Brent Walker puts off sale

City indifference delays disposal of pub chain

Betting to pubs group Brent Walker has been forced to delay the planned flotation or sale of its Pubmaster business until spring 1997 at the earliest.

The company had previously indicated a sale might have been on the cards for this summer, and the decision reflects diminishing enthusiasm in the City over the growth potential of the business.

However, investors will be reassured that Brighton Marina and Cardiff Arena will be sold for pounds 15m within "the next two to three months", according to chief executive, John Leach.

He said the two property businesses were insignificant in the context of BW's pounds 1.4bn of debt, although a deal will conclude the long search for buyers that began in 1992 following the fall from grace of Brent Walker's founder, George Walker, and the company he built up through the 1980s.

But regarding progress on the 1,500-plus Pubmaster chain, Mr Leach said: "We have to decide on the best exit route for our stakeholders - banks and shareholders." Lazards, the merchant bank, has been appointed to handle the sale.

The sale of Brighton Marina and Cardiff Arena will leave Brent Walker with only a small stores development site in Hackney, which is awaiting the outcome of a planning inquiry, outside its two main assets - betting chain William Hill and the Pubmaster business.

Last week, the company wrote down the value of its Pubmaster estate by pounds 17.9m to pounds 140m. Operating profits, however, rose to pounds 16.3m from pounds 13.3m, on turnover slightly ahead at pounds 92.9m.

Analysts see Pubmaster as a predominantly tenanted chain at the lower end of the investment spectrum. Several pub businesses have obtained stock market quotations recently, but there is a distinct split between the prospects of managed pub estates and tenanted pubs. The former, epitomised by the likes of Tom Cobleigh and Wetherspoon, generally have ratings to match investors' high hopes. Tenanted pub businesses, by contrast, have lower ratings, reflect- ing the predominantly cash-driven nature of the business. The company owns the freehold, but leases its pubs to self-employed managers. Other than rent, profit comes on the margin from supplying the pubs with beer, bought at a substantial discount from the brewer. Last year, Pubmaster had 94 managed pubs and 1,659 tenanted pubs.

Analyst Charles Winston, of stockbroker BZW, said: "Pubmaster is in a cleft stick. It needs a high price for the business to use the proceeds to maximum effect but can't raise the money because of the low multiple tenanted businesses sell at." He added that a burden of proof remained on Pubmaster's management.

Last week's figures also revealed a huge write-down of the value of the William Hill betting chain, by pounds 267.9m to pounds 427.9m. Some analysts speculated it heralded the imminent sale of the business, for up to pounds 450m, with Bass and Ladbroke in the frame as likely buyers. But any such move would entail a huge dilution for shareholders, as remaining assets would be insufficient to service bank debt.

The write-down reflected the impact of the National Lottery, and William Hill's ongoing legal battles with Grand Metropolitan, which sold the chain for pounds 685m in 1989.

Mr Leach said matters were improving slowly at the business. In the last three months it has introduced spread betting on big sports events, where punters bet on the margin of a victory.

Start your day with The Independent, sign up for daily news emails
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss