Globe Pub Company, the tenanted pub company owned by Robert Tchenguiz that was securitised last May, has reported improved earnings for its latest quarter after heavy investment in the estate, writes Paul Charity.
The company, which has 444 leased pubs under management by Scottish & Newcastle Pub Enterprises, posted Ebitda of £7.4m in the quarter to 4 March this year.
The previous quarter, which ended on 3 December 2006 saw
Ebitda of £7.2m.
A total of £6.1m has been invested in 68 pubs so far this financial year - around 15% of the total estate.
A further £3m will be spent in the final quarter of its financial year.
The projected return on capital is in excess of 20% per annum.
Rent increases have been negotiated in 50 pubs, which have re-opened following refurbishment.
The number of pubs closed or let on short leases at the end of the financial quarter has been reduced to 50.
A report on the latest quarter by Globe management said: “January and February are traditionally the months with the highest number of tenancy changeovers.
“This year, 36 properties have been affected by tenancy changes and we have made short term rent concessions on 18 properties.
“This is line with our expectations. We expect to see continual improvement in underlying rental income as we convert more of the estate to longer-term leases.”
The terms of the Globe securitisation appear to allow the disposal of one pub per quarter.
In the latest quarter, the Hornseywood Tavern in North London was sold for £1.1m, a surplus of £700,000 over the debt allocated to the property.
The Globe securitised estate is made up of pubs acquired from Spirit Group, Heritage and Scottish entrepreneur Jimmy
Marr, many of which required conversion from managed to tenanted.
The latest Globe profit report reveals that over 90% of the estate has participated in a mystery shopper programme to help improve retail standards.
