One step forward, two steps back...

Publicans have a lot to thank MPs for recently... instigating the consultation into regulating the dreaded pubcos, scrapping the beer duty escalator (even though they introduced it in the first place) ... but some of them really haven't got a clue as reported in Chin Chin ...

Now I Truly Know I'm Living In A World Gone Completely Bonkers ...

Nice to know where our tax pounds are going, eh?

  

I should imagine the thousands of tied tenants subsisting on less than £15,000 a year (that's after working their proverbial tits off) must wonder why they bother ...

Pots, Kettles, Carbonisation and NuMPties ...

Cover image of the Report of the Health Select Committee Report -July 19th 2012

I am grateful to the former group editor of the Publican's Morning Advertiser, Paul Charity, for reminding me of the on-going hypocrisy of the nu-MP-ties in Westminster.


In his most informative daily Propel Newsletter, he reports that:

"Midlands MP condemns booze culture in the House of Commons: MP Aidan Burley has called for an end to the “boozing, alcoholic culture” of the House of Commons. He claimed excessive drinking was encouraged by late working hours that meant MPs had to sit around waiting to take part in votes. He told The Commons: “We have a problem: the late-night, boozing, alcoholic culture of this place. That is something that is made worse by having to wait around until ten o’clock to vote.”

... and opines thus:

"It’s an irony that Health Select Committee MPs are set to condemn progress by the alcohol industry in reducing excessive drinking when there’s clearly such a problem with excessive drinking among MPs themselves. Perhaps this has blinded them to the realty – drinking is reducing year-by-year in the UK but cultural norms, including a tendency to rapid drinking in this country, take a long time to re-shape, not least among middle class types working long hours in Westminster."

Surely this can't still be the case after the Speaker, John Bercow, who chairs the House of Commons Commission, the body that runs the facilities of the Commons, promulgated this at the end of April in the wake of the Eric Joyce debacle (remember the hard-drinking, Tory-head-butting nu-MP-ty for Falkirk?) : 

Alcohol policy

The Commission takes its responsibility for the welfare of those who work on the Commons Estate very seriously. Following careful consideration of the issues around alcohol consumption it agreed the following actions to promote responsible alcohol use:

· a wider range of non-alcoholic drinks and lower strength beers will be provided in catering outlets

· staff serving alcohol would receive further training and support in refusing to serve customers when necessary

· at receptions and events where alcohol was served, glasses would be topped up less frequently

· further promotion of the support available to Members and House staff by the occupational health service and the Speaker's Chaplain

· consultation to take place with the Administration Committee, the House of Lords and the Sports and Social club on the opening hours of bars on the Parliamentary Estate

... and that, folks, is what passes as a "policy" ... "further training for staff" - what, like publicans have to undertake on the basic principles of licensing law (oh, forgot Parliament only makes laws for the rest of us not themselves) ... "topped up less" - bet they'd put their hands over their collective glasses if they really had to pay for it ... which brings me on to pricing, the Commission noted that significant price increases had occurred in recent years and that bar prices were now comparable to high street pubs, not that there was much evidence of this in January when prices certainly seemed to be "deeply discounted" but perhaps things have changed since then ...

This hand-wringing, cringe-worthy display of two-faced-ness by the nuMPties puts me in mind of Grandma's admonition to us when we questioned some of her more illogical promulgations : "Do as I say, not do as I do".

This, of course, from the members-only club that brought you financial melt-downs, nose-in-the-trough expenses scandals, any number of "omni-shambles", Olympic-gate, the beer-duty escalator ... who continue to refuse to get tough with the off-trade by means of existing licensing law but will no doubt introduce minimum pricing as part of their continued tax-raids on the hospitality industry ... whilst axing august bodies such as the Alcohol Education Research Council that inform and educate on responsible drinking -get real purleeeeese!

(Today's piece has been brought to you by The Hyphen Corporation - bringing you "Joined - Up - Thinking",  for the 21st Century, a sub-division of Ellipsis plc ... "Need We Say More?")

And the winner is ...

And the winner is ...

As reported in the Publican's Morning Advertiser  Daniel Thwaites has very generously set a "target" for all their tenants to have an "earnings floor" of £15,000 per annum.

I thought I'd do the math on that one in light of my most recent experience at the "coal face" of the British hospitality industry.

Let's start with the myriad duties the average publican has: cooking, cleaning, serving, banking, book-keeping, training, marketing, more cleaning ...


This was my daily schedule in my last tied pub:

Monday - let staff in from 8.00 am, admin 8.30 am to 12.30 pm , 12.30 pm to 1.30pm senior staff briefings and cellar checks - rest of day and evening off - lock up at 12.30 am - total hours worked = 6

Tuesday - let staff in from 8.00 am, admin 8.30 to 9.30, kitchen 10 am to 3 pm, then again 5 pm to 10 pm, bar 10.30 to 11.30 pm, locking up again at 12.30 am - hours worked = 14

Wednesday - see in delivery at 7.00 am, then follow Tuesday pattern - hours worked = 15 (oh and check wet stock order prepared by staff for Friday delivery)

Thursday - see in delivery at 7.00 am, let staff in  at 8.00 am, admin 8.30 to 9.30, food stock check and order preparation for Friday delivery 10.00 to 11.30 am, bar 12 noon to 3 pm, then again from 7 pm to 12 midnight, lock up at 1.30 am - hours worked = 14

Friday - see in deliveries at 7.00 am, let staff in at 8.00 am, admin 8.30 to 11.30 (including AWP machine collections and change order preparation and collection) bar 12 noon to 3 pm, then again 5 pm to 12 midnight, lock up at 1.30 am (if no private function - try 2.30 am if there was one) hours worked = 16-17

Saturday - let staff in at 8.00 am, admin 8.30 to 11.30 (change order preparation and collection) bar 12 noon to 3 pm, then again 5 pm to 12 midnight, lock up at 1.30 am (if no private function - try 2.30 am if there was one) hours worked = 16-17

Sunday - let staff in 8.00 am, admin 8.30 am to 9.30 am, kitchen 10 to 4pm, then again 6pm to 9pm, then off until lock up at 12.30 am hours worked = 11.5

Total hours worked = 92.5 hours per week (minimum).

Three week's unpaid holiday a year (if I could afford either the time or the money) mostly taken as long weekends and never more than 7 days at a time. (Deduct any stock shortages and staff overtime from normal gross profit on these occasions)

Total hours worked per annum = 4,532.5.

At a minimum of £15,000 as mooted by Daniel Thwaites as their "tenant earnings floor" = £3.03 per hour. Even if you add back in the supposed benefits of living over the "shop", say at a very generous £10,000 per annum, this still only works out at £5.51.

Daniel Thwaites - National Minimum Wage is £6.08 per hour - and I can assure you that every publican in the country (and certainly in your tenanted estate) is worth more than minimum wage for their professional management of yours (and others') assets.

Try putting an earnings floor in of £45,000 - which is probably the amount your area managers earn - and you might get nearer the mark - especially when you consider the following, from their company report:

EBITDA (profit before tax etc) on 355 pubs, hotels and inns per outlet = £61,126 (so a nice earnings ratio to your "tenant earnings floor" of roughly 4:1)

£4.6 millions in "deferred tax" - down from last year's £6.1 millions though due to "tax loss" of £1.4 millions (very careless chaps!)

Now the juicy bit all you lucky Daniel Thwaites tenants on your £15,000 "earnings floor" :

 

The board paid themselves a very restrained £924,000 (as opposed to the £1,508,800 in 2011)

Highest (un-named) paid director received £345,000 - including £99,000 relocation expenses ... hmmm anyone want to "relocate" to his/her job? Can't see that anonymous director getting out of bed for more than 2.5 weeks per year at your "tenant earnings floor" rate.

Shareholders didn't do too well in 2012 either ... a loss per share of 13 pence ... nice one considering it was 8.6 pence the previous year! (Might you be questioning their remunerations this year?)

Stopped laughing yet? If you need a real laugh check out the self-serving bollocks from Daniel Thwaites when you click on the "Publican Awards 2012" button!

Come on Daniel Thwaites, get real ... if you're going to have a "floor" then make it one that is at least at minimum wage ... for a publican doing, say, 80 hours a week (sometimes a couple doing twice that) this would mean a minimum "tenant earnings floor" of £25,000 for a singleton and £50,000 for a couple ... you mean sods!

If not then keep your mean-spirited calculations to yourselves whilst you sit back and earn a fortune off the back of hard-pressed, hard-working tenants ... because we just don't want to listen to any more fat-cat bullshit ... we get enough of that from the numpties in Westminster and the crooks in The City.

A distraction from filling out your tax return ...

As many of you approach the deadline for filing your tax returns and the realisation of exactly how much profit (or loss) you made last year I thought I would share with you some extracts from the company report for Punch and for your convenience have worked out a few figures for you to digest whilst you work out how to pay your tax bill.

If you are one of the 2,000 pubs in the "turnaround" division of Punch (i.e. "non-core "or non-essential to the long term plans of company) this is Punch's stated policy from the company report:

"The plan for the turnaround division is to maximise short-term returns with a clear focus on costs and cash flow. It is expected that these pubs will be disposed of over a five-year period and will be phased to ensure a balance between speed of disposal and value. "

From the accounts published in the report  the EBITDA  (operating profit) the following figures can be calculated.  For those of you in "turnaround" the earnings per pub was  £33,122, from core pubs the amount per pub was £73,873 .The average per  pub (for all of Punch's pubs)  was £51,558.

Now look at your tax return.

Whilst you compare your EBITDA with the company's here is some more interesting reading from the report:

"Punch as a Group achieved 21st place in the Sunday Times Best Big Companies to Work For 2011, the only major pub company to be listed. This is a fantastic achievement and reflects our commitment to develop our team and our Company culture to make us a ‘Great Place to Work’. We were rated highly for open and honest communication from managers, staff feeling they could make a contribution to the success of the Company and teams being fun to work with, as well as being nominated for a special award for wellbeing."

How open and honest were your communications from Punch last year? Do you think it's fun being a Punch tenant/lessee? Are you bathed in the glow of "wellbeing" emanating from Burton on Trent?

And whilst they were all feeling so well and having fun here's some details from the Remuneration Report for Directors:

CEO Roger Whiteside earns a base salary of £430k, plus a chance to earn  250% in bonus (1/3rd in shares) and a contribution to his pension pot of 25% of his salary.

The total Roger got last year, including all benefits and bonus  was £931,000

The total all the 12 directors earned from Punch last year was £3,363,000, an increase from £2,432,000 in 2010.This means a total increase in their remuneration packages of 38%, with average pay of £280,000 a year.

Now look at your tax return again.

Picked yourself up off the floor yet? Now work out if the profit you made from your pub increased by 38% last year or were you able to give your staff a wage increase of 38% last year?

For those of you that have invested in Punch let's also have a quick look at how your investment performed from 2006 to 2011 compared to FTSE indices:

I know it's a bit blurry, but the orange line is Punch, the other to look at is the grey line which shows the Travel and Leisure sector's performance and shows that for a nominal £100 what your 2006 investment was worth in 2011. Bet that investment is looking just dandy now isn’t it?

Now over to Solihull for news from Enterprise. They report, for October 2011, an EBITDA of £366 millions, which means they earned £58,196 per pub.

From £500 millions of sales of beers, wines and spirits they made £200 millions of gross profit, not bad for just sitting there taking orders.

On the £198 millions of rent they collected (average per pub £31,483) they spent out £5 millions on repairs and maintenance (average £795 per pub) or just 2.5%.  Measure this against a total revenue of some £711 millions and it is just 0.7%! Compare that to the ALMR Benchmark Report (October 2011) on the running costs of a pub which puts average spend on premises repairs by pub operators at 5.6%

Look at your profit and loss account and I'll wager you spent out more than £795 on repairing and maintaning their assets (your pub) last year. 

And the directors? Nine of them, in total, earned £3,070,000 or on average £341,111 down 3.6%  on the previous year. Mind you they did increase their earnings from £2,240,000 in 2009 to £3,185,000 in 2010 which was an increase of £945,000 or 42%.

Ted Tuppen the Enterprise CEO still managed to claw in a staggering £910,00 in 2011 and £1.223 million in 2010;

So how did Enterprise investors fair compared to the market places then? Take a look at the graph below:

Not much better than Punch's poor benighted investors.

At least the Enterprise Annual Report spares us the PR waffle and cuddly graphics so prevalent in the Punch document.

Inevitably I am, again, drawn to the definition of zombie: “the body of a dead person given the semblance of life, but mute and will-less, by a supernatural force, usually for some evil purpose”  when I read these reports.

And you wonder why the likes of Vince Cable want to introduce shareholder vetoes on board salaries or wonder why the BIS committee in the Commons queries if tenants and lessees are getting a fair deal from pubcos? Not!

How to make sure your pub is attractive to your local MP ...

According to a report in today's Telegraph you'd better make sure of the following things:

House of Commons Dining Room

Don't charge more than £2.60 a pint (this against the average national price of £2.90 according to Pint Price . com or the eye-watering price of £3.50 other London drinkers pay) 

Don't charge more than £4.15 for pan-fried red mullet with carrot purée and a soft boiled quail’s egg or serve Artichoke and tomato salad with truffle dressing for more than £2.05 (the cost of those meals in the House of Commons dining rooms).

Make sure you serve your chips in a tower so the chips don't go soggy and heaven help you if you charge more than £2.35 for a glass of Merlot.

Numpties

All this sage advice, of course, if you want to make sure your pub is full of whingeing, self-serving numpties who really have lost touch with life in the real world ... wonder how much their £5,8 million subsidy to their catering would have bought in the real world ... maybe it's time to ask your MP if "we're all in this together" still?

(Just as a matter of interest according to Horse and Hounds £5.8 million would buy Fermyn Woods Hall the home of the Brigstock Horse Trials)