City Diary — 13 January
Fawcett's in the chair at Realpubs
Diary, a little slow off the mark, hears London-based company Realpubs has an interesting and unreported chairman in place — former Punch leased division boss Adrian Fawcett, who has a full-time job running General Healthcare Group. Realpubs' private equity backer Brockton Capital brought him in last year. A source says: "It helps with things like dealing with the banks.
He attends four board meetings a year and is a fairly low-key chairman." Realpubs founders Nick Pring and Malcolm Heap will have watched the £60m sale of Geronimo to Young's before Christmas with interest. The company has slightly more than half the number of pubs in the Geronimo estate, but is fully freehold, which means Diary wouldn't be surprised to find it worth in excess of £50m. Nice.
The ongoing Globe headache
Scottish & Newcastle Pub Company (S&NPC) has been shedding pubs like some of us would like to shed the pounds after Christmas. And the company is busy reducing head count in the wake of the loss of a couple of pub management contracts. Latest accounts filed at Companies House, for the year ending 31 December 2009, show turnover flat at £124m, with operating profit down by £8.4m to just £640,000.
But it's the troublesome Globe Pub Company joint venture that looks like the biggest unpaid bar tab in the sector — the original deal placed S&N's beer bill subordinate to interest payments. A further tranche of £23.5m of debt owed from Globe was formally waived in March 2010 — and there was a Globe-related impairment of £56.6m the year before. Heineken, you'll remember, got fed up with this and stepped in to buy back the Globe debt — the division is now called Blue Star.
Thomas promises hot air
Diary chum and sparring partner Stephen Thomas, former boss of nightclub company Luminar, sends a jolly Christmas card. Alongside seasonal greetings, the old bruiser, now running No Saints, tells Diary: "Wishing you all the best for 2011. I am sure you will be writing the odd article about No Saints. Just remember you don't want a hair drying — a la Alex Ferguson. I'm sure that won't be the case and I wish you all the success in 2011." Hard to imagine what Diary could possibly write that would warrant a "hair-dryer moment".
Young's deal is an eye-opener
The 26-strong Geronimo estate acquired by Young's before Christmas proves that it's possible to achieve a good sale price despite having a significant leasehold segment. Of the 16 leasehold sites, there are three airport concessions, nine free-of-tie commercial leases plus three Enterprise Inns sites and a Wellington Pub Company free-of-tie lease. And let's not forget that Geronimo is a prime example of the adage about tied pubs being an affordable point-of-entry. In this case, founders Rupert and Jo Clevely started with a Young's pub and ran a further two at different stages as they developed the business.
Capital gains... a 10th anniversary
The handsome price Young's paid to purchase Geronimo, which is only 50% freehold, should also hearten shareholders in Capital Pub Company. Talking of which, there's a milestone for Capital coming up — it's toasting its 10th anniversary with a lunch at The Cavalry and Guards Club in London's Piccadilly next month.
Chicago Rock axed over rent
Property landlords have become more realistic, haven't they? Not always, it seems. Atmosphere Bars and Clubs closed its Chicago Rock venue in Burton-upon-Trent, Staffordshire, just before Christmas after failing to agree a sensible rent with the site owner after six months of wrangling. The site came its way as part of the administration of 3D Entertainment in March last year. Atmosphere chief executive David Crabtree said: "The business was not making any money. We changed ownership in March and have been trying to agree a new lease with the landlord for the past six months. When we couldn't negotiate a rent, we decided to exit the property." Fair enough.
Myers emerges to fill role at Town & City
Many will remember David Myers from his days as boss of Avebury Taverns, snapped up by Punch Taverns in 2005. He pitched up before Christmas as the new non-executive chairman of Town & City Pub Company and Bay Restaurant Group. What's he been doing for the past half-decade? He's not been far from the sector, as it turns out, working as an adviser for private-equity outfits Duke Street Capital and Europa — the two firms bought Jersey and Guernsey firm CI Traders after Myers (above) cast an expert eye over the business.
He serves as chairman of CI Hospitality and is non-executive chairman of Premium Bars & Restaurants, whose assets are operated by Orchid Pub Company. So what's Myers' take on talk of a merger between Town & City and Stonegate Pub Company, the company currently chaired by Ian Payne? "Everything is possible — there will be a huge amount of restructuring in the industry in the coming months and years," he tells Diary.
Former Punch chief Thorley proves a snip in advisory role
The Punch annual report shows that the company hasn't entirely dispensed with the services of ex-chief executive Giles Thorley. He may have stepped down
in September last year but he will continue to provide advice to the Matthew Clark board until the end of June. It's a bit of a bargain, though, as it turns out his annual fee is just £15,000. The annual report also sheds a little more light on the bonus scheme on offer to Punch managed boss Mike Tye, right. A special Spirit Value Growth Plan was drawn up when he arrived back in June 2008.
The scheme seeks to reward him for driving the value of the managed division. Tye earns 7.5% of any addition of value in the managed business, "as determined by an independent valuation", over and above a hurdle of 6% compound annual growth.
Payments from the plan are phased and paid in non-pensionable cash — 60% is due after the year-end this coming August — and the remaining 40% is payable after the August 2012
year-end.
