ALE May 1999 No. 294

Pubco News

It takes about six years to recoup the cost of a typical 1990s refurbishment, yet chains are changing themes more rapidly than that. The Good Beer Guide 1999 quotes the estimate that 22p/pint or 86% of chain profits go to refurbs. Perhaps these facts indicate the true reason for "traditional" or "community" pubs being back in favour rather than expensive marketing-led faddish themes. Apparently 6% of pubs have switched from being managed to tenanted in the last two years.
[See Back to Basics - The Pub, part 1.]

J.D. Wetherspoon has at last gained planning permission for Frinton's first ever pub since the place was founded 100 years ago. JDW's promises reportedly convinced the Tendring councillors to ignore the advice of their officers that they should reject the plans for a former ironmongers. Meanwhile JDW's third outlet in Norwich, the Regal Cinema, is under way, just as in Cambridge. At least one City financial pundit reckons that JDW will have two more years of growth and then slow down and thus recommends investors to sell up now while the share price is high!
[Source: The Independent's Sharewatch column on 24/3/99 quoting Charterhouse Securities.]

Enterprise Inns have abandoned their bid for Inn Business and instead have acquired Century Inns for around 80M in what's said to be the fastest hostile takeover of all time - 8 hours! Century were in the process of reforming their Tap & Spile chain, selling some off, converting others to tenancies and allowing them to revert to their previous names. Since Enterprise is entirely tenanted, most of the 90 managed Century pubs (including 45 T&S ones) are likely to be sold.

Allied Domecq is disappointed with the group's 292M profit before tax. Its Firkin chain is to be revamped and made more "female-friendly", away from youth culture and with higher(!) standards. Some may be de-branded.
[Sources: Publican 22/2/99; Licensee & Morning Advertiser 3/5/99]

[Follow-up: ALE 296].

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