Nando’s quashes IPO and London listing rumours

SOUTH AFRICA – Sizzling rumours around spicy chicken eatery Nando’s mulling a listing on the London Stock Exchange have been quelled.

On Tuesday Nando’s dismissed reports from the UK that the company had initiated steps to make an initial public offer (IPO) and also refuted suggestions it was considering a capital raising.

According to a report from Bloomberg on Monday, quoting anonymous sources, Nando’s was speaking to advisers and was in the initial phases of planning a share sale.

The report suggested the company – which was worth just less than R140m when it delisted from the JSE in 2003 — was weighing a London listing “among other potential venues”.

Since leaving the JSE, Nando’s has grown into a global niche eatery brand with revenues of £809m ($872.62m0 from 946 stores as at the end of February 2016.

The year to end February income statement, though, shows operating profit up only slightly at £70m ($75.51m) with net profit down by more than half to £21.3m ($22.98m).

The main source of profit erosion was a markedly higher net interest paid bill of £49m ($52.85m) — which could be the reason behind speculation about an IPO.

But the financial statements showed net cash flows from operation activities was a reassuring £90.5m ($97.62).

Since delisting, Nando’s is no longer keenly watched by the local investment community. But several market watchers canvassed on Tuesday said if an IPO was ever on the cards then hopefully consideration would be given to securing a secondary listing on the JSE as well.

While Nando’s is domiciled in the UK and has built a sizeable operating presence across the country, the company still holds a significant presence in SA.

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The JSE has also traditionally given strong support to large fast-food and convenience restaurant groups with Famous Brands and Spur Corporation considered staples for institutional investment entities.

If Nando’s did opt for a secondary listing on the JSE, the move might erase some bitter memories among certain investors.

Nando’s listed on the JSE at 100c per share in the late ’90s listings boom, but fell afoul of the market when the company bought out minority shareholders at just 70c per share and delisted.

Despite having strong local roots, Nando’s has its biggest operating presence in the UK, with other international footholds secured in the US, Australia, India, Malaysia and Qatar.

February 1, 2017; https://www.businesslive.co.za/bd/companies/retail-and-consumer/2017-02-01-nandos-quashes-ipo-and-london-listing-rumours/

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