Admiral and Punch rule out managed route
Both companies have insisted there are no plans to follow the route of Enterprise Inns, which is increasingly targeting underperforming pubs to bring under its own management.
Andy Slee, central operations director at Punch, told the PMA that the company has “no plans to operate anything other than our leased and tenanted model” for its c4,300 pubs.
Admiral group property and strategy director Andy Clifford also confirmed that the c900-strong pubco will not be introducing managed houses. Last month, Star Pubs & Bars owner Heineken UK agreed to sell 111 pubs to Admiral Taverns.
Clifford said: "[Our pubs] are community local establishments and they run well under the tenanted model where we can provide advice and influence licensees, although we allow them to run their business.
“The types of properties which would be converted to managed house operations within estates going down that route are being quoted as needing to have £1m turnover for those sites and a more formulated approach. That formulated approach does not work within community locals. They need to be able to flex their style as things change with those communities and react very quickly to what is going on. That’s what our licensees do exceptionally as well."
Managed growth
The statements come a fortnight after Enterprise Inns revealed it will have 10 directly managed sites by mid-November, to join the company’s original managed offer, the St James of Bermondsey in south London.
Paul Harbottle, Enterprise’s group commercial director, told the PMA, the company was only targeting London and Manchester and that a “very small proportion” of the 5,500 leased and tenanted estate would be considered for conversion.
Harveys plans to convert up to half of its estate to managed, while Batemans, Brakspear, Charles Wells, Robinsons and Tadcaster are all at various stages of building up managed pub businesses.
'Significant investment'
Leading analyst Simon French, of Cenkos Securities, explained why Punch and Admiral may be steering clear of the managed route.
“A significant investment is required to establish the appropriate infrastructure for a managed pub business of meaningful size. There is also the requirement for the pubs to be able to operate successfully under the managed model and there may not be a critical mass of pubs in their estates achieving the levels of turnover to warrant introducing a managed pub division,” he said.
“The leased and tenanted model continues to evolve as pubcos seek to exert a greater or lesser degree of control, which may ultimately blur the distinction between managed and leased pubs.”
