Hawthorn Leisure could grow to 2,000 pubs

08-Jun-2014 - Last updated on 09-Jun-2014 at 16:34 GMT

Hawthorn Leisure is the UK's newest pubco

Up to 2,000 existing pubs could fit the criteria for Hawthorn Leisure, which has no cap on its expansion ambitions, according Noah Bulkin of the company’s joint backer May Capital.

It follows last week’s news that the company has acquired a further 88 pubs from R&L Properties and also completed on the acquisition of 275 tenanted and leased pubs from Greene King.

Bulkin, founder of May Capital, the joint backer of Hawthorn Leisure along with Avenue Capital, told the Publican’s Morning Advertiser’s sister title M&C Report that the R&L portfolio, which is mostly located in Scotland, is “probably more diverse” than the Greene King package.

He said: “We’ve got a few more empty pubs that need re-tenanting. Some of them are recently well invested, some of them are significantly less well invested than the Greene King pubs.”

He added: “We’ve set aside a very significant amount of capital for these types of pubs that we’ll determine on a case by case basis.

“We’ve now completed both transactions and the BDMs are getting round almost every single pub. We’re forming our views of how we can work with our partners in our pubs to come up with the right investment in terms of resource and capital for each pub.”

Hawthorn Leisure, which is led by chief executive Gerry Carroll, plans a significant acquisition programme.

Substantial

Last month Carroll said the company was being offered “lots of pubs”.

May said: “There are a very substantial number of pubs in the UK that whose owners regard as either non-core or basically for sale. They are therefore not investing in them or managing them with the type of attention and resources that we plan to commit to those sort of pubs.

“We think the number of pubs that fit that description will be well in excess of 1,000, possibly as many as 2,000.”

He said the amount of capital available to Hawthorn is “sufficient” so there “would not be anything that would be too big for us to consider”, although the company would be “cautious” and will only do “smart deals”.

“We’ll continue to look at opportunities similar to the ones we’ve done. We think there are a lot out there. Almost every single pub company has got pubs that fit the description we talk about. We believe we can do deals that are attractive deals for the sellers of pub and attractive deals for us as the buyer, and especially attractive for the people who are working in and running these pubs.

“At the moment we don’t see any real cap on the amount that we can buy. But we won’t do bad deals; we will be smart and disciplined about it.”