Vantis hopes to raise 3m through this share issue and with gearing of up to 70 per cent, the amount should be enough to buy between 5 and 10 pubs. The pubs will exploit the popularity of gastro-pubs through a strong food element and will be located mainly in Berkshire, Hampshire, Kent, Surrey and Sussex.
Although other pub groups are aware of industry trends and have invested heavily in food as a result, many operate a branded chain, so menus become standardised with little variation between pubs in different areas. The directors of the EIS believe there is a growing demand for more individual gastro pubs among the over-25 age group and intend to provide this.
The premises are likely to be established freehold businesses that are not tied to a specific brewery. Once purchased, the intention is to operate them as pub restaurants within two years. Local supplies of meat, game, fish and other fresh produce will be used to foster good relations within local communties.
Shareholders should be offered an exit after three years through a stockmarket flotation or the sale of the pubs. However, if investors need to realise their investment before this, they will have access to a matched buyer trading facility operated by J P Jenkins, a stockbroker which specialises in unlisted and unquoted shares.
Although the directors of Cross Oak Inns argue that many gastro-pubs are part of a branded chain, it is not unique in establishing pubs with good food that have their own individual character. However, the matched buyer trading facility is a feature that makes this EIS stand out. Investors in an EIS often find it difficult to realise their investment before the qualifying period so a feature such as this could be useful. However, it will only offer an exit to a shareholder if someone else is willing to buy their shares.