Making it personal - New Century Inns

Two years after launching New Century Inns, Alistair Arkley (pictured)​ is convinced there is a place in the market for the smaller pubco. Phil Mellows investigates.

The Inn on the Green brings a surprisingly modern touch to the eponymous village at the heart of Sedgefield, the Prime Minister's Co Durham constituency. Tenants Tracey and Darren Gouldburn have converted the end bar into a mediterranean-style restaurant in warm, bright colours. Very Tony Blair. Our leader has yet to pay a visit. Plenty of others have, however.

The Inn on the Green is one of the success stories of New Century Inns, the latest venture of Alistair Arkley.

The burly mustachioed Scot, who has remained one of the most easily recognisable figures in the pub industry over the last couple of decades, is starting small after losing the 500-strong Century Inns in a hostile takeover by Enterprise Inns.

That was in April 1999. New Century was launched just five months later, the approaching millennium proving fortuitous as far as choosing a name was concerned.

He is now up to 30 pubs, all tied, three-year tenancies, and aims to take it up to 100 over the next two or three years.

This is small beer compared to what Alistair has been used to, and he clearly enjoys a role that takes him closer to the pubs themselves, on this occasion taking some snaps of the Inn on the Green's planters for the New Century Inns pub-in-bloom competition.

Independent tenanted pubcos of this sort of size are a rarity and have often found it difficult to find a place in the market between the giant tenanted groups and the tied estates of the regional brewers.

But Alistair believes that, more than ever, there is a role for the smaller outfit.

"We can take a caring, family approach," he said. "Most of our licensees are experienced tenants and they have come to us because they like the personality of the company.

"That's how we have to operate. We don't command the discounts that a Punch or Enterprise can command, nor do we have the capital behind us. So we take a different position.

"The major companies have to expand rapidly by acquisition to show the growth required by their shareholders, and that means they need systems, rather than the personal touch.

"In New Century we have the experience of running a big business and we can continue to apply these techniques to a smaller operation - and we can add personality."

There is a practical aspect to this personal touch which emerged during the foot-and-mouth crisis. Many of New Century's pubs were - and still are - affected, and the company was able to give them the individual attention needed to help them out.

In some cases, tenants were put on half-rent to see them through, and Alistair's office is co-ordinating efforts to claim compensation.

"You have to take a long-term view," he said. "If these businesses aren't successful, neither are we. By helping them out over the short term it will benefit everyone in the long-term.

"Not that we've seen the last of the damage foot-and-mouth has done yet. I think the worst impact of foot-and-mouth will hit us in January and February, the lean months.

"Tenants usually save up to get them through this period - but this year they will have already spent the money."

The good news is that New Century is in a healthy state financially and hitting all its targets. By the end of this year it will have spent £10m on buying pubs and it has £5m a year to invest in future acquisitions until the estate reaches the three-figure mark.

Growth will remain within the old Century Inns' geography, that is on the east side of the Pennines from Northumbria down to North Derbyshire.

"We are widely spread for a small company," Alistair admits. "But this is the market I've traded in for the last 20 years and I know all the pitfalls."

He joined Camerons Brewery in Hartlepool, not too far from his current Teesside base at Billingham, after starting in the industry at Scottish Brewers. Camerons, along with Tolly Cobbold in Ipswich, had been taken over by Brent Walker, and Alistair was appointed Camerons managing director before becoming MD of the Brent Walker Brewing and Trading division.

It was there that he helped to create the Tap & Spile ale house brand before Brent Walker's pubs were taken over by Pubmaster and the Camerons brewery was sold to Wolverhampton & Dudley Breweries.

Alistair left to set up Century Inns, one of a new breed of independent pubcos in the early 1990s that was able to grow quickly by buying big brewery disposals forced by the Beer Orders.

He was also reunited with the all-managed Tap & Spile chain when Pubmaster decided to focus exclusively on tenancies.

Century floated on the stock exchange in 1995, but its success only attracted the attention of predators and Alistair had to begin all over again.

He was helped by that fact that he was able to draw on a small tightly-knit team of experienced people who had worked alongside him at both Century and Camerons.

They include Barry Whitehead and Brian Lowe, who were launch directors of Century, operations director Tim Pollock-Gore and property director Ian Perrett.

Alistair has never lacked energy and manages to find the time to pursue various other interests outside of growing New Century.

He is particulary active locally, being keen to give something back to the community that keeps the tills ringing in his pubs. He is a director of One NorthEast, the regional development agency, and chairs the Tees Valley Partnership which promotes Teesside.

Within the trade he is active in the British Institute of Innkeeping, the British Beer & Pub Association and the Association of Licensed Multiple Retailers and he is a non-executive director of Belhaven Brewery.

He has also thrown his support behind the Society of Independent Brewers' campaign for progressive duty.

About a fifth of New Century's pubs stock Black Sheep bitter from Paul Theakston's Masham microbrewery and Alistair would like to offer his tenants more - if the price is right.

"Progressive duty would make small brewers more competitive and make it easier for them to get their beers into pub groups like ours," he explained. "Everyone would benefit."

Finally, Alistair is keeping an eye on the wider developments within the sector. The large numbers of houses being converted from management to tenancy means, he believes, there is scope for entrepreneurs to establish a series of small operating companies based on leaseholds.

"This is the big issue in the pub industry, as I see it. Multiples of up to 20 or 30 pubs will be an appropriate way of running bigger leaseholds."

While this is not New Century's game, the company is working behind the scenes to offer the finance that can get these multiples off the ground.

New Century might look like one of the smaller pub industry players, but while the big Scot is at the helm it will certainly be punching more than its weight.

New Century Inns​