City Diary — 11 February
On the move at Greene King
Arrivals and departures at Greene King. City Diary hears that Brewing Company marketing director Fiona Hope has left to become marketing director at Sodastream UK. Hope spent three years and six months working at Greene King before joining Sodastream last month. Meanwhile, tenanted new boy Simon Longbottom joined the company at the start of this month after running Gala Bingo. He knows a thing or two about recruiting new customers. Last year, he organised a free bingo day that saw 250,000 arriving at his clubs. Imagine how powerful a draw a free beer and bingo day at Greene King's tenanted division might be, Simon.
Hat trick bodes well for Haslam
Enterprise Inns dream lessee Steve Haslam opened the Windmill in Peterborough just before Christmas, his third Enterprise site. City Diary called in over the Christmas break and was blown away by the quality of the nosh. Sources indicate that the site has already lifted itself north of the £20,000-a-week takings threshold.
£29 price point proves elusive
Whitbread is offering Premier Inns rooms at an eye-catching £29 a night. "We own the £29 price point" is what executives told City analysts at a briefing last week. Turns out though, analysts were told, only 4% of customers pay as little as £29. Clever people, marketing folk.
Door costs revolve for JDW
Morgan Stanley analyst Jamie Rollo reports an alarming fact in relation to door costs at JD Wetherspoon (JDW) — they've increased from £1m a year six years ago to £7m to £8m currently. Can it be true? Chief executive John Hutson says: "They've certainly risen, but not quite that much. Before the new licensing regime, the vast majority of JDW pubs closed at 11pm, so opening later has often meant employing doorstaff as a condition. There's also been a pulling back of hours to an equilibrium."
JDW and 3DE — deal or no deal?
Where has the "deal to do a deal" between JD Wetherspoon and 3D Entertainment (3DE) over 12 leasehold nightclubs got to? Wetherspoon agreed to buy the sites from the stricken nightclub operator for about £4m subject to landlords agreeing to drop rents by 20% to 30%. Hutson reports that, as of last week, not a single sale had exchanged yet as negotiations continue with landlords. "It will be as it will be," he says.
Pubco shares seem a good bet
Bank of America Merrill Lynch hosted a pub sector investor day last week that was well-attended. Pub analysts there rate Punch and Enterprise share price as well worth a punt. Here's the reasoning: "We think the main catalyst for these stocks to perform well will be continual improvement in trading. For Punch and Enterprise, respective net asset values of 275p and 300p imply discounts (in current share price) of more than 60%. This means the property would need to fall a further 20% to 25% to get to the current share price. Given the improvement in the property market and disposals at book value, we feel such a fall is unlikely. We are buyers with a 240p price objective for Enterprise and 200p price objective for Punch." So there.
Pubs high up on search engines
Bosses at Microsoft's search engine Bing have spotted that the British like their pubs. Bing director Stefan Weitz has set out his strategy for breaking into the UK market at the Consumer Electronics Show in Las Vegas. "There's a lot of local type queries in the UK — trying to find the best pub down the street from you."
Mitchells & Butlers expansion looks set to be a long-term affair
Mitchells & Butlers wants to expand six key brands — Vintage Inns, Sizzling Pub Company, Harvester, Toby Carvery, Crown Carveries, Premium Country Dining — by around 50% to 100%. Sounds good. But City Diary comes across a copy of M&B's in-house magazine, The Magazine, from 2004 that allows a comparison of how four of the brands have grown in the past six years. Vintage Inns has expanded around 10% — it had 204 sites in 2004 and 227 now. Harvester had 137 venues in 2004 and 172 now — growth of around 30%. Likewise, Sizzling Pub Company has grown by around 30% — it had 150 sites in 2004 and has 197 now. Toby Carvery has done best — 80 venues in 2004 compared to 133 now so growth of around 60%. Crown Carveries and Premium Country Dining — 111 and 57 sites — did not exist in 2004. But, on the whole, past growth rates suggests current expansion plans might be a decade-long project. The magazine is also a reminder of a few brands where the spotlight is well and truly dimmed. Edwards was at 30 sites in 2004 and there were 40 Goose high street discount pubs.
No celeb sale for top Norfolk inn
Rumours have been flying that the Hoste Arms in Burnham Market, Norfolk, may come on the market as owner Paul Whittome receives treatment for cancer. Whittome has owned the inn since the early 1990s, building it into the second busiest inn in the whole of East Anglia and the East Midlands behind only the George at Stamford. The Independent has placed the difficult call here to see whether it is true, having heard that Norfolk-born actor Rupert Everett has expressed an interest in buying. "It's absolutely not true," a spokesman tells the Indie. "Whatever happens, there is no question of a change of ownership."
