Celtic Inns homes in on 100-pub estate target
by The PMA Team
Tenanted pub company Celtic Inns, which runs 63 pubs, is considering an acquisition that would help it reach its target of an 100-pub estate.
Celtic, which saw Sand Aire Private Equity replace Royal Bank of Scotland Private Equity as its major private-equity backer at the end of last year, had originally set a three-year timescale to reach the 100-pub mark.
Operations director Clive Williams said: "We've got one big acquisition in the pipeline that we're considering. In our business plan we need to grow to around 100 sites over three years. But if the commercial opportunity presents itself we can go higher 200 pubs would be ideal because we could retain our present structure."
Celtic was formed in 2002 with the acquisition of the Tomos Watkin pub estate. Since then, it has bought 44 pubs from James Williams (Narbeth) and the Port Black estate. Average barrelage per pub has risen from 200 in 2002 to 260-barrels per pub. Average rent is set at about £20,000 roughly 9% of pub turnover.
Unusually, Celtic also runs two large-turnover managed pubs the Cayo in Cardiff and the White Lion in Tenterden, Kent to ensure the company understands the mechanics of running a pub.
Williams said: "I believe that in any tenanted operation to have one or two managed pubs is good practice in keeping your finger on the pulse. We can call on the practices, procedures and knowledge of running a managed pub.
"We know all the component parts of running a pub some pubcos which run tenanted pubs don't.
"The key thing in assessing a tenant's rent is assessing the overheads. I know how it works and what the issues are. It's so much better to be able to go to a tenant and say this is what the wage to percentage turnover should be."
Williams, who previously founded Maritime Taverns, which became John Labatt Retail, is also a co-founder of Tradeteam.
Celtic managing director Duncan Murray co-founded the 250-strong Alehouse Company, which later merged with Ushers to become InnSpired. Williams, Murray and chairman Mike Salter, former chief executive of SA Brain, own a majority stake in Celtic after the re-financing last November.
