Globe Pub Company finding it tough to re-open shuttered pubs

Globe Pub Company (GPC), the Robert Tchenguiz-owned pub operator, said the inability to access funding to spend on its pubs meant re-opening closed sites or preventing those in difficulty from failing altogether was "becoming increasingly difficult".

In its latest quarterly report GPC said a further 14 of its 421 pubs had been granted rent concessions as trading continued to come under intense economic pressure. Meanwhile the number of closed pubs rose from 29 in the previous quarter to 36.

The number of pubs on substantive agreements fell from 258 sites to 237, GPC said.

With year-on-year drinks sales down eight per cent over the quarter, GPC's rental income fell by £800,000 to £2.8m in the first quarter of the group's financial year, with overall turnover across its estate down £400,000 to £10.9m.

Rental income represented just over 61 per cent of the group's earnings before interest, tax and depreciation (EBITDA).

GPC's EBITDA came to £4.6m in the quarter, down £500,000 on the previous three months.

Noting the increase in the number of pubs on rent concessions, up from 11 pubs added in the previous quarter, GPC said the move was "reflective of current market conditions and clear indication of the level of support we are offering to our lessees during this time".

Other supports measures included increased beer discounts, help with utility bills and allowing tenants to keep more of the income they get from machines.

GPC said its pub estate was now valued at £160m.

The pub operator said Deloittes, appointed last year as an independent consultant following a dip in the group's debt service cover ratio, had all the data on the company it needed to present a report on the business to its investors, who were currently considering its findings.

In May this year Heineken announced it bought bonds and bank debt held by GPC worth a face value of nearly £180m.

The move meant the Dutch brewer, which supplied GPC's pubs in the UK through its Scottish & Newcastle subsidiary, became the pub operator's largest single creditor.