City diary
by The PMA Team
Ramsay's carvery nightmare
Multiple pub operator Gordon Ramsay was decidedly sniffy about the all-week carvery at the Priory, in Haywards Heath, which featured in Kitchen Nightmares two weeks ago. Ramsay suggested the carvery was passé - his last visit to one was in the early 1980s. For those who missed the show, he whipped out the carvery and replaced it with a grill menu. It was as if Ramsay was completely unaware of what has been called the "carvery renaissance" by Whitbread's head of pub restaurants Mark Phillips. As ever, Pub landlord Al Murray provides the sharpest perspective on the carvery. In his book, The Pub Landlord's Book of Common Sense, he says: "Ideally your pub will have a carvery, which is the Rolls Royce of pub catering. The aim is to provide Sunday lunch with all the trimmings, every day of the week, all year round, including Sundays. Not all pubs will have a carvery, and there's no shame in that, apart from the shame of not having a carvery."
O'Neill's on the food learning curve
O'Neill's, the Irish bar chain owned by Mitchells & Butlers, is zooming up the food evolution curve. Its new menu includes Lamb shank and colcannon, blackened salmon & colcannon, a range of 8oz 100% Irish steak burgers and a wide selection of "pickers & sharers", perfect for those looking to enjoy a snack with friends. Nearly 50 O'Neill's pubs now offer a sharing roast dinner to get stuck into on a Sunday afternoon while more than 25 are now open early to serve breakfast. The times really are a-changin'.
Every silver lining has a cloud
It was pretty bad luck for Greene King last week to be reporting its first-half numbers the day after a Regent Inns profit warning and with market sentiment at its nadir. As Blue Oar Securities analyst Mark Brumby notes: "The market was in no mood to acknowledge good [or reassuring] news, found the cloud behind the silver lining and interpreted the numbers and comment badly, focusing on the fact that, while Half One had been 'successful', the second half was likely to be 'more challenging'." Greene King's share price plummeted 69p before making good the losses in the days that followed as some buyers spotted the robust fundamentals.
Tchenguiz quashes 'tabloid nonsense'
The wildest of rumours were circulating last Friday, suggesting Robert Tchenguiz, right, had suffered a £400m margin call on his Mitchells & Butlers stake. Quickest way to quash the taller tales is to ask him about them. "This sounds like tabloid nonsense," he said. "Our position is financed in the long-term and day-to-day fluctuations don't make a difference. Read our statement from a few weeks ago. We are long-term investors." People are definitely getting a little over-excited in these febrile times.
Mail's moral low ground
Talk about having your cake and eating it. The Daily Mail carries a story almost every day highlighting the moral perils of binge drinking and 24-hour licensing. Last Friday, page 40 featured a story on drunkenness causing increased air rage. The following two-page spread featured a Sainsbury's advert: two cases of beer for £14.
Braced for the brunch crunch
First we had the credit crunch. Now the Daily Telegraph has coined a sister term - lunch crunch. It refers to November's sharp drop in food sales at Tootsies, the chain owned by Clapham House, as consumers worry about increasing mortgage costs and dropping house prices. Presumably, it's all eyes on JD Wetherspoon, pioneer of the pub breakfast, and O'Neill's (see left), as to whether this spreads to a brunch crunch.
Free-floating freehold prices
One more dramatic example of how the air is coming out of the more spectacular freehold values attaching themselves to freehold pubs that had London & Edinburgh Swallow Group-linked companies as tenants offering to pay outlandish rents. A pub in Long Sutton, Lincolnshire, was offered for sale in October 2005 for £600,000, thanks to Newlord offering a rent of £47,000 per annum. It's back in the auction room this week, with a guide price of £200,000-plus. Still sounds a bit pricey for this part of Lincolnshire.
Glendola comes up trumps
Well done to Glendola Leisure, which has won in a rent review case against its landlord, the Shaftesbury Estate. Glendola's Waxy O'Connor's, in London's West End, was facing a substantial increase in rent on its 9,301sq ft premises. An independent expert decided there should be a nil increase, because Waxy O'Connor's doesn't have a late licence. Anthony Elder, of AG&G, who acted for Glendola, said: "The tenant's case centred on the blanket ban against the granting of new licences by the City of Westminster, which effectively creates a
two-tier district."
Hopes dashed at Hall & Woodhouse
Brewer and retailer Hall & Woodhouse's plans to build a new brewery were selected to pilot an initiative from the Deputy Prime Minister's office to streamline large, complex planning applications. Under the scheme, developers and local authorities work together on planning applications to agree timescales for decisions - an initiative that could dramatically reduce delays in planning decisions on large-scale projects. In terms of the new brewery development, this promised to increase the efficiency of the planning and development process and bring forward the timescale for completion. A decision on the planning application was due during the summer. Any progress? According to the company website, consent has not yet arrived. Thought it sounded a little too good to be true.
Magners prepares to regain lost ground
Looks like cider-over-ice pioneer Magners is gearing up to fight back in the UK market, where it has lost out to Bulmers in recent times. The company is looking for its first UK managing director. The suggestion has been that 150 redundancies may occur in Ireland as part of moves to allow increased marketing spend in the UK.
Regent support goes Walkabout
Analysts at Dresdner Kleinwort and elsewhere have been putting the boot in at Walkabout operator Regent Inns. On the back of last week's profit warning, Dresdner published a note entitled "Regent Inns - walking about aimlessly". It noted: "Regent Inns remains a highly indebted value-destructive company and noting comps are becoming increasingly tougher, we believe earnings risk remain on the downside." And a leading City analyst has been wondering, in off-the-record briefings, whether Regent's current problems might warrant chairman Bob Ivell working at the company full time.
Who's worth the money?
What's the covenant of a top-rate tenant worth at the moment? Tenants don't come much more reliable than JD Wetherspoon. The company's Willow Grove pub in Southport, Merseyside, sold on Tuesday last week for £2.625m - the day before the 0.25% interest-rate cut - thanks to a 35-year lease signed
in 2003 on which Wetherspoon's is paying £140,000 per annum, producing a yield for the buyer of 5.33%.
Guinness keeps customers sweet
More news from the front courtesy of CGA Strategy. It reports sky-rocketing draught Bulmers and Guinness Red at one O'Neill's site in Birmingham. There's been a large drop in bottled sales of both Bulmers and Magners Original because of the Bulmers draught tap. But there's a novel way of moving sweet-toothed customers over to the new Guinness variant. Reports CGA Strategy: "The venue has noted an increase in the amount of Guinness Red sold, mainly due to a 'free pint voucher' given away in the local newspaper. Bar staff have said that once they use the voucher, customers seem to stick to the Red and don't go back to the normal Guinness."
