The Old English Pub Company doesn't run pubs, says chief executive Barry Warwick. We discover why.
Barry Warwick wants to set the record straight about the Old English Pub Company (OEPC). It doesn't run pubs. That is why, after six years, he is about to change its name.
"We run inns which, according to the dictionary, are hostelries for food and drink where the weary traveller can lay their head," he explained.
"We've bought some beautiful coaching inns but, because of our name, too many people thought we were going to turn them into boozers.
"The word 'pub' in our corporate name doesn't reflect what we are, which can work against us."
Warwick, who is chief executive of OEPC, realised the potential of traditional inns and pub-restaurants during his 21 years with Grand Metropolitan. By the time he left in 1990 he was tied trade director responsible for 750 pubs.
He joined up with Paul Simpson, a fellow ex-Grand Metropolitan operations chief, and formed OEPC in December 1992, funded by venture capital group Schroder Ventures and bank loans from Barclays.
It started by acquiring 10 freehouses in the northern Home Counties and East Anglia and has been steadily growing ever since.
This year it spent £55.2m on buying 52 outlets, including seven coaching inns from Forte Heritage Hotels, 10 from Regal Hotel Group and five from Bedford brewer Charles Wells.
The estate now stands at 172, split into the 60 pub-restaurants of Country Style Inns and the 112 Old English Inns and Hotels - with a total of 2,178 letting rooms.
The UK accommodation sector is set to continue growing, with the likes of Whitbread, Vaux and Greenalls investing increasing amounts of cash into hotels and budget accommodation.
According to the Office of National Statistics, the market is due to grow from its current level of about £9bn a year to more than £12bn over the next five years.
With an estate stretching from the South to East Anglia, the Midlands and Cheshire, OEPC intends to continue expanding by acquisition at a rate of about 50 a year.
"There is no shortage of good quality properties around," Warwick said.
OEPC waved goodbye to its venture capitalists three years ago after becoming one of the first companies to float on the Stock Exchange's Alternative Investment Market.
This prepared it for a full listing last year, which allowed it to raise £30.5m through a rights issue in July despite the summer slump which hit the financial markets.
Future funding is likely to come from freeing up cash within the estate. With 90 per cent of the sites freehold, it is investigating a leaseback arrangement for up to £75m of property, which would be sold and taken back on leases of up to 50 years.
To manage this expansion it is set to move to bigger headquarters in Potters Bar, Hertfordshire, in February. It has also developed training throughout its estate, boosted by its recent accreditation by the British Institute of Innkeeping as a National Licensee's Certificate trainer.
Warwick naturally believes his inns have an edge on modern chains such as Travelodges and Travel Inns.
OEPC charges an average of £45 a head for a room, including breakfast and VAT, which is similar to the rates at a budget hotel where food isn't included.
"Our customers don't have to go out hunting for somewhere to eat or drink," Warwick said. "They can stay in and get food made from fresh produce in a relaxed atmosphere, sitting by a log fire with a drink and a newspaper.
"Modern hotels all look the same and have no character but our properties are hundreds of years old."
OEPC inns date back as far as 1086, which will be a key element of a new marketing drive to be launched in the United States.
It is also one of the leading operators to exploit the "grey" market of over-35s, which is set to continue growing over the next few years.
A new membership scheme - the Old English Country Club - is building up the customer base. After paying an annual fee of £20, members get a 25 per cent discount on accommodation for up to two rooms at any time of the year.
Food now accounts for 44 per cent of sales at OEPC's outlets and accommodation another 20 per cent.
Only a third comes from wet sales, which includes cask ales as well as growing volumes of wines and soft drinks.
This month the company revealed this unique mix had helped it to perform well during the difficult six months to the end of September, boosting turnover by 71 per cent to £29m and pre-tax profits by 90 per cent to £4.3m.
Warwick admitted his inns were hit along with the rest of the pub sector by the wet weather in the early summer, especially the pub-restaurants, but over the past two months sales have surged back up.
"If it hadn't been for the poor summer, we would have done even better.
"But the bad weather does mean that our customers are more likely to stay inside our inns to eat and drink, which is where we win.
"If you look at the downturn in the sector, most of the pub companies have suffered because their income still depends a lot on drink. If you have a bad summer followed by the hard winter that's been forecast, there isn't much else they can turn to.
"I don't want to sound too over-confident but we are the envy of the industry."
One sign of success is that this year OEPC has faced three takeover approaches, including one from a major brewery group.
Warwick rejected them because he did not believe they were good enough prices.
But he added: "If somebody came round the corner and made a serious offer, we would look at it. The company is not for sale but everything has a price."