Captaining the Enterprise

Ted Tuppen finds time to talk about all things business.

More than 50 documents were spread across a boardroom desk the size of a snooker table awaiting Ted Tuppen's signature.

The administrative frenzy at the London headquarters of law firm CMS Cameron McKenna represented the finishing touches on an £865m deal that will see the Enterprise Inns estate swell to 5,300 pubs.

The Laurel transaction, finally completed last week, is stage one in a two-year programme that should see Enterprise emerge as a 9,500-strong beast of a tenanted pub business.

Stage two is a call option Enterprise has on a further 4,189 pubs, secured in a £2bn consortium with private equity groups Cinven, Legal & General Ventures and Morgan Stanley.

Little wonder Ted Tuppen, the captain of the Starship Enterprise, has been labelled "man of the moment".

But he isn't caught up in the moment. Enterprise is a long-term owner of pubs, and while Cinven and others, who were "very helpful" in securing the Nomura pubs, did the deal to make fast profits, Enterprise is here for the duration.

"We care passionately about pubs and Enterprise Inns will still be here long after I have retired," he said. "The reason we bought these two estates [Laurel and Nomura] is because they were the root to building the best tenanted estate in Britain.

"Customers will increasingly want to go to the best pubs. You want to attract the best licensees. You do that by offering them the best chance to make money."

Ted and his colleagues opened discussions with Laurel executives back in November, when thePublican.com reported the company was for sale.

The Nomura-owned Unique and Voyager estates came along during ongoing talks, an opportunity too good to miss. If, as expected, the company takes the call option on Nomura or "Newco", the Office of Fair Trading (OFT) could get twitchy.

It is thought Enterprise may have to sell about 100 pubs. "It is our job to make sure there aren't any competition issues when the time comes," said Ted. "But I don't believe we are part of a 60,000-strong industry.

"We have some terrific gastropubs that are no different to many restaurants. Really we compete in a market of 130,000 licensed premises.

"Besides, you shouldn't look at pubs as a number. Walkabout averages weekly sales in excess of £40,000 - 10 times more than many of our pubs. We may have 10 per cent of pubs but we certainly don't have 10 per cent of sales."

Ironically it was the OFT that lead Ted to the industry. He first got involved in pubs as a result of Lord Young making them available through the 1989 Beer Orders.

Before establishing Enterprise he part-owned an engineering company. "I spent most of my time on planes which meant I didn't see my family very much," he said. "I deliberately chose pubs because they were UK-based. And because they were asset-based.

"What tends to happen in engineering is you design something, then you make it and a couple of years later you might get some money for it.

"That doesn't happen with pubs. Pubs are cash-generative and the bigger you get the more cash they generate."

Rather than talk about himself - be it his past or what he had for breakfast - the Enterprise boss prefers to stick to business and the industry. "People who talk about themselves tend to get shot down," he said.

The chief executive is committed to working with the government for a satisfactory solution to licensing reform.

"Reform is on the way," he said. "Bang your head against a brick wall as much as you like but reform is going to be with local authorities so we need to concentrate on how we can work with them."

He is keen to ensure the industry gets what it needs. "We have a great pub with a great licensee opposite the Drury Theatre," he said. "The actors and cast members go in before evening performances. Afterwards, at 10.45pm, we have hundreds of theatre-goers spilling in with 10 minutes to have a drink.

"It just doesn't make sense.

"Given the meetings I have had I know there is a huge political will to solve the big issues," he said. "They [the government] need our help, not a misinformed or prejudiced rollicking."

While he is keen to work with the department of Culture, Media and Sport, the Enterprise supremo was less impressed with the Prime Minister, who recently spoke at the annual CBI dinner. "The depth of understanding and quality of delivery demonstrated the potential risks of a government more interested in public perception than commercial reality," he said. "For all the content, he may as well have been speaking to small school children," he added.

Ted recently found Enterprise caught up in another ongoing political issue, one confined to the pub industry. The Punch flotation saga, which saw the company abandon its scheduled London listing only to launch seven days later, re-awoke the long-running debate over pub companies profiting at the expense of embattled licensees.

Negative national publicity questioned the beer-tie model on which tenanted businesses are built. Licensees were quoted saying they pay too much in rent and too much for beer. "If you ask any lessee 'would you like to pay less rent?' then practically all of them will say yes," said Ted. "It's like asking if you would like to pay less tax."

The head of Enterprise also says what seems to happen is people negotiate a low rent under a tied-agreement and then subsequently argue that they are paying too much for beer.

"The two things go hand in hand," he said.

Enterprise is currently exploring the possibility of giving its lessees the choice of the traditional beer-tie or paying full rent prices and receiving beer under heavy discount. "Discounted rent and discounted beer does not work," he said.

While chatting about all things business, Ted lets it slip that he does indeed have a life away from Enterprise and the Square Mile. "I am certainly not a workaholic," he said. "A good chief executive will follow the maxim that less is probably more.

"This business is essentially a simple one and the key philosophy is to look at what you do and to try and make it simple."

When not focusing on building Britain's biggest pub business Ted races 165mph cars, enjoys a spot of sailing and the odd game of golf. "I haven't played much lately though," he said. "I've been doing other things."

There are probably a number of frazzled lawyers at Cameron McKenna who can vouch for that.

Related articles:​

Ted Tuppen sells £513k of shares (8 May 2002)

Laurel Pub Partnerships sold to Enterprise (12 April 2002) Trade reacts to Enterprise Inns' acquisition of Nomura pubs (21 March 2002)

Enterprise takes control of £2bn Nomura pubs (20 March 2002)

Enterprise poised to clinch Nomura pubs (19 March 2002)