City Diary — 22 April

Tory well placed in pub world​

One Conservative politician with a hot line to the pub world is deputy chairman Michael Ashcroft. City Diary understands Ashcroft is the main shareholder in LT Pub Management, the pub management company led by Billy Buchanan and chaired by ex-Heineken UK boss Jeremy Blood. Ashcroft, who holds dual British and, er, Belizean nationality, was made a life peer in 2000, and placed 37th in the Sunday Times Rich List with an estimated fortune of £1.1bn.

Enterprise enjoys post-auction hits​

Some wondered whether Enterprise Inns was having a wobble in the auction market after recent auctions seemed to leave a few pubs unsold. Far from it — it turns out pubs were selling, as often happens, post-auction. The Solihull-based company has seven or eight pubs lined up for each of four auctions in the next quarter. In the current financial year it has now sold 36 pubs on a sale-and-leaseback basis realising proceeds of £63.4m and an average yield of 6.4%.

Punch pay is on trend​

At least Punch Taverns was on-trend last year when shareholders voted against executive pay proposals. Violations of best practice last year attracted a higher number of no votes at annual meetings than the year before, said the Association of British Insurers (ABI). The ABI's voting service put 72 "red tops" on company reports ahead of the vote at annual meetings, indicating serious breaches of shareholders' standards on good governance. This was up from 60 red tops in 2008. Close to half of red tops in 2009 were triggered by pay for executive directors. Five company reports on pay, one of which was Punch's, were voted down by investors in 2009.

Punch gets Brum go-ahead​

Punch was a little red-faced earlier this year when trying to win planning consent to demolish the Cross Gun in Birmingham's Washwood Heath Road and build 13 houses. A third party working for Punch supplied planning councillors with a list of alternative pubs nearby — the list included a number of pubs that have closed or been demolished or were restaurants and function rooms. Unusually, the Cross Gun has a licensee, Craig O'Doherty, who wants to stay. A fortnight ago Punch won planning approval to knock the pub down. A Punch Taverns spokeswoman told the local newspaper: "The current licensee can only claim viability based on uneconomic low rent and a free-of-tie deal."

M&B steps on gas for dining pubs​

Mitchells & Butlers is planning to hit the accelerator on its Premium Country Dining format, boosting numbers from 64 to 150 in less than five years. To hit the target it means opening 17 or so a year — or one every three weeks — while starting to undertake "sparkle" jobs at the early sites that opened half a decade ago. It's a big ask, of course, but sources indicate that the company is eyeing one existing brand as a prime source of conversion sites — Ember Inns.

£3k sting in the pubco tail​

Large pub companies have vowed to get more rigorous in ensuring people taking leases on assignment have good quality business plans in place before they fork out a premium. But there's moaning that one large pub company is now charging licensees £3,000 rather than the previous £1,200 to process assignments. It's a bit naughty, guys

Loungers takings not slouching​

Loungers, the whizzy south-west café bar operator, opened its latest site, Seco Lounge in Plymouth's Royal William Yard a few weeks ago. The company is trail-blazing at this development, but is already reporting weekly takings above the £20,000-a-week mark. The site may well take the biscuit for the longest rent-free period yet offered by a landlord — two whole years.

A little Jamie gold rubs off​

Jamie Oliver's impressive restaurant chain Jamie's Italian is taking serious cash — sources indicate £70,000 to £80,000 per venue per week. City Diary found the Brighton site had a 40-minute waiting time for a table, even at 6pm. There also seems to be a Jamie Effect for anyone trading nearby. One Brighton operator tells City Diary takings have risen by £10,000 a week at his pub located on the same street as Jamie's Italian.

Are the Standards slipping?​

It's like business journalists on the London Evening Standard are competing in a "who can be the silliest" competition. First columnist Anthony Hilton claims the main way to achieve the rapid profit growth that Mitchells & Butlers is seeking is to fleece the customers — sell them worse and less food. "It works for a little while, until they notice," the Standard claims.

As we know, the history of M&B has run counter to this strategy at every turn. It's why it's taken market share year after year. Then Standard columnist Simon English argues that "anyone with a soul" should oppose the expansion of M&B drive brands because it will result in "many hundreds of so-so chains selling the same dishes in Yorkshire as they do in Cornwall". Snooty English would deprive future customers of the chance to opt to visit a Toby Carvery, say, because he fears his (and their) spiritual side would be violated. This kind of attitude normally means one thing and one thing only — here we have someone who doesn't actually like pubs or the people who use them.

My advice from Fred the Shred​

JD Wetherspon founder Tim Martin was the star turn at last week's MA200 seminar for multiple operators. Among the many things he revealed was that he was once offered the chance to buy his local football club, Exeter Town, and that he does in fact support Northern Ireland team Derry City, having lived there for a while as a youngster. He also told the audience that he'd once received advice from Fred "The Shred" Goodwin.

The former banker advised Martin that he should be keeping a lower public profile on account of the danger of stirring up negative publicity. Martin advised Goodwin that he thought that a number of the bigger loans to pubcos may be ill-advised. Ironic that Martin was right and that Goodwin is now taking his own advice on the profile front.