Avebury boosts quality of estate with S&N pubs
Avebury Taverns has signalled that it is on the lookout for "better quality and more profitable pubs" after buying a package from Scottish & Newcastle (S&N).
It has bought 54 outlets that are part of the tenanted business, Scottish and Newcastle Pub Enterprises, for £22m.
The acquisition comes six months after Avebury's acquisition of the 67-strong Stanford Pub Company. Three weeks ago, it bought 14 pubs from Honeycombe Leisure. The latest deal takes the company's total estate over the 800 mark.
The S&N pubs are spread throughout the UK. Because they are already leased or tenanted, they will be absorbed easily into Avebury's operational structure.
Avebury managing director David Myers said: "Not only does this acquisition move us forward in terms of our ambitions for growth, but more importantly it provides a further demonstration of our commitment to upgrade the estate by adding better quality and more profitable pubs.
"We are continuing to look at a number of other acquisition opportunities, large and small, as we strive to accelerate growth.
"We have worked hard over the last three years to establish the operational structures to run an estate of 2,000 pubs or more, so this year's acquisitions are being absorbed very easily into the company.
"They will make a significant impact on our overall profitability, and we in turn expect to stimulate improvements in the performance of our newly acquired pubs.
"For some time now we have been bucking the trend in the sector by delivering like-for-like volume increases of three per cent or more across the estate. In those pubs that have signed up to our innovative Avebury Advantage incentive scheme the volume increases have been up to three times higher."
Avebury was formed in November 1997 when Mr Myers and two other former Grand Metropolitan directors, Rodney Mann and Ian Frost came together with finance director Gary Couch. Initial purchases included more than 200 pubs from Bass and more than 300 from Whitbread.
In August 1999 investment house Cabot Square Capital took a majority share holding in Avebury. Currently the founding directors hold just over 40 per cent of the shares and staff hold just over five per cent.
In February 2000, Avebury completed a major financial restructuring issuing £134m of notes through securitisation of the estate in the Eurobond market. The long-term debt replaced the original short-term acquisition facility and provided a substantial cash balance for acquisitions.
For the year ending 30 September 2000 Avebury reported profits of £5.6m and shareholders funds standing at more than £29m. The company is currently examining options for further financial restructuring to allow for accelerated growth through more substantial acquisitions.
