Globe defaults on covenants for second quarter
Globe Pub Company bond holders have been told that the company has had to grant rent concessions to another 11 hosts as it stays in default on key covenants in its latest quarter.
The company, which has an estate of 421 pubs, is now unable to dispose of any pubs due to restrictions following financial covenant default. In its latest quarter to 31 May this year turnover was down £1.1m on the same quarter the year before to £11.3m while EBitda was down £1.5m on the comparitive quarter to £5.1m.
The company stated: "For the previous two quarters the Debt Service Cover Ratio of EBITDA to debt servicecosts (as defined in the Issuer Borrower Facility Agreement) was 1.06:1. This remains below the covenant level of 1.25:1. "For the previous two quarters the Free Cash Flow Ratio of adjusted EBTIDA (defined in the Issuer Borrower Facility Agreement as EBITDA less any adjustment required for the minimum maintenance capital expenditure spend required compared to actual spend) to the debt service costs was 1.02:1.
"The rental income for the quarter ended 31st May 2009 was £3.0m which represents 57.9% of EBITDA. The current rent roll has decreased to £11.9m this quarter, a decrease of £400,000 on last quarter. We granted an additional 11 rent concessions." When Globe was securitised in May 2006 it had 352 pubs let on substantive three year or more agreements - that figure has now dropped to 254. It had no closed pubs in May 2006 - it now has 29.
