Utopian dream

The licensed sector is one of those industries people find difficult to leave. Take Bob Senior. The founder and chief executive of North East late-night bar operator Ultimate Leisure stepped down last August "after consultation with certain shareholders and in order to pursue a new strategy".

Ousted by disgruntled shareholders, Bob has subsequently re-emerged with a new venture, Utopian Leisure.

Bob claims he had no choice but to leave Ultimate Leisure after major shareholders ignored his warnings of a downturn in trade. And the former chief executive, who says he advised that the company should stop expanding, says his predictions now appear to have come true.

While there may be a touch of schadenfreude about his comments, Bob is nothing if not confident, particularly in his belief that Utopian Leisure, which already has three venues and an annual turnover of around £3.5m, will increase to eight pubs and clubs and a projected turnover of £15m by the end of the year. He hopes to achieve this expansion goal by buying up bars for bargain prices as other companies struggle.

If he gets all his ducks in a row it would be a case of history repeating itself for the 51-year-old, who established Ultimate Leisure nine years ago and turned it into a leisure empire worth nearly £100m, with 32 pubs, clubs and hotels.

Well-known venues

The company opened some of the North East's best-known venues with expansion taking Ultimate into South Yorkshire, the Midlands and even Ireland.

Profits grew tenfold in seven years - from £850,000 in 1997 to around £9m in 2004.

"I had served a 22-year apprenticeship," says Bob, "and I had applied it very successfully to build a company where people were not only happy to come to work but where we also managed to get 25 per cent of turnover added to the bottom line and increase our profits year-on-year, every year. Although myself and the other directors had robust debates, we never fundamentally disagreed once."

The company's success was aided by timing; Newcastle's reputation as a "party city" was mushrooming. On a typical weekend, 80,000 revellers poured into the city and some bars could take £10,000 on a Saturday night.

But in early 2005, Bob suddenly sensed the party was coming to an end, with factors including a general downturn in the economy, yet more bars opening and a clampdown by police concerned at reports of binge-drinking.

"Trade was thin and everybody was suffering. People were coming out much later. We had all of this going on and I saw November 24 and the new licence regulations looming. That would mean city-centre bars would have to compete with community pubs, which would also be able to get late licences," he says.

"The company's plan was to continue expansion and continue increasing profits but I thought differently." On July 7, 2005, at Bob's suggestion, the board sounded a cautious note in a statement to the stock market.

Bob says he called for a halt to the expansion, but was summoned instead to the major shareholders' office in London. "I told them we had to consolidate our position. They said we should keep on buying and growing. I thought it was entirely the wrong strategy.

"They didn't like what I said, so they shot the messenger. I resigned, along with pretty much the rest of the board."

Job offers arrived but Bob says he didn't want to work for anyone else "and be subject to the dictate of financial people who didn't understand the industry."

Instead, he joined up with Tim Wynn, who had served as property director at Ultimate Leisure. In October 2005 they set up Utopian Leisure Group, investing £1m of their own money into the project.

Then a call came from the Royal Bank of Scotland, offering the pair a £50m facility. Barclays then increased the facility to £100m. Suddenly the hunt was on for suitable venues. "We started to look around. We knew we needed big bars to allow us to put on entertainment and dancers."

Utopian's first purchase was Bar 55 in Newcastle's city centre. With a capacity of 850 and a 2am licence, the company is about to spend £100,000 converting it to Studio 55, based on New York's famous Studio 54 disco club.

In December 2005 Utopian bought Sam Jacks, a 1,100-capacity sports-orientated bar close to Newcastle United's football ground, and has also announced a further £1m investment in a new development in Durham.

Utopian now employs 95 people, and despite his warnings to Ultimate Leisure about expansion last year, Bob feels he can still grow his new company - so long as he bids and buys wisely.

His main concern surrounds shifting patterns of consumer spending patterns. "The traditional circuit used to be a number of bars ending with a club, but that's all disintegrating," he says. "You have to give them a reason to come in. You have to stand and shout louder than in the past.

"For example, door charges are a thing of the past. We're getting an older clientele - 25-plus - who are reluctant to part with their cash so they can get in somewhere, and then have to pay again at the bar.

"Otherwise, we operate on the same mentality as when we were at Ultimate Leisure in terms of giving people a safe, clean, comfortable environment to enjoy themselves in."

Bob still feels others may find the going difficult. "I take no pleasure at all in discovering, as time unfolds that my warning which cost me my job has turned out to be pretty close to the truth," he explains.

Over the next year he still believes "the industry is going to see some big casualties".