CLB Capital Bars

RNS Number:4172Q
Capital Bars PLC
5 September 2000


                            CAPITAL BARS PLC
                                       
                Proposed Disposal of UK Bar/Restaurant Division
                                       

Introduction

The Board of Capital Bars plc ("Capital Bars" or the "Company") announces that
yesterday it entered into a conditional agreement to dispose of its UK
Bar/Restaurant Division to SFI Group plc ("SFI") for a total consideration of
#4.7million to be satisfied in cash.

Information on the UK Bar/Restaurant Division

The UK Bar/Restaurant Division comprises the four Break for the Border
bar/restaurants in London (2), Leeds and Peterborough, the Cafe en Seine in
Peterborough, the Borderline live music venue in London and an agreement to
lease a site in Cardiff.  In the 12 months ended 2 April 2000, the UK
Bar/Restaurant Division made an operating loss of #2,189,000 (including a
provision of #1,050,000 for the loss on the sale of the UK business) and had
net assets of #3,778,000 (excluding inter-company indebtedness, cash and bank
debt).

The two London Break for the Border bar/restaurants and the Borderline live
music venue comprised the Group at the time of its original flotation on the
London Stock Exchange in 1993.  The units at Leeds and Peterborough were
opened in 1998 and trading at those units failed to meet original
expectations.  The agreement to lease the site at Cardiff Bay was acquired for
nil consideration in August 1998.  Rental and service charge payments of
#75,000 have subsequently been made to the landlord.  The Group has not
expended any funds on developing the site.

Background to and reasons for the Disposal

Over the last three years Capital Bars has successfully disposed of its non-
core contract catering division, its major live music venues (the Shepherds
Bush Empire and the Brixton Academy) and the Gaiety Theatre in Dublin.

On 3 September 1999 the Company announced the acquisition of a number of
bar/restaurant and hotel interests in Dublin .  Following these acquisitions,
the Group now operates ten bar/restaurants and three hotels in Dublin.  In
addition, the Planet Hollywood acquisition announced on 17 May 2000 completed
yesterday, 4 September 2000.

The venues which the Group has acquired and opened in Dublin have proved
successful and now generate the major part of the Group's cash flow and
profitability.  The Directors believe that the buoyant Irish economy currently
provides a favourable backdrop for the opening of further bar/restaurants and
are confident of the Group's ability to complete attractive acquisitions and
developments in Dublin .  The Group is currently in advanced discussions to
exercise the options (without payment of further consideration in excess of
costs already incurred by the vendors) over two further Dublin bar/restaurants
in the course of development, which it acquired for nil consideration as part
of the O'Dwyer Acquisition in October 1999.  On exercise of these options, the
Group will assume the rights and obligations of the O'Dwyers in respect of
these two bar/restaurants and a further announcement will be made in due
course.


Following the opening of these additional two units, the Group will comprise
three hotels, with a total of 212 beds, and 13 large bars/restaurants.  This
will include the greatly extended Cafe en Seine in Dublin which is due to
reopen in spring 2001.


The UK Bar/Restaurant Division has performed less well than its Dublin
counterpart and the investments that the Group has made in Leeds and
Peterborough have not proved as successful as the investments made in Ireland.
In the light of this and the current overcrowded nature of the UK
bar/restaurant market in general, the Group announced as part of  its Interim
Results on 13 January 2000 that the Group would now focus on exploiting its
position as a leading leisure business in Dublin.  It was also stated that,
as a further decisive step in this process, the Group would market the UK
business and realise the value inherent in those assets for reinvestment in
Dublin.

In immediate trading terms, the Disposal will eliminate the Group's exposure
to the losses being incurred in the Division and also the need for the central
costs associated with the running of the UK operations.

The net proceeds from the Disposal will be used to repay the Company's
sterling denominated indebtedness.  Additional facilities have been agreed,
partly conditional upon the Disposal, to be used in opening additional
bar/restaurants and refurbishing existing units, in order to consolidate
further Capital Bars' position as a leading player in the Dublin leisure
market.

Details of the Disposal

The Company has conditionally agreed to dispose of the UK Bar/Restaurant
Division by way of the sale by one of its subsidiaries, Break for the Border
Holdings Limited, of the issued share capital legally and beneficially held by
it in Satellite Holdings to SFI together with the  sale by the Company of the
issued share capital of Inneroll Limited and the business and assets
(principally comprising the leasehold title, fixed assets and stocks) of the
businesses conducted by the Group from the units in Charing Cross Road
(London) and Leeds, and the interest of the Company in the proposed
development of the new bar/restaurant unit in Cardiff held by Bresla Forte
Break for the Border Limited, a subsidiary of the Company.

The consideration payable by SFI on completion of the Disposal, assuming a
sale of all of the units, amounts to #4.7m which is to be paid in cash.

The Disposal Agreement is conditional on the approval of shareholders and
completion of the sale of each unit is dependent on landlord's consent.

Current Trading and Prospects

The Group announced its interim results for the 12 months ended 2 April 2000
on 28 July 2000.  Since 4 April 2000, punt for punt sales in the Group's
Dublin businesses are ahead of the same period in the previous year by 108 per
cent.

The 83 room Trinity Capital Hotel opened in April 2000 followed by the
Fireworks bar/restaurant in June. Initial sales have exceeded Directors'
expectations.  The Group opened Bob's Bar in the Temple Bar area of Dublin on
1 September 2000 and the Directors are confident that this will also deliver
strong results.  We completed our acquisition of Planet Hollywood in Dublin on
4 September 2000 and intend to trade this in its current format for the short
term.

Like for like sales in the Group's UK Bar/Restaurant Division are up by 7 per
cent since 4 April 2000 compared with the same period in 1999.  Trading at the
Group's sites in Leeds and Peterborough have continued to be robust, with
sales up 48 per cent and 20 per cent respectively over the same period.
Trading at the Group's London units continue to disappoint with sales down 8
per cent since 4 April 2000.

Extraordinary General Meeting

The Disposal is conditional on the approval of shareholders and an
Extraordinary General Meeting will be convened for this purpose.

A circular will be sent to Shareholders shortly setting out the details of the
Disposal along with an explanation of the reasons for the disposal and why the
Directors believe that the Disposal is in the interests of Shareholders as a
whole.


Enquiries

Capital Bars plc                   020 7287 1331 (London)
Roger Beaumont                     00 353 1 676 1717 (Dublin)
Hugh Doherty


Charterhouse Securities Ltd        020 7248 4000
Ben Money-Coutts

Grayling
Caroline Moody                     00 353 1 283 0088 (Dublin)

Hudson Sandler
Michael Sandler                    020 7796 4133

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