This morning’s newswire brings the sad and sorry tale that Punch Taverns may soon be no more! Now I cannot fathom how a company worth circa £430m can be facing insolvency, winding up orders, mass sell off’s etc; after all, they ARE the country’s largest pubco. (writer goes for breakfast to contemplate reasons for this dire announcement)
Well folks, you will be glad to know that breakfast has worked a treat and brain is rejuvenated.
It must be something to do with the share prices being at a massive £00.66.2p on Friday (close of play) having reached a miserable £13.68p on June 30th, 2007, I mean to say, how can anyone snatch such a fantastic financial defeat from such an absolute victory – as stood, on June 30th, 2007? How can any company strive so hard to devalue itself in such short time-yet certain ex directors cream off £millions in wages, profit schemes & bonuses! More pertinent a question is how can any shareholder have wanted to keep their shares after June 30th, 2007? Remarkable how Mr Giles Thorley suddenly decided he ‘needed new challenges’!
I have never been into ‘playing the markets’ as stocks & shares are known. I can understand anyone having a few quid on a horse as it simply runs from A to B, hopefully faster than the others but to invest in the ‘markets’ to me is a form of suicide-unless your best mate is an ‘insider trader’ (funnily enough there was a racehorse named exactly that!)
A very good friend of mine held a thousand shares in Punch Taverns at one time but, although a non-smoker, was dubious about the effects of the new strategy of clean air pubs. He was advised to sell every single share two weeks before the ban came into force as I could see no merit in pubs being smoke free. It wasn’t too long before I received a free night on the ale as shares began to tumble. but Punch weren’t on their own with this state of affairs!
Arch rival, Enterprise Inns, led by ‘2 ton Ted from Teddington’ (Mr Ted Tuppen) were also finding the pub trade spiralling against them as shares fell with comparative ease. Note here that both of these companies were built on what is known as the “Ponzi Scheme“-a bit like building your house on a base of sand, it’s matter of when it falls down! Basically, as your company grows bigger and bigger you borrow more against that which you utilise to earn from but do not actually own-hence, Punch have a valuation of £430m but are actually more than £3bn (yes, billion) according to the last annual report. Punch were a lot more in debt but have sold off numerous outlets to reduce debt. However, the point is that if they sold every stick of furniture AND the Managing Director, they would not be out of debt! Thinking about it, nobody would make an offer for the MD having watched him decapitalise a flourishing business to this extent in nearly 4 years, so we’ll leave him on the shelf methinks.
As you have realised by now the SMOKING BAN has destroyed our hospitality sector-bigtime. Punch & Enterprise were consulted about this matter pre-ban but went along with it as they considered that it would be a level playing field. They were both concerned that if some pubs were allowed to be smoking pubs they might be forced to close some parts of their estates-what a laugh that is!
They never considered ‘landlocked’ pubs, did they?
They never considered ‘music’ pubs, did they?
They never considered licensees either-did they?
All they were bothered about was maintaining their own wage packets and standards of living. Had they considered, between them even, any of the above then quite possibly we would not have a total smoking ban and the death of so much of our cultural heritage. We have pubs that have hailed from the coaching days that have survived wars, plagues, pestilence and extreme times of poverty-but nothing can withstand the ravages of a smoking ban!
It is very noticeable that as times have got harder, pubcos have not lessened their rental structures, they have not lessened their barrelage charges, they have not relaxed their financial grip on anything really, yet they expect licensees to keep finding money that is not there.
The one thing the smoking ban did do that was/is good is to show these ‘Ponzi Scheme’ companies up for what they truly are-Greedy B******s who care not a jot for their tenants’ wellbeing. I have met a lovely lady who lost her life’s savings in her ‘seaside dream’ (approx £200,000). I have met a lovely, homely couple who sold their property to run a community pub until their retirement-another £90K + gone to the pubcos and so it goes on. Both Punch & Enterprise stated they had set aside £millions to help struggling pubs-what a load of crap that appears to be for I haven’t seen any such help to any licensee. What I have seen are pubs closing without the ‘management (licensee) even knowing!
What I have seen is damn good boozers flogged off to the developers as they get a good price from such people!
What I have seen is the steady stream of ‘would be tenants’ drying up as people finally realise just how much damage smoke bans do to businesses and economies. I think even Ted Tuppen has run out of ‘mugs’ by this time.
I feel extremely sorry for licensee tenants for they are living day to day on a knife edge, but why have they never got off their backsides to fight this woefully inept law? Licensees not tied to pubcos-why have you not made a stand against this socially divisive law? It is far too late in the game to worry about personal costs now, you need to act.
The French soon take to the streets when they are not happy, the Egyptians have certainly found fire from ‘somewhere within’, but what do our lot do? sit and have a cup of tea! Nero fiddled (apparently) while Rome burned, are we going to sit and drink tea while our pubs & clubs burn (close)?
From a personal point, no view I care not a jot if Punch Taverns & Enterprise Inns end up out of business & bankrupt for they have created this situation themselves through petty bickering, greed and attempted ‘oneupmanship’. They should be sued by all licensees (past and present) for complete negligence but I suppose ‘we will drink tea’ instead.
For the licensees & club owners I have sympathy, but for God’s sake make a stand. Show some balls, don’t be walked all over like some rag doll.
We’ve lost 7,000 + so far-how many more before you do react?