Firkin founder to float new London pubs chain

David Bruce, the entrepreneur who set up the Firkin brewery chain, yesterday announced plans to float his current pubs business.

Capital Pub Company, which owns 13 freehold pubs in London and is worth around £16m, plans to list on the Alternative Investment Market in 2006.

Clive Watson, who set up Capital Pub Company with Mr Bruce, said: "The pubs market had become very branded and there were too many on the high street. Most of the brands were boring, so we wanted to set up a pub company that kept the individuality of the original pub." Mr Watson is a former finance director of Regent Inns and a founder of Tupp Inns.

CPC was set up in 2001 as an Enterprise Investment Scheme (EIS), a vehicle to help start-up businesses raise funds by giving lucrative tax breaks to investors. It raised £15.4m, which was used to buy 13 pubs including, in London, the Anglesea Arms in Kensington and the Square Pig in Holborn.

While a number of pubs companies in the high street sector have been suffering from a price war amid bitter competition, CPC yesterday announced that it had seen record results for the year ending 27 March.

Turnover was up 61 per cent to £6.7m, and profits before tax more than tripled to £668,000. "All our pubs are different and are unbranded. We allow our managers a high degree of autonomy - we use our buying power to get good wholesale prices, but they choose what they stock from our list," Mr Watson said. "We will be floating to provide liquidity to our shareholders and we will be using the opportunity to raise more capital."

Under Inland Revenue rules, EIS schemes can raise no more than £16m, so to keep growing the business, Mr Bruce and Mr Watson set up another EIS, Capital Pub Company 2.

CPC provides management services for the properties bought with CPC2 funds.

It launched in January and yesterday said that it had raised £4m.