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Thu 5th Jul 2018 - Wet-led operators on radar of more investors, Greene King office restructure
BDO – attractive returns to put wet-led operators on radar of more investors in next 12 months: Wet-led pub operators are expected to be on the radar of investors in the next 12 months as more take note of the attractive returns available in the sector, according to a new report. BDO mergers and acquisitions director Tom Barnard has predicted groups such as ETM, Drake & Morgan, New World Trading Company, The Alchemist, and Brewhouse & Kitchen are all likely to receive “regular knocks on the door”. Similarly, operators such as White Brasserie Co, Peach Pub Company, Upham Group, Oakman Inns and Restaurants, and Seafood Pub Company were also likely to be “on the radar for investors”. Looking ahead to the next 12 months in the latest BDO restaurants and bars report, he said: “High-quality pub businesses are always in demand due to the strong returns available when groups get it right. A clear difference in the pub sector compared with the casual dining world is the existence of a much broader and varied trade buyer pool, which provides for a number of merger and acquisitions strategies. The large and regional brewers are all likely to be in action looking to further boost their distribution capability through acquisition, with mergers and acquisitions likely centred on acquiring quality freeholds in geographically appropriate areas. Fuller’s, BrewDog and Young’s have all actively acquired or made positive statements about their appetite. BrewDog had been rumoured to be running the rule over numerous London pub groups in an attempt to grow its distribution capability before settling on Draft House. Watch out for further acquisitions from the “Punks” over the next 12 months. We expect well-capitalised groups such as City Pub Co; Vine Acquisitions, backed by Patron; and Stonegate, backed by TDR, to continue actively looking to acquire in the space to deliver growth for their investors. Equally, there continues to be strong private equity interest in the sector for quality operators with differentiated propositions who are able to demonstrate the ability to scale and deliver strong returns. There are a number of exciting, fast-growing managed pub and bar groups that are likely to be on investors’ radars over the next 12 to 18 months, presenting the possibility of a wave of consolidation in the managed pub arena. Well-known groups such as ETM, Drake & Morgan, NWTC, The Alchemist, and Brewhouse & Kitchen are all likely to receive regular knocks on the door. Similarly, strong operators such as White Brasserie Co, Peach Pub Company, Upham Group, Oakman Inns and Restaurants, and Seafood Pub Company are also likely to be on the radar for investors given their high-quality, authentic pub offerings. Moving into the summer, the improved weather and a prolonged England World Cup campaign should hopefully provide strong trading conditions for many pub businesses.”

Greene King plans 100 redundancies, 25 jobs created: Brewer and retailer Greene King has announced a proposed restructure of its office teams based in Bury St Edmunds and Burton-upon-Trent. It is understood about 100 roles in total are at risk across the two locations, although 25 roles will be created as part of the proposal in addition to vacancies available. A Greene King spokesman said: “The industry in which we operate is facing considerable cost pressures – and we are not immune. We need to focus on supporting our pubs and believe the proposed structure will deliver a simpler, more effective way of working and at the same time reduce costs. We are working hard to minimise the number of redundancies and are supporting any colleague who is at risk of redundancy by trying to find an alternative role in the business. This decision has not been taken lightly but is critical to ensure Greene King is sustainable and fit for the future.”

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