Globe Pub Co beer volumes down 8%

Globe Pub Company, the 437-strong tenanted business owned by Robert Tchenguiz, has indicated beer sales are down by 8% in its most recent quarter to 1 March this year.

The results, which cover December, January and February, are the first clear indication of how tenanted pubs are coping with the smoking ban over the winter months.

Globe admitted it had 35 pubs that were paying nil rent and a further ten pubs where rent concessions are in place.

The company rent roll went down £300,000 to £14.6m for the quarter which reflected the the impact of 17 tenancy changes at the start of 2008.

The number of tenancies-at-will stands at 68, which is in line with the quarter before but a fair bit higher than the figure of 49 at the time the Globe estate was securitised in September 2006.

It had 12 pubs closed in February, a slight reduction from 14 in the quarter before but still much higher than at the time of securitisation when it had two venues closed.

Globe revealed that last month it launched a new marketing package aimed at creating bespoke local promotions across the estate.

A report to bond holders stated: "We are further building our capability in this area and trialing a number of consumer trade building mechanics."​

Globe, which is run by Scottish & Newcastle Pub Enterprises, sold five pubs in the quarter for £5.1m and has another 11 on the market.

The company plans to buy another package of ten pubs from the cash produced - a deal expected to be complete by its year-end of May.

A total of six pubs were closed in the most recent quarter for capital development.

Opinion with The PMA Team​

Globe was subject to a securitisation in 2006 which means it has to produce a quarterly report for bond holders.

This means that its performance is the most transparent in the sector - and it's a decidedly mixed bag.

There's a strong core of around 337 pubs that are either on three, five, six or 21-year agreements - 225 of them are on 21-year agreements.

But even here, there's been slippage of 25 pubs on longer agreements since the time of the securitisation offering in May 2006.

Overall, the beer volume decline year-on-year stands at 8% in the most recent quarter, down from the minus 6% year-to-date figure.

Around 7% of the estate is paying no rent while a further ten pubs have rent concessions.

It's a worrying performance among Globe's bottom quartile pubs. The company is taking action on two fronts.

A total of around 17 pubs are to be churned and replaced with, presumably, better quality pubs.

It has launched a website to drive the recruitment process, with a 7% growth in applications since the website went live in September last year. It's also boosting marketing support for tenants.

Globe is very largely made up of managed pubs converted to lease, whose performance ought to have been more resilient that most after the smoking ban.