Rays of sunshine or flights of fancy?
For the country's more cynical pubco watchers, Enterprise Inns' demotion from the FTSE100 share index last week probably came as a ray of sunshine after an otherwise depressing summer.
Being booted off the 'Footsie', the index which supposedly comprises the country's crème de la crème of UK listed companies, was another nail in the coffin of the leased pubco model, doomsayers argued.
Yet counter this with another slant on the situation which I heard last week. "There has never been a better time to be in the market for a leased pub." Yep, I heard someone in the licensed trade game say just that. The current market was a potentially good one to get into for those blessed with enough spare cash, it was claimed.
You can understand why I'm losing my hair.
In or out of the FTSE100, there are few, if any, analysts in the City I know of who think Punch Taverns and Enterprise won't still be here in 12 months time. Or 24, even. Battered they likely will be, but in situ they will probably remain.
Last week I met representatives from a number of US institutions, all of whom have large holdings in UK pubcos. They all take a long-term investment view and accept that while sales will decline in the next year, maybe 18 months, believe that the long-term prognosis for the model is good.
What the City and Wall Street fear is a dramatic and sudden collapse in sales. So will this happen? If so, when? Or conversely, will we see a gradual if painful decline followed by some semblance of recovery - albeit one that will stop short of the sort of trading levels witnessed a few years ago? I suspect the latter will be closer to the truth.
But there's no doubt any sharp and persistent downturn in sales would trigger all sorts of debt payment-related issues, prompting Enterprise's Ted Tuppen and Punch Taverns' Giles Thorley to have some rather tricky chats with their bankers and bondholders.
Meanwhile there are rumours that things are actually a lot worse for the UK's two largest pubcos than both companies are letting on.
Rumour or fact, in this market sentiment and perception are powerful drivers.
Fingers - and everything else - crossed then…
