City Diary — 28 October
Quercus's big top seeks new sites
Former Greene King tenanted boss David Elliott is seeking pubs for Cardiff-based, Guernsey-registered property investment fund Quercus. The plan is to operate 250 to 500 pubs. Diary hears that Elliott hopes to complete on his first acquisition within three or four months. Word is that Quercus has raised a substantial war-chest through a couple of City investors, and that the new pub company will be based near Bristol or Bath, with Elliott initially fully involved, before becoming a part-time chairman.
Oliver poaches towns' top talent
The best ideas are often the blindingly obvious ones. Jamie's Italian, the gang-busting casual-dining concept from Jamie Oliver, is reportedly taking north of £70,000 per week at each of its 15 sites. Keeping up that momentum needs, not least, great people and service.
To ensure they get the right staff, Jamie's crew apparently turn up in a town a few months before opening a new restaurant, visiting their competitors for a meal here and a drink there. Those servers who impress the most, be they from Wetherspoon or Wagamama, then receive a calling card and promise of work at Jamie's latest restaurant.
The lure of working for the Naked Chef has proved hard to resist, and the tactic has seen some rather unhappy bar and restaurant operators ceding their best people. Simples!
Barracuda bottom bashed
Ouch! The sales details of 26 Barracuda pubs — eight freehold, 18 leasehold — being sold by agent Christie & Co shows just how badly the managed operator's tail has been eroded in the past two years. At the 22 sites with trading figures for 2008, turnover has dropped by around 40%, plunging from £13.48m to £8.37m for the year ending September 2010.
There are also now five non-trading leasehold sites, with a combined rent roll of £416,188. The most painful cross to bear is the Barracuda bar in Newquay, which had a turnover in 2008 of £836,609 but is now closed, yet costs the firm £154,400 a year in rent. Incentives are available for would-be tenants on this site, and a few others.
BBPA exec goes back to basins
Dr Martin Rawlings, the BBPA's head of pubs and leisure, has had the chance to go back to the floor. His daughter Bex and son-in-law Ian are 18 months into running their first pub, Charles Wells' Old Crown in Ashton, Northamptonshire. Bex was previously a hospitality manager at Silverstone while Ian was a chef at various pubs within Mitchells & Butlers' gastro-division. Martin and his wife have been doing pub shifts — running the place for the entire August Bank Holiday weekend — to give the couple a break: "We had the Friday night off, but then got a call to come and help. It was manic — what followed was four whole hours solid of washing up."
No Saints' divine intervention
Good to see ex-Luminar CEO Stephen Thomas sticking cash in the coffers of the firm he founded. He quit on 1 March this year, but his company No Saints Limited helped stabilise Luminar's finances by buying its Cheltenham site for £600,000 during the summer.
New licensees take Bull by horns
The Bulls Head In Mobberley, Cheshire, is worth a butcher's. Sector luminaries Tim Bird (ex-Michael Cannon lieutenant and the brain behind Que Pasa) and Mary McLaughlin (a former La Tasca executive) are describing it as the "pub of the future". Before they got their hooves into it, the pub was taking just £700 a week.
Since re-opening in May, it's been taking a hell of a lot more. They also run the Red Lion in Weymouth, but will be focusing on expansion in the North West through their vehicle Cheshire Cat Pubs & Bars.
Mural's the mane event in pub sale
The freehold of Enterprise's Princess of Wales pub in Primrose Hill was up for grabs last week, with a guide price of £950,000 to £1,000,000 — Enterprise promised to pay a rent of £75,000 per annum for 35 years.
Auctioneers Allsops might have been hoping that a Banksy in the garden could add a few thousand to the value — a mural of a lion and a little girl sprang to fame in June when the artist was supposedly filmed at work on CCTV. But before the auction, a spokeswoman for the famous sprayer, whose graffiti is supposedly worth shed-loads, told Allsop that the bloke on film was an imposter. In the event it didn't matter — somebody still forked out a mind-boggling £1,590,000 for the pub, which means Enterprise's rent there produces a yield of 4.46% on their money.
Brewer's on-trade takings are a Coors for celebration
Our friends at Carling-owned Molson Coors should be chuffed with the pub sector. The UK's second largest brewer, has 5.8 million barrels, and pretty good 2009 figures for the on-trade, especially compared to the off-trade. On-trade business accounted for 64% of total volumes and an "even greater proportion of margins".
Volume declined by just 0.8% again, at a market down 5% in the on-trade. Meanwhile, volume in the off-trade declined by an astonishing 22.9%, as Molson Coors balanced "pricing and volume considerations". (In other words, Molson Coors walked away from no or low-margin business in the off-trade.)
Turnover rose by 0.7% to £1.346bn, with volume declining by 10.1%, but selling price per barrel increasing by 12.1%. Profit before tax was still a measly £28.7m — although this was better than the thumping £282.9m loss in 2008.
