BrightReasons stalls flotation

Brightreasons, the pizza and pasta group, has postponed plans for a stock market flotation this year, after a sharp reduction in its likely value.

When BrightReasons chairman Michael Guthrie announced the move in September, analysts' estimates of the group's value varied from £60m to £90m.

However, a spokesman for the company said a gap had developed between the amount City institutions were willing to pay and what the company and its backers were prepared to accept.

Mr Guthrie is not alone in coming up against this problem. New issues generally are meeting a poor reception from stock market investors at present, causing many to be postponed - as in the case of Gardner Merchant - or even cancelled.

The spokesman stressed that the flotation would still take place, although the precise timing would, as previously, depend on market conditions.

Trading at the group, meanwhile, continues to prosper, and brokers are expecting last year's operating profits of £3.5m to rise to £6m when its 1994 financial results are released.

Expansion, too, is on the menu, as witnessed by the purchase earlier this month of two restaurants in Lincolnshire from a local family business.

The Italian Affair restaurants in Lincoln and Grimsby will probably be converted to the Bella Pasta brand in the New Year, though some concepts used in the outlets will be retained.

The Lincoln restaurant is an out-of-town site, and will probably be used by BrightReasons to test whether Bella Pasta works in such a location.

BrightReasons paid about £625,000 for the two premises, and immediately completed a sale-and-leaseback deal with a property investment group.

The next big move for the group is likely to be the launch of a fourth brand to sit alongside Bella Pasta, Pizzaland and Pizza Piazza. It will be a chicken-based concept.