City Diary: 29 January

Operator made to come clean​

There's a limit to the patience Enterprise Inns is showing to multiple operators who throw back sites via the route of pre-pack administrations, while expecting to run other Enterprise sites. "You can probably work out what our response is," chief executive Ted Tuppen told City analysts last week. City Diary hears that one well-known managed multiple that abandoned a pub with the ashtrays (and everything else) uncleaned was "persuaded" to go back with the cleaning products and sort it out.

Tuppen wishes Winston well​

You may remember that Charles Winston, leisure analyst at Redburn Partners, is giving up on the pub sector. He told clients that he's switching to analysing car manufacturers because "we no longer believe that the pub sector is an economically viable sector" to cover. Winston got into hot water after suggesting that Punch Taverns shares were "heading for zombie status". He later retracted after conceding mistakes in his analysis. There were no hard feelings about the snub from Enterprise boss Ted Tuppen at the analysts' meeting last Thursday. "Good luck in the motoring industry," Tuppen told him.

Enterprise's rapid rent reduction​

Some tenanted pubcos are quicker than others when it comes to rent concessions at pubs that are clearly over-rented. One top-class managed multiple praises Enterprise Inns for its willingness to reduce rent by a four-figure sum. The multiple has another pub, owned by a different tenanted pubco, where earnings stand at £100,000 per annum for the pubco and precisely nothing for the managed operator. In other words, there's a rent reduction required at what was a failed business before the arrival of the aforementioned multiple. The only suggestion from the tenanted pubco in question is that the managed operator should reduce its wage bill at the pub. Ring City Diary on (01293) 610344 to hear the name of the company in question.

Saved by the small print​

There are some peculiar things going on amid troubled times. City Diary hears of one senior pub executive who was warned that redundancy loomed. When the executive made the company aware of the contractual obligations in respect of salary, the redundancy plan was swiftly dropped. Not very good for morale, is it?

Spirit's toxic boomerangs​

Some Spirit sites are like boomerangs — they keep coming back no matter how far they are thrown. Take the toxic Woolpack in Norwich, a pub that may or may not be over-rented because of a sale and leaseback in Spirit's private equity days. It recently closed again after passing through a series of companies like a bad pint. Spirit sold it originally to Tattershall Castle Group, who moved it on to Free Spirit who then moved it on to the Good Time Pub Company, which went into administration. The lease reverted to Spirit, which then leased it to the Norwich Pub Company. Norwich has stopped trading it, slapping Spirit on the back of the head once more.

JDW widens the 99p price net​

It's pretty obvious that Greene King is far from happy that JD Wetherspoon has been selling its IPA for 99p a pint. Turns out, though, it's not alone. Reliable sources indicate that Marston's Pedigree and Scottish Courage have been sold for 99p at those Wetherspoon pubs where the IPA runs out. And in Scotland, it's Deuchars IPA that's being flogged for less than £1.

Wetherspoon's debt situation​

Deutsche Bank analyst Geof Collyer has a nomination for the company with the biggest refinancing hurdles to overcome — JD Wetherspoon. In December 2009, Wetherspoon has to repay an £87m US private placement. In 2010, the remaining debt — a bank facility of £522m — is due for refinancing. "There is almost no way that Wetherspoon can repay its debt within the required time frame — it has to roll it over or seek to refinance a lower amount," says Collyer. "We would expect the market to focus more on the harsh realities of the group's debt situation as it approaches the publication of interim results in early March."

Analyst in cheap beer hunt​

Everybody likes a bargain, even well-paid City analysts. Imagine the disappointment of KBC Peel Hunt's Paul Hickman when he couldn't find a 99p pint at his local City Wetherspoon. He was even moved to write about it this week. "We tested the proposition with a field research trip to the Green Man at Poultry, EC2. Unfortunately, the proposition buckled at the first challenge, with a £1.49p price at the bar (50% higher than we were expecting). Not wishing to appear mean-minded, we took it up with management. 'Seven hundred pubs, and you choose the one that isn't doing the offer' was the response. Well, not just one, actually, but a select group in the City (presumably the ones frequented by JDW's analysts and investors)."

Pole to pole with Phil Thorley​

Thorley Taverns boss Phil Thorley was in Val d'Isère last week on the Association of Licensed Multiple Retailers ski trip. One of 50 attendees, Thorley gave his usual end-of-trip comedy tour de force where he holds centre stage and recounts tales involving fellow guests. It's one of the highlights of the trip, with Thorley teasing nearly every guest without offending anyone. This year Thorley managed to drop one of his ski poles on a chair lift. He was greeted by fellow guests with the chant: "There's only one pole, Thorley. One pole, Thorley."

Val d'Isère value squeeze ​

Value offers may have become increasingly important for the UK's pub sector, but they were less prevalent in Val d'Isère. Prize for the most over-priced meal went to the burger and chips that cost @29 — £29 give or take some loose change.

ALMR's big wig-out​

The ice was broken in Val D'Isère with a wig-and-hats party on the first night. Tadcaster Pub Company boss James Crawfurd-Porter looked fetching in a pink wig. Crown Awnings boss Tony Holman looked striking as a Viking and came second. But first place went to Punch Taverns operations manager Adam Smith, its former head of recruitment, who looked ravishing in a snow-white beehive Marie Antoinette wig.