new financial year. The Directors continue to implement the Group s strategy and are confident about the future prospects of the Group. The Placing and Use of Proceeds The Group plans to use the net funds from the Placing of new shares to repay a shareholder loan owed to Avanti of approximately 7.3 million with surplus net funds raised to be used to fund organic growth prospects and new site acquisition opportunities. Avanti is looking to realise a proportion of the value of its investment in the Company. Avanti will retain flexibility around the size of its stake to be sold in the Placing.

7 Dividend Policy The Directors intend, in the absence of unforeseen circumstances, to adopt a progressive policy of paying dividends while maintaining a prudent level of dividend cover for the group. This dividend policy will reflect the long-term earnings and cash flow potential of the Group and retain sufficient flexibility to finance anticipated development capital investment in line with the Company s growth strategy. The Directors propose to pay an interim dividend and a final dividend in respect of each financial year, with the first dividend payment expected to be paid following the Company s 2014 financial year. Executive Directors biographies Reuben Harley Chief Executive Officer Reuben has worked in the UK pub and bar industry for over 25 years. His career started at Grand Metropolitan plc before becoming an area manager at Greenalls Inns in the late 1990s. Between 1998 and 2004 he worked at SFI Group PLC, where he moved through the roles of Operations Manager, Regional Manager, Brand Manager of the Litten Tree brand nationally for the Bar Med brand and then Divisional Director responsible for the disposal division of 62 sites. Prior to joining Eclectic as CEO in June 2006 he was Business Development Director for The Nightclub Company. John Smith Chief Financial Officer Since qualifying as a chartered accountant (ACA) with Touche Ross & Co in 1985 John has held a variety of senior finance roles. From Head of Finance at International Currency Exchange plc he then became Group Finance Director at Vision Express until it was sold to Grand Vision in After two years as Joint UK Managing Director of Vision Express post the acquisition he then became Finance Director of First Leisure Corporation plc in 1999, before becoming CEO in 2003, and then CEO of The Nightclub Company which was created by the purchase of 22 nightclubs from the receiver of First Leisure. John became Finance Director of Eclectic Bars Limited in June Non-Executive Directors biographies James Jim Fallon Chairman Since 1994 Jim has worked almost exclusively within the leisure sector as a lender, adviser, owner, operator and most recently business consultant. Jim worked for Imperial Chemical Industries in electrical engineering for eight years prior to joining Midland Bank in He was at HSBC until 2002 when he left to set up the consumer sector corporate finance advisory business McQueen Limited. He was specifically responsible for the leisure sector within McQueen as well as much of the day to day running of the business. Jim works as a consultant to a variety of UK leisure businesses

8 through his company, Graybridge Solutions Limited. In addition he is Chairman of Newman Bars Ltd which owns and operates Lowlander Grand Café, a continental bar brasserie business in Covent Garden. Clive Watson (to be appointed on Admission) Clive qualified as a chartered accountant with Price Waterhouse in London in 1986 then joined the investment bank Manufacturers Hanover Limited where he spent three years. He joined Regent Inns plc as Finance Director and Company Secretary in Clive left Regent Inns plc in 1998 and cofounded Tup Inns Limited where he was responsible for financial and commercial matters as well as acquisitions. Clive was appointed in 2000 as Finance and Commercial Director of The Capital Pub Company PLC which was admitted to trading on AIM in In 2008 he was appointed Chief Executive and oversaw the sale to Greene King plc in 2011 for 93 million. He then set up The City Pub Company in 2012 under the Enterprise Investment Scheme which operates a portfolio of pubs in cities and large market towns in the south of England. For further information, please contact: Eclectic Bar Group plc Tel: Reuben Harley, CEO John Smith, CFO Panmure Gordon Tel: Corporate Finance Andrew Godber / Atholl Tweedie Corporate Broking Adam Pollock / Charles Leigh-Pemberton College Hill Tel: Matthew Smallwood Justine Warren The distribution of this announcement and other information in connection with Admission and the Placing may be restricted by law in certain jurisdictions and persons into whose possession this announcement or any document or other information referred to herein should fall should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

9 This announcement does not constitute or form part of, and should not be construed as, an offer for sale or subscription or solicitation of or invitation to make any offer to buy or subscribe for any securities, and neither this announcement nor any part of it shall form the basis of or be relied on in connection with or act as an inducement to enter into any contract or commitment whatsoever. No reliance may or should be placed by any person for any purposes whatsoever on the information contained in this announcement or on its completeness, accuracy or fairness. The information in this announcement is subject to change. This announcement may include statements that are, or may be deemed to be, forward looking statements. These forward-looking statements may be identified by the use of forward-looking terminology, including the terms believes, estimates, plans, projects, anticipates, expects, intends, may, will or should or, in each case, their negative or other variations or comparable terminology, including references to assumptions, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect the Company s current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company s business, results of operations, financial position, liquidity, prospects, growth and strategies. Forward-looking statements speak only as of the date they are made. Panmure Gordon (UK) has approved this announcement solely for the purposes of section 21 of the Financial Services and Markets Act 2000 (as amended) but neither accepts any liability for the accuracy of any information or opinions contained in this announcement nor for the omission of any material information from this announcement for which the Company is responsible. Neither Panmure Gordon (UK) Limited, nor any of its directors, officers, employees, advisers or agents, accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from this announcement) or of any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents, or otherwise arising in connection herewith. Both the Company and Panmure Gordon (UK) Limited expressly disclaim any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement (other than as required by the AIM Rules or by the rules of any other applicable securities regulatory authority) whether as a result of new information, future developments or otherwise. Panmure Gordon (UK) Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for the Company and no-one else in connection with this announcement, the proposed Placing and Admission. Panmure Gordon (UK) Limited will not regard any other person as its client in relation to the matters described in this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to its clients, nor for providing advice in relation to the Placing and Admission, the contents of this announcement or any transaction, arrangement or other matter referred to herein.

Q3 FY18 Business Highlights

Q3 FY18 RESULTS Q3 FY18 Business Highlights 1 2 3 4 5 6 7 Record passengers 7.1m, record revenues 423m Investing in growth 24% passenger growth in Q3 Disciplined cost management flat ex-fuel CASK Largest