City Diary — 11 March

Seeking a ringing endorsement​

Shepherd Neame boss Jonathan Neame relied on a surprising source to defend the family brewers tied model — Fair Pint protagonist Mike Bell. "Almost all protagonists within this heated debate would agree that the family brewer tenancy model is not the problem," said Neame. "I have taken the liberty of including an extract from an interview on the You and Yours programme with Mike Bell of Fair Pint and myself. In this Mike gives a strong endorsement of our model." Well, if Mike Bell says it's okay, it must be.

Fuller's gives BISC facts on failure​

Brewer and retailer Fuller's dropped the Business, Innovation & Skills Committee (BISC) investigation into the pubco/tenant relationship a note pointing out that it's not just tenants of the major pub companies that have been failing in the recent economic climate. It told BISC that it had a list of 22 companies, running more than 1,500 pubs, that have gone into administration since January 2008 — and not a single tied site among them.

Pubcos' machine income still high​

The British Association of Pool Table Operators is still arguing that Punch and Enterprise are over-earning on machine income. A note to the Business Innovation & Skills Committee said: "Information shows that for the latest AWP machines, Punch Taverns tenants are paying £22.50 per week more for their machine than a free-of-tie tenant, and Enterprise Inns tenants are paying £21 per week more than a free-of-tie tenant (the machine supplier then pays the extra rental payment to the pubco in the form of a royalty)."

Wellington pays out dividend​

Free-of-tie specialist Wellington Pub Company, which has 850 pubs, seems to be faring better than most on the tenanted side of the fence. In the year to 31 March 2009, it was able to pay an interim dividend of £7.19m. Pre-tax profit was down to £13.9m compared to £17.6m the year before and turnover fairly static just above £31m. Nevertheless, there was an early teens percentage writedown in the value of the estate of £73m to £481m.

Marston's glad of Magpies' payout​

If there's one thing less profitable than a brewery, it's a football club. So good to see Marston's among those receiving payment of overdue bills from new owner of Notts County Ray Trew who has already pumped more than £1m of his own cash into the club. After revealing debts of £6.7m last week, the Magpies' chief paid off a £374,000 tax bill to fend off a winding-up petition from HM Revenue & Customs — as well as footing the bill for the court costs. He paid the players' wages for last month and paid Marston's £54,000. Trew said of the debt: "There is no surer thing than it will rise."

Stella's stats show market gain​

Talking of breweries, Stella Artois brewer AB InBev UK popped its accounts for 2008 into Companies House last month. Market share rose to 19.7% from 19.3% the year before. Volumes were down 3% on the year before, an out-performance in a market down 5%. Losses were a lumpy £77.2m on turnover of £1.3bn — the year before it had lost £52.68m on very similar turnover.

Haslam manages fourth outlet​

Multiple lessee Steve Haslam has just taken on his fourth Enterprise Inns pub — a temporary management site, the White Horse in Haverhill, Suffolk. There was great interest on our website, with posters wanting to know the in and outs of its various lease arrangements with Enterprise.

Commendably in this age of transparency, Steve even let us know what rents he's paying at each site: £80,000 per annum at the Cutter in Ely, Cambs; £73,000 at the White Horse, Ramsden Heath, Essex; £50,000 at the Windmill, in Peterborough; and £10,000 per annum at the White Horse, in Haverhill. City Diary has done a back-of-an-envelope calculation and worked out his dry rent is where it should be for someone with his retailing skill — a low single-figure percentage of turnover. And things should be fine now nobody believes in rentalising success.

Happy ending to Ferry story​

Looks like a happy ending for the Ferry Boat Inn on Norwich's Wensum Street, which had an uncertain future after Greene King placed it on the market. The Borthwick family plans to turn it into an "eco-friendly" hostel. They have bought the property to model on their current backpacker hostel, Deepdale Farm, on the north Norfolk coast. The hostel, which would be the only one in Norwich, should open next year. It will offer accommodation along with canoeing, cycling and a café. Alistair Borthwick, one of the new owners, said he "definitely felt" that a small real-ale pub on the site would be an excellent addition.

Slug affair moves at snail's pace​

The finalisation of the affairs of former Slug & Lettuce operator SFI Group would have tried the patience of a saint. The company was put into administration on 23 June 2005 and converted to liquidation on 15 June 2007. In March 2007 its former auditor coughed up £6m in an out-of-court settlement. Unsecured creditors are, unusually, entitled to 12.5% of net litigation proceeds — a sum of £670,103.

A PriceWaterhouse Coopers source tells City Diary: "The dividend arising from this claim will be split among the 7,000 litigation entitlement holders in proportion to the size of their individual holdings. Individual dividends are likely to be very small and as a £3 de minimis per holding payment level was incorporated into the terms of issue, it is

likely to eliminate many litigation entitlement holders from receiving any dividend at all."

And when is the pay-out due? Some time in the second half of 2010.

The toughest job at Brulines?​

It's not an easy job being a Brulines customer account manager visiting pubs where there has been "volume variance". Under the Health and Safety at Work Act 1974, Brulines records all instances where one of its inspectors is "abused or assaulted" in the course of his duties. Brulines recorded nine "recorded instance of unprovoked incidents" in 2009.