S&N quashes 6C merger speculation

Related tags Pub operators Retailing

Scottish & Newcastle has quashed talk of a Six Continents merger - for now - and says it will remain pub operators for "as long as it is in our...

Scottish & Newcastle has quashed talk of a Six Continents merger - for now - and says it will remain pub operators for "as long as it is in our shareholders interests".

The international brewer and retailer will seek to raise cash from its pub estate in the next few months.

The company ruled out an outright sale and said securitisation was not appropriate.

The most likely outcome is the sale of up to 1,000 pubs to a property partner, such as Royal Bank of Scotland.

It will continue to operate its pubs. In the event of a sale it would rent the houses back. A property partner would also probably take a share of the profits.

It is thought such a deal would involve about 1,000 pubs and would raise up to £1.5bn.

Chairman Brian Stewart said the company needed to be flexible and releasing capital from the pub estate would allow it to strike quickly as and when acquisitions became available.

Some people still believe an eventual tie-up with Six Continents is inevitable.

Yesterday, S&N unveiled full-year earnings of £442.3m, to make it the largest brewer by profit in Europe.

The pubs and pub-restaurants division saw strong growth, with underlying profits in its 1,500-strong estate rising eight per cent to £213.8m. Like-for-like sales were up 1.6 per cent.

"Our retail business is as good as anyone's," said Mr Stewart. "It has performed better than 99 per cent fo the competition."

Capital investment in S&N's retail division is focused on Chef & Brewer and Premier Lodge. The group saw an invested rise in like-for-like sales at Chef of 17 per cent, and like-for-like rise in revenue per room of 10 per cent for Premier Lodge.

S&N now has 126 Lodges, 109 Chef & Brewer's, 114 John Barras community pub and 54 T&J Bernard pubs.

Related articles:

'Transformational year' for Euro No.1 S&N (2 July 2002)

S&N to securitise 1,000 pubs for £1.5bn (1 July 2002)

S&N and 6C in pubs merger talks (13 May 2002)

Related topics Beer

Property of the week

Follow us

Pub Trade Guides

View more