Everards expands profit pie

Marston's Pub Company boss Alistair Darby says finding new ways of growing tenants' bottom lines is an imperative.

"More than ever we're got to earn our corn working hard for customers,' he says.

In this context, it's full marks to plucky Leicestershire-based Everards for coming up with Project William, a scheme that effectively creates a bigger profit pie for both itself and microbrewer tenants.

A criticism you hear of the pubco/tenant relationship is that tenants are often left to swim or sink. The line of attack is that tenanted pubcos let pubs, but unlike, say a Domino's franchisee, tenants receive little in the way of differentiated retail content.

Tenants' success depends on them inventing their own points of difference and having the business skill to out-perform. Everards, under the guidance of far-sighted managing director Stephen Gould, has come up with a scheme that amounts to a cask-ale franchise, creating a point of difference based on microbrewers' links with their locality and passion for their product.

Its success so far is underpinned by a number of key facts. Everards has a microbrewer tenant in mind before it buys a pub; market conditions are such that closed and dilapidated pubs can be bought and refurbished relatively cheaply; microbrewer tenants can leverage their Progressive Beer Duty gains to earn very good margin on their own cask-ale products; Everards is small enough to spend quite large amounts of senior management time in creating the right conditions of trust between itself and its microbrewer tenants. Microbrewer tenants, as it turns out, seem to be outstanding tenants because they really care about their cask-ale products being housed in a first-class retail environment.

Last Wednesday, I toured three Titanic Brewery pubs in Stoke, opened with Everards under the Project William scheme. Titanic's pubs look, as they should, like Titanic freeholds, with their own signage. They look distinct and enticing from the outside.

As it happens, the food I ate at Titanic's White Star, where there's a sensibly and reassuringly small menu of on-the-premises cooked items, was really outstanding.

partnership​

The only clue that Everards is involved is one of its own cask products on draught at each of the pubs. Titanic boss Keith Bott talks of the proper spirit of partnership that exists between his company and Everards, with total transparency on what each company is making profit-wise. The partnership has a real feel of sustainability about it. Although Everards is making an enviable 15% return on investment (ROI), rents come in at a sensible 10% or so of turnover — a much more realistic figure than the 20%-plus of turnover that you often come across. For the giant tenanted pubcos the whole thing will seem like small beer.

So far, there are seven pubs opened under the scheme, with another four would-be microbrewer tenants lined up to take on Everards pubs. But Everards' scheme is providing the company with quality expansion. And it shows the sort of imagination and mindset that the industry needs to provide much more of.

Marston's goes above and beyond​

Tenanted pubcos get more brickbats than bouquets. Good, therefore, to hear from one Marston's tenant, Michael Ashton, who has delivered a metaphorical bunch of roses to his pubco chiefs. He took over the Bull Hotel in Ludlow, Shropshire, 10 months ago and says: "When we took over the pub we had some big ideas about what we wanted to do and when we would do them — many we didn't expect to achieve for several years.

"Our time frame was five years but within only a matter of two months we began to realise that those dreams were much closer.

"Regular customers now travel up to 100 miles for a night out and our sales have far outstripped all of our financial results."

As Marston's Beer Company boss Stephen Oliver says: "Flak is a commodity in copious supply; praise is a much rarer commodity.

"It would be nice to think that other satisfied customers would be equally willing to put unprompted pen to paper, but maybe old-fashioned courtesies have died a death these days."

Please email Cnhy.Punevgl@jvyyvnz-errq.pb.hx​ if you'd like to tell how your pubco has gone above and beyond.

Punch Bowl safe in Madge divorce​

National media reports suggest the Punch Bowl in Mayfair is owned by Guy Ritchie and Madonna and may be worth around £2.5m.

It might well be worth that and a little bit more, but its freehold value sits on the Royal Bank of Scotland (RBS) balance sheet. Ritchie owns a share of the lease and it is managed, like hundreds of other RBS pubs, by Scottish & Newcastle Pub Enterprises. Chances are Ritchie paid a few tens of thousands of pounds to buy his share of the lease.

It is unlikely to play a major part in any divvying up of Ritchie and Madonna's assets in the divorce settlement.