Adrian Fawcett, Punch's chief operating officer, suddenly found himself in charge of 7,500 instead of 4,500 pubs last week following a deal with Pubmaster. Mark Stretton reports.
It is the evening after the night before. Punch has just unveiled the "quantum leap" that will see its estate swell from 4,500 to 7,500 pubs overnight. Despite a hectic time and several sleepless nights, Adrian Fawcett is looking relatively wide-eyed.
"The Pubmaster deal went through from start to finish in about seven weeks," says Punch's new chief operating officer who is sat in the House, a Punch pub that was recently named Time Out's gastropub of the year.
"This week we completed the £265m refinancing on Monday and then worked two nights solidly to get the Pubmaster deal done by today."
The frantic week also saw Punch unveil full-year results, with pre-tax profits up to £113m, and hold its inaugural Shine Awards evening for licensees. "Basically I haven't been to bed before 3am all week," says Adrian.
The deal has made Punch Britain's biggest pub landlord although Enterprise will wrestle back the top spot when it buys Unique next March. During the Pubmaster negotiations, Punch dispatched property specialist Christie & Co to survey 20 per cent of the estate and was surprised by what it found. "Everybody thinks Pubmaster pubs are smaller with less capability," says Adrian. "But the trading space isn't much smaller than we've got."
The numbers do differ - the average Pubmaster pub generates about £39,000 of profit compared with Punch's batting average of £52,000. "This looks like quite a difference," says Adrian, 35, "but many [Pubmaster pubs] are wet-led boozing pubs, which means they really only appeal to immediately local people.
"If we can drive footfall, get people coming from further afield, we will see real benefit." Much of the 3,200-strong estate is undeveloped - Pubmaster specialised in spending small amounts on the pubs, and often. Adrian says there are real opportunities through investment. Also, only 18 per cent of the Pubmaster estate is on long-term leases. Punch has identified between 600 and 800 short-term tenancies that could be converted.
As the deal will see Punch own more than 25 per cent of pubs in some areas of the UK (assessed on a ward-by-ward basis), the company will sell on at least 206 houses - 92 from Punch, 114 from Pubmaster. "We didn't choose to keep the best ones, we kept the ones with the most development potential because that is an unrealised asset," says Adrian.
Given the company's recent flotation and the need to improve relations with its licensees, a summer head office reshuffle saw Francis Patton's role change from commercial director to customer services director.
The company began the search for a chief operating officer, responsible for the operations and control of all of its pubs. Adrian, who was appointed in July and joined the business in August, will take charge of integrating Pubmaster into Punch. "It should not be a terribly complicated process," he says. "The two organisations are very similar with broadly the same market proposition.
"It is absolutely critical that neither Punch nor Pubmaster lose momentum during the process. There is huge potential to build on the underlying strength of the Pubmaster business."Adrian says it will not just be a case of Punch extolling its virtues to Pubmaster, but sharing best company practice from the two businesses.
During the summer, Punch also reshaped its back office, launching its Frontline one-stop call centre for licensees. Admin responsibilities were taken away from business development managers, who were then re-titled BRMs (business relationship managers) and each given about 65 pubs to look after.
There was a suspicion that Punch had re-packaged what was essentially a cost-cutting exercise in a media-friendly way. "It was not about cost savings at all," says Adrian. "We are now sending someone to the pub who is capable of making decisions and resolving issues as well as carrying out business planning and financial evaluations.
Before this, people who weren't touching the business or our customers were making decisions and that is wrong."
Punch has had its fair share of negative press, primarily over its relationships with licensees. "We are starting to get it right with retailers," says Adrian. "Clearly there is a long way to go but for every negative story there are people like the licensees at our Shine Awards last Tuesday."
He is responsible for all commercial transactions and the service offer to all Punch outlets. There is something of the control freak in Adrian. During the interview he frequently says "don't put that in" or bats a question away with "your readers aren't interested in that", and at one point he picks up the notepad and scribbles something out. He seems the perfect man to manage controls and processes.
Part of Adrian's job is ultimately to help licensees drive their businesses. "When people walk into a pub, over 60 per cent don't know what they are going to order when they get to the bar," he says. "That is a huge opportunity."
He also wants to drive home the retail message. "A poor experience in a pub will mean people keep their visit very short and won't come back," he says. "Conversely, a great experience will mean a higher spend and repeat business. Good quality, good standards and good staff mean superior returns for licensees."
Punch boss Giles Thorley and finance director Robert McDonald deployed an interesting tactic in their search for a new operations chief - they left the final decision to their wives. "We all went for dinner with Adrian and his wife," says Robert. "It was suggested by one of our non-execs. Women are much better judges than men and it's also much easier to get a feel for someone when they are with their partner."
The operations man is highly positive about the future prospects of the business, especially the step-change that Pubmaster will bring. But is a 7,500-strong pub company good for the industry?
"Yes, it's very good," says Adrian. "It is capable of recruiting and training high-quality retailers. Large companies are capable of investing in a large number of buildings and keeping them going, which for a smaller company would not be viable. We can offer probably a wider selection of brands than anyone else and because of our regional density we have the ability to service our customers properly."
Born in Skipton, North Yorkshire, Adrian read economics at Cardiff, where he met his wife Amanda. The couple have three children - Will, aged four, and twins Abby and Tom, three.
Before oiling the wheels of industry, he was a budding carpenter and won a design award in 1986 for the production of themed children's furniture. The winning item was a bedside table in the shape of a petrol pump. "It was everyday objects like cars, trucks, buses, lampposts and so on," he says.
After his MBA at Cardiff he joined Ford, working at its Bridgend plant in Wales. He then joined Mars before he was headhunted by Bass. The brewer brought him on board to integrate Carlsberg-Tetley before the competition authorities threw the deal out. He stayed with the business and became group managing director.
He became an employee of Interbrew when the Belgian brewer bought Bass before this deal too was scuppered by competition rules. He became corporate vice-president at Interbrew responsible for integrations, which included Beck's and the Bass US business that was bought back from the Guinness Import Company.
Then the call came from Punch.
Adrian is also a former member of the British canoe team. "I've paddled up most of the main rivers on the planet," he says. "Most of the principles you learn in sport like discipline, aiming for a target and the winning, are the same for business."