Monday, January 4th 2010
Christmas had been a nightmare for Eb (Ebenezer) and Si (Silas) the events of Christmas Eve had somehow appeared word for word all over the Internet. How could something that represented a few moments tiredness in two cars late on Christmas Eve on the wilds of Exmoor appear on the Internet.
Both their families had been besieged by texts, phone calls and emails asking if the story was true, they both admitted that they must have fallen asleep and weirdly had the same dream.
Eb had sent his local BDM to check the pub that they thought they had stopped in, there were two pubs on the road that they had taken, the first was the Staghunter’s Inn in the middle of the village and no car park beside the river, the other was the Rockford Inn at the bottom of a steep dip with a car park beside the river. It certainly didn’t belong to either of their companies and had been a freehouse for years, the present licensee was a lady and the pub was full of residents and locals celebrating until the early hours of Christmas Day, with all the lights on, inside and out.
They had seen two very smart cars pull up, both drivers were sound asleep until the gritting lorry came past and then they drove away.
They did say that the Rockford Inn had a kindly lady ghost who appeared from time to time, she was quite slim with slightly curly, longish, blonde hair, vaguely similar to Bridget from the Beer and Pub Association.
She occasionally appeared at festive times after an excess of local cider, though some ex landlords said that cider was not essential.
Eb had phoned Si after a hastily convened Board Meeting on Monday 4th January, Si had strangely done the same, much to their respective directors amazement.
Trying to explain to some fairly hard nosed board members that they might have just got it all horribly wrong, was not easy, they were all very aware that public and establishment feelings were running against them, with a corporate policy that left no room for change without a major re construction of their ideas.
Eb took the bull by the horns, “Our financial commitments are a nightmare in a recessive market, we have falling revenues that will in all probability get worse, in a rising market our model was a success ignoring the licensee failure rate, we have regrettably considered them for too long as an expendable commodity.”
He continued, “This is no longer acceptable, we need the best operators and we need to train every operator to be the best, the estate is too large, property speculation is not the answer. We need to change from property speculation to a solid trading operation, we need to reduce the estate to under 2,000 pubs to comply with the present legislation.”
There was a stunned silence and an uneasy shuffling on chairs.
“We need to sell about 4,000 pubs, I have had discussions with our bankers and others, we offer the freeholds on all but the very best pubs to the tenants, we arrange the finance at sensible terms with a trading tie for the length of the loan with our existing suppliers, at £10 per Brewers Barrel better than they can get as a sole trader, roughly £200 per Brewers Barrel at to-days rates, they deal directly with the individual brewer and get 28 days credit, we get the remainder of our normal discount paid retrospectively one month later.”
“Likewise we will do the same with all our remaining tenants over the next year, this will immediately improve their cash flow, it will reduce our corporate overheads and simplifies the initial operation, it will be unpopular with a number of staff who will have to be made redundant. All existing BDM’s will have intensive training on advising tenants how to realistically improve their businesses including tenants that have bought their pubs using our mortgage facilities. We need to make all pubs viable, if they are not, then an alternative use has to be found. We do not consign pubs or people to the scrap heap of penury. Their profitability is our profitability, for too long we have only considered our profitability which we now realise is unsustainable in the foreseeable future.”
It sounded like someone who had discovered religion, except it wasn’t religion.
“We take a leaf out MacDonalds training book, we train everyone for at least a year in training pubs, as they used to do in this industry, if they do not meet the standard required they can leave at a weeks notice, those that do, then graduate to a quality pub that suits their ability with full information back up, BDM’s are no longer debt collectors, but serious advisers, if the BDM’s cannot do that, they are out.”
The Finance Director scribbled on his pad in front of him and raised a nervous question about short term and long term debt.
Eb continued, “The first year is going to be very tough, the Surveyors and Government recommendations will destroy the whole company, if my information is correct, rents will also be substantially reduced. We have a dinosaur of a company which will not and cannot work in a recession, it will work in an expanding market, but not in a diminishing market, the recession and effects of the recession will be with us for possibly five years. We cannot have a fire sale of pubs it will kill the market, we can sell them to the tenants and even ex tenants with the right deals as they did in the sixties. If we can set up the finance and ensure a trading deal, we raise cash and have an ongoing income, which will go a long way towards resolving short term cash flow problems, this in turn will remove a substantial amount of the major debt mountain.”
“Finally” he said, “ When we have reduced the estate to less than 2,000 pubs and I suggest 1,800 as a suitable target we buy into a number of brewers, so that we become a brewer. We also buy into every company that supplies any sort of commodity that sells in our pubs and fine tune them to supply the very best products for the industry, this will if handled properly re establish us as a major national company, receiving profit from all aspects of the industry and ensuring that our retail outlets have the best prices and trading conditions. If we can achieve this, we might consider exporting the model to other countries. On pub disposals, big is not always beautiful, we want to retain the pubs that are getting the maximum profit out of their sites, whether large or small. There are a lot of problems to overcome, but I am sure that we can overcome them, the alternatives do not bear thinking about, this is, of course highly confidential until we have a complete picture.”
The Board all agreed that if it could be achieved it was a target worth aiming for, the present course left a lot of questions which none of the Board had a clear idea what might result, the shares had dropped substantially and the City Guru’s were pushing sell to all their clients. For the first time for a year a positive feeling started emerging and a sense of direction, there had been considerable threats of a shareholders revolt, a major trade union had found a legal loophole that tenants could go on strike legally for up to twelve weeks which posed a very imminent threat to their already fragile cash flow caused by the recession and other issues.
A smaller diverse company sounded a far better prospect than one that was trapped between bankers, shareholders and very disgruntled tenants, who they now realised were the source of their lifeblood, money.
Eb call to Si, did not discuss the Board Meeting, but strangely the content of both Board meetings was exactly the same, since neither wished to discuss confidential matters.
There was a call from Bridget at the Beer and Pub Association saying that someone or something had written in spidery Copper Plate in her diary everything that had been put out on the Internet, she had no idea how it got there and all the staff were incapable of using such writing without a mistake, the whole thing was totally spooky.
Eb had that feeling that someone had just walked over his grave again, he decided that whatever it cost he would make the company into one where everyone was part of large team and proud to be involved, he definitely did not want anymore Christmas Nightmares like Christmas Eve.
Note:- The description of the Ghost that supposedly haunts the Rockford Inn is correct.
Edited from Bridget’s latest Diary January 2010
Sadly “Nothing has Changed”, but it made a good story, even if it didn’t make any difference