The York pub, Broomhill - now closed - what is going to happen to it?

[Tony 10]

the profit margin is correct (based on our costs at the time)...even so, after considerable number crunching and surveyors/planning, it was not worth the long term investment required to bring the remainder of the building up to scratch, inc the derelict 2nd floor, a huge scale investment given its size. ......it was easier and cheaper to dispose of it and let someone else inherit the restoration costs, which even if done at a BASIC level, is going to cost hundreds of thousands.....there are easier ways to make money!

 

You mean that YOU couldn't make it work. Most publicans would murder for a 68% GP. All the PubCo care about is that the rent comes in and that beer gets paid for and that's down to you.

 

So what went wrong? Why couldn't you make it work at 68%GP?

[goldenfleece 11]

You mean that YOU couldn't make it work. Most publicans would murder for a 68% GP. All the PubCo care about is that the rent comes in and that beer gets paid for and that's down to you.

 

So what went wrong? Why couldn't you make it work at 68%GP?

 

as with MANY pubs, the premises is worth far more as real estate than as a pub business......

[Tony 10]

Not if you are paying your rent which should have been quite sizeable if you were doing that turnover at that GP. PubCo's want your rent receipts and ongoing profits, not a one off capital receipt and a tax bill.

 

So at the risk of repeating myself, what went wrong?

[jongo 10]

I am confused with this thread

I cant understand why a brewery, company, landlord, businessman etc, would sell a pub that is turning over half a million quid a year and running at a 68% GP

I am sure that there are very few pubs making this much money these days

[Number Six 10]

Not if you are paying your rent which should have been quite sizeable if you were doing that turnover at that GP. PubCo's want your rent receipts and ongoing profits, not a one off capital receipt and a tax bill.

 

You seem determined that there is a hidden story here.

 

If I had debts of £3.3 billion, I reckon I'd go for a one off lump sum if it were offered, especially if I was operating in a declining market.

 

Punch Taverns (PUB) has warned that profits will be hit after reporting a fall in sales at its managed pubs in the past four months.

 

The company, which has a net debt of £3.3billion, said that looming VAT rises and the continuing affect on trade of the recession were taking their toll.

 

The company offloaded 352 pubs over the period - netting £127 million in a bid to reduce its debt.

[Tony 10]

Perhaps you don't understand what PubCo's are or what they do? They are property rental portoliios that have a sideline in overpriced whoesale beer. That's it. They don't sell performing assets because then there would be no business.

 

So, unless there was something exceptional we can conclude that something wasn't performing. I have no idea if there is a hidden story, but something doesn't add up if the tenant was turning £10k pw at 68% GP.

[goldenfleece 11]

pub companies are selling off their real estate by the truckload...even profitable sites are going to the highest freehold bidders......the pub companies need quick fix cash injections, the long term is not of interest at the present time with the ongoing decline of the british pub......Punch owe 600 million for example, the interest alone on that would be massive......

[Stopfordian 10]

We were in the process of stripping the place of all F and F before the deadline day...there was a great deal to do.....we were actually only informed of the actual handover day a very short time before, so time was precious to get the business fully wrapped up and boxed.

 

When I went in a couple of months ago there was no packing up,the barstaff were busy writing more blackboards with more offers and deals and am I right that you were trying to get rid of the york on this forum due to you moving away or was it just a ploy to get shut because the business failed?

[goldenfleece 11]

When I went in a couple of months ago there was no packing up,the barstaff were busy writing more blackboards with more offers and deals and am I right that you were trying to get rid of the york on this forum due to you moving away or was it just a ploy to get shut because the business failed?

 

neither.try again. why not read the threads? The PUB CO received out of the blue an offer for the freehold, and made us an offer we could not refuse to acquire back the 10 year lease from us so the freehold sale could complete. Thats it! It was in both our interests to complete the deal.

[gnikojm'i 10]

neither.try again. why not read the threads? The PUB CO received out of the blue an offer for the freehold, and made us an offer we could not refuse to acquire back the 10 year lease from us so the freehold sale could complete. Thats it! It was in both our interests to complete the deal.

 

neither!? i remember reading months ago that you were selling due to moving down south!

[goldenfleece 11]

neither!? i remember reading months ago that you were selling due to moving down south!

 

that was a plan at one time, but based purely on re-location and nothing else.

 

All that has happened is that the building was sold, and we were strongly encouraged to do a deal with the Pub Co re our valuable 10 yr lease as it was wanted with full vacant possession by the student property company who now own it. The business did not fail, it was terminated by us so all parties could benefit from the deal mutually. Money talks. In this day and age, nothing else does. Shame, but that's the way things are.

[Number Six 10]

Perhaps you don't understand what PubCo's are or what they do? They are property rental portoliios that have a sideline in overpriced whoesale beer. That's it. They don't sell performing assets because then there would be no business.

 

So, unless there was something exceptional we can conclude that something wasn't performing. I have no idea if there is a hidden story, but something doesn't add up if the tenant was turning £10k pw at 68% GP.

 

Perhaps I am the sort of person who, despite evidence to the contrary, knows nothing, and has no means of finding anything out?

 

Companies exist, largely, to make money in order to keep their shareholders happy. This tends to make them rather short-termist. If the short term interest of the company are best served by selling an asset, it will be sold. Especially when the company is mired in debt.

 

A pub comapny with a few assets and no debt is better placed to push on than one with lots of assets and lots of debt - especially as I would suggest that the value of those assets (pubs) is falling due to the changing nature of the way people spend their leisure time.

 

I don't think you can make any conclusion from the very limited information you have, much as you seem convinced you can. 68% gross profit for the landlord sounds great, if indeed that is what they were taking, but you don't know what the net profit was. I suspect the pub company took a fair old chunk in rent, the council an similarly sized chunk in rates, the VAT man would have had 15%, the insurance would have accounted for a bit, I guess heating a place the size of The York costs a fair bit, the staff I suppose wanted paying - the costs would be large. I suspect the net profit margin to have been much, much lower.