Privately-owned pubcos are star performers

The UK's privately-owned pub groups are more likely to be potential takeover targets, according to a new report by business analysts Plimsoll Publishing.

Recent research by Plimsoll shows that 752 of the UK's top 914 pubcos - 82 per cent - remain in private hands, and their values are increasing faster than those of their corporate competitors.

According to Plimsoll's senior analyst, David Pattison: "The increasing age of owners and principals at some of these companies is causing them to consider their choices.

"While many family firms have succession plans in place, an offer for the company at the crucial moment is often listened to sympathetically, as the new generation review their options.

"But the big prize for corporate and private raiders is the hidden potential of family-run companies. Current owners typically strip out 80 per cent of profits as fees. To the value hunter, this is a huge platform on which to build.

However Pattison says the problem for private companies wishing to sell is that many of them "haven't done themselves any favours in the past in terms of promoting the value of the business.

"With the help of professional advisers, they have become very adept at hiding their worth. When they go to sell, there simply isn't the evidence to support a high asking price. Potential buyers will always make a low offer in this situation because they simply won't believe a company's own unsupported figures."

The changing atmosphere in the industry has an upside and downside for staff and for the wider economy, added Pattison.

"On the one hand, if families increasingly withdraw, the sector is in danger of losing the steady corporate stewardship and entrepreneurial drive that has been a cornerstone of the economy for the last 60 years.

"On the other, new professional owners, despite bringing more debt and risk, may offer greater focus and drive, benefiting the company and its employees in the longer term."