Royal Bank of Scotland provides funds for development programme
The Royal Bank of Scotland (RBoS) is channeling £8m into its pub estate that is managed by the former bosses of Paramount.
The cash is to be spent on improvements to the 425-strong portfolio of outlets in the North and Midlands over the next three years.
The estate is run under contract by Pyramid Pub Management Company, which is headed by Paramount's former chief Paul Davies.
Paramount's 150 pubs were bought by RBoS last July for £19.6m, but its management remained at its Chester headquarters to launch Pyramid.
It also manages the 285 pubs bought by RBoS from Wolverhampton & Dudley Breweries at about the same time.
Mr Davies said Pyramid had spent the past 12 months consolidating the business.
"The bank is now committing substantial funds to enable us to embark on a development programme," he said.
"This will include ongoing maintenance and improvements to our pubs plus more major capital schemes.
"This investment will allow us to operate solid local community and rural pubs."
Pyramid has also launched a recruitment drive to attract skilled licensees who want to run pubs on traditional tenancy agreements.
Mr Davies said Pyramid believed there was still a demand for traditional tenancies despite the growth of longer-term tenancies and leases.
He led a £3m takeover of Paramount four years ago, helping to turn it from a loss into a profit.
The company was forced to sell out to RBoS because of a poor rating on the stock exchange and the lack of corporate deals to drive growth.
Mr Davies said: "Pyramid is a young company, but with experienced heads at the helm. We feel we have a lot to offer prospective licensees."
Pyramid is also stepping up investment in licensee training and plans to launch a series of pub promotions across its estate this year.
Operations and commercial director Neil Roe said: "Pyramid may be an unfamiliar name to many people, but we feel now is the right time to raise our profile.
"We will be making radical improvements to our estate to provide an environment in which our licensees can operate on a solid foundation."
RBoS also owns over 600 pubs that it has bought from Scottish & Newcastle (S&N), but these continue to be run under contract by S&N Retail.
The Royal Bank of Scotland Group, which now includes National Westminster Bank, has indicated that it would be interested in further investment in the pub market if the right package came along.