However SFI, formerly called Surrey Free Inns, continues to prove that theory wrong. Its secret is a fleetness of foot in acquiring new sites, and a decent management team who have proved that they can make new brands work. Profit for the six months to November more than doubled to pounds 2.1m.
SFI has now given itself the ambitious target of growing the number of pubs in its portfolio by a quarter this year and next.
Given that its expansion plans are underpinned by a strong cash flow and that it already has plenty of new sites in the bag, the chances are it will achieve its goal.
Its main brand, Litten Tree, has proved a hit, attracting the full age- range of drinkers by transforming itself from a normal pub in the day to a bustling music venue at night.
The success of Bar Med, its new cafe bar concept, has prompted SFI to roll this chain out gradually around the country. For Your Eyes Only, the London table dance bar, is also pulling in the punters. Far from flogging it off, SFI now wants to open a few more.
Broker Teather & Greenwood forecasts full year profits of pounds 5.1m for the year to May and pounds 7.5m the year after, putting the shares on a prospective p/e ratio of 21, then 15. SFI's shares slipped 0.5p to 154.5p yesterday.
However, they are still sitting on a premium to the wider leisure sector, which looks deserved. But the rating leaves little room for error if some of its pub experiments flop. Hold.