Fuller’s acquires £16m Marston’s package
The package, which features three leaseholds and two freeholds, comprises the Wellington in Waterloo, the Pavilion End and Bluu in the City of London, the Hand & Flower, Kensington Olympia, and the Red Lion Hotel, Wendover, Buckinghamshire.
The deal, which is set to go through at the start of next month, takes Fuller’s estate to 365 sites, increases its reach in central London and adds 58 bedrooms to its business. Publican's Morning Advertiser understands that the company is set to make further additions to its estate before the end of the year.
Simon Emeny, Fuller’s group managing director said: “These acquisitions are high turnover managed houses with a similar trading style to our own where we feel Fuller’s can add value. They emphasise our continued focus on London and our strategy to increase the number of bedrooms in our estate which is an area of growth for the company.”
The new pubs bring the number of bedrooms in the Fuller’s estate to 612, following the acquisition of the White Swan, Stratford-upon-Avon and the refurbishment and addition of bedrooms at the Drayton Court in Ealing earlier this year.
The company said that the Wellington, Waterloo is a well-known commuters’ pub opposite Waterloo station, with 26 bedrooms situated above. Fuller’s said: “With its great transport links and superb location for tourist attractions, it is a high volume operation.”
The Pavilion End, Watling Street is situated in the heart of the City of London, close to Cannon Street station and “boasts one of the best beer gardens in the city”. Nearby Bluu is located between Bank and Moorgate, in a Grade II-listed building.
The Hand & Flower is opposite the Olympia Exhibition Halls. The company said it was “perfectly situated” to take advantage of the many events there. It has nine bedrooms and a large function room.
The Red Lion Hotel, Wendover is a listed 16th Century coaching inn with 26 bedrooms, a large restaurant area and a garden terrace.
Comment by group editor The PMA Team
The deal to sell five London areas pubs by Marston’s to Fuller’s makes sense from both points-of-view. The deal is another bulk-up for Fuller’s London estate while Marston’s can use the cash to further invest in its new-build 200-cover pub restaurants where it is achieving a 20% return.
Once invested, the company believes it can achieve £3m of additional Ebitda per annum, which is more than it is obtaining from these London sites. This sale leaves Marston’s with a dozen pubs in London and sources close to the company insist these sites are not in play — managers have been briefed that this is the case.
The existing London estates includes two Pitcher & Pianos — one in Islington and one in Richmond — where it would be more disadvantageous, in brand scale terms, to sell.
Interestingly, it appears that Fuller’s approached Marston’s to enquire about the availability of these sites to buy rather than Marston’s conducting any kind of active marketing process.
On the face of it, Marston’s has achieved a good price for a group of five pubs that includes three leaseholds (although one site, the Wellington in Waterloo, is a fairly benign British Railways lease).
Fuller’s will be confident it can achieve better performance from the venues it has acquired by applying its own branding.
The deal is also a riposte to those who were concerned that the company had missed out on three consecutive London consolidation opportunities — Geronimo, Realpubs and Capital Pub Company.
