Bulldog Pub Company pulls out of pubs

The Lincolnshire-based Bulldog Pub Company (BPC) has announced that it has all but pulled out of pubs, blaming the current trading environment for its exit.

Noting that the group was looking to move into the hotel market, BPC founder Kevin Charity said the group needed a third revenue stream beyond food and drinks sales, and hotel accommodation was proving to be more profitable.

BPC currently runs three hotels and two "very profitable" pubs, he said, having had 20 pubs at one point.

The group has sold the bulk its pubco leases and some freeholds during the last 18 months. The group would be looking to offload its two remaining pubs sometime during the next year, Charity said.

Meanwhile the future for smaller, pure pub operators was bleak, he believed, with recent trading being "awful".

"Operating wet-led and High Street venues is over for the small multiples," Charity warned.

"The only long term survivors will be individuals who put their life and soul into it and the large scale multiples who get economies of scale," he added.

Hotels, on the other hand, offer a more reliable earnings stream. "There is a service cost involved in hotel accommodation, but sell one for an evening and you've got cash profit," Charity said. "The more rooms you've got, the better the EBITDA."

BPC currently has three hotels, including the White Hart in the Lincolnshire town of Boston, and was looking to acquire up to 20 coaching inn-type sites during the next five years, paying anywhere between £2m and £5m a site. Some would inevitably require "various levels of capital investment", Charity said.

He added that the new-look, hotel-focused group would aim to be run along Opco/Propco lines: "This gives us options going forward. Some investors will have hotels and they would be able to bring them into the group's portfolio."