It hasn't been all plain sailing

Self-made businessman David Bruce has won and lost a fortune in the brewery trade. He tells Lorna Harrison of the highs and lows and why he feels he has at last stumbled upon a winning formula via a government funding initiative.

David Bruce, founder of the ground-breaking Firkin chain, has a fabulous outlook on business: "If you're bored, move on." And that's exactly what he's spent his working life doing. Treading where other operators have feared to tread, David is well known for his pioneering pub exploits - some of which have been an almighty success, others miserable failures.

Starting from humble beginnings as a brewery trainee, David, 57, will be celebrating 40 years in the pub industry next year. His career path took many twists and turns, yet despite all his achievements, David feels he has only recently stumbled upon a winning formula with his successful Capital Pub Co venture - two pub companies funded through the relatively unexploited Enterprise Investment Scheme (EIS).

Last month the company celebrated the £3m acquisition of the Mitre, in Greenwich, boosting Capital Pub Co 2's freehold estate to five, which together with Capital Pub Co totals 16 pubs.

David and his team fought a hotly-contested battle for the site, and even won the deal with a lower bid than competitors because of their pledge to continue to run the pub, saving staff from the inevitable redundancy that would have followed should one of the property-dealers have succeeded.

The pub fits nicely into an envious portfolio of London-based sites, 14 of which are freeholds. They are all well-run, traditional pubs, away from the high street, with not a single hint of theming or branding - a far cry from David's Firkin and Slug & Lettuce days. Capital Pub Co was formed five years ago when David teamed up with Clive Watson, formerly of Regent Inns.

"We wanted to build a new business from scratch," he says. "We'd done all the high street, branded, themed pubs and wanted something completely different.

"We decided all our properties had to be freehold because we did not want to get shafted on rent reviews and they had to be non-branded, unthemed and, importantly, off the high street."

Government initiative​

David and Clive needed to raise at least £3m to get the business off the ground and approached specialist bank Noble Leisure which pointed them in the direction of the government initiative EIS. Through Noble, the scheme sources private investors who can put in anything from £3,000 upwards. In return for investing in a new company start-up, these investors are rewarded with certain tax breaks including exemption from capital gains and inheritance tax.

Noble estimated that David would raise between £5m and £10m but by February 2001 they had exceeded all expectations with a grand total of £15.4m. "No-one, anywhere had raised as much in that timeframe under EIS," he says. So Capital Pub Co was born.

Under EIS, companies cannot raise more than the government's £16m cap, hence the need for Capital Pub Company 2, which is a completely separate plc and is not brought under any group banner. Capital Pub Company 2 has raised £11.1m through 396 shareholders and although the future is unclear, Capital Pub Co 3 could now be a possibility with a new board and directors or even a possible float.

"I personally will carry on until it stops being fun," says David. "I love the challenge and still get a real buzz out of buying and running good pubs. I don't want to be a Robert Tchenguiz buying up the world and I'm happy having the time, energy and enthusiasm needed to hold on to a good success story. When you get something that works, you must go for it and we have hit on a winning formula with Capital. What the long-term future holds for the company depends on the market."

So where did David's passion and enthusiasm for pubs come from? Having failed to secure a university place, he was presented with two options - to take a trainee position with an oil refinery or with a brewery. He sensibly opted for the brewing position which he thought would be "more fun" and after three intensive years with Courage he landed a position in the company's personnel office since he was deemed to be too young at 21 to hold any position of responsibility. Not wanting to remain a mere pen-pusher, he took a brewing position with Theakstons. But this too came to an abrupt end when the company failed to make him a shareholder because he wasn't a family member.

Over the following few years, David had several failed attempts at launching his own business in the leisure market, instead landing a range of area manager jobs. Tired of touring around rough clubs and pubs, David went on the dole for nine months and "vowed never to work for anyone again".

Cut-and-thrust of business life​

A boarded-up pub in South London with a cellar large enough to accommodate a small brewery provided the turning point. Firkin pubs were born - a ground-breaking initiative that was to mark a change in direction for the British pub. Eight years and 12 Firkin pubs later, the outlets were sold to Allied Domecq for £6.6m.

Some of the proceeds were used to set up a charity, The Bruce Trust, which has provided holidays for over 7,500 physically and mentally disabled people on four purpose-built canal boats over the past 15 years.

But despite his first real bash at wealth and with time on his hands, David, in true spirit, became bored and missed the cut-and- thrust of business life. "I needed to get back into business and no longer wanted to sit on my proceeds," he says. David invested in Grosvenor Inns and was responsible for the roll-out of the Slug & Lettuce brand.

His success took him abroad where he became a founding shareholder and director of a dozen new breweries and pubs from Seattle to Paris, including Brooklyn Brewery in New York and Brew Moon in Boston.

In 2000 the storm clouds arrived when, through a joint venture, he invested in Brakspear's managed pubs division, Honeypot Inns, which resulted in personal losses of £350,000.

"It was all down to bad chemistry between myself and the chief executive at that time," he says. "Investing in 12 pubs we found ourselves in a classic text-book situation of being over expanded and under-capitalised. The problems arose through a clash of personalities and while I would always look on the optimistic side and try to find ways of overcoming problems, I was met with gloom and doom on the other side and realised I had to get out.

"The good thing is that from this failure came the introduction to Noble Leisure and EIS and an opportunity to start afresh. And here we are today."

David's 40 years of highs and lows make a fascinating and entertaining story, so much so that he's now considering writing a business book. So can we see a change of lifestyle? Is it time to take to writing, enjoy the garden or take advantage of an envious fleet on narrow-boats? "No, I will keep going because I love the challenge," says David. "I still get a huge buzz from this industry and find my role exciting. While that's still there, it's difficult to say when I'll quit."

David's gung-ho approach​

• Best known for: Firkin pubs
• Biggest achievement: Too modest to say
• Prefers to forget: Honeypot Inns
• Key to success: Work hard and retain a sense of fun
• Message to would-be entrepreneurs: Don't listen to the
  experts - follow your heart
• What does the future hold? Lots of fun!

Delegates at this year's Publican Conference on November 3 will get a chance to see what really makes David tick. As well as talking through the high and low points in his career, David will offer an insight into EIS and share his top tips for business success. To book call Michele Hams on 020 8565 4399 or click