Globe Pub Co sees rise in number of keys being returned

Globe Pub Company has admitted seeing a rise in the number of its operators handing back the keys to their pubs.

In a trading update published today Globe, which is owned by property tycoon Robert Tchenguiz's R20 investment company and whose pubs are managed by Scottish & Newcastle Pub Enterprises, said the number of sites shut across its estate had risen to 32 in the quarter to February 28, 2009, an increase of 68 per cent.

"Market conditions have clearly impacted upon the number of closed pubs, up to 32 from 19 previously," Globe said in its update.

The number of pubs on substantive agreements had fallen from 282 to 264, Globe added, although the number of pubs on one year agreements had risen nine per cent compared with the previous quarter.

Short term agreement were still on the decline - down six on the previous quarter - "reflective of under-capitalised operators", the group said.

"Whilst a number [of closures] can be explained by gaining vacant possession to assist disposal there is clearly a growing element of operators returning keys," it added.

Total turnover for the period was £10.8m, down 4.1 per cent, with earnings before interest, tax, depreciation and amortisation down 21.7 per cent at £4.1m.

Year-on-year drinks revenue fell nine per cent, while rents fell £300,000 on the previous quarter.

Globe said it had put in place more than double the number of previously existing rent concessions - 29 - taking the total number of pubs on such assistance to 50.

"This is reflective of current market conditions and a clear indication of the increased level of support we are offering to our lessees during this time," it added.

The trading update also included confirmation that Globe had identified an independent consultant to work with the business and that it had defaulted on one of its debt service cover ratios.