Low earnings revealed
BREAKING NEWS: Risk and reward still not being delivered by Government to tenanted publicans.
Stonegate / EI Group tells the Fitch rating agency that 83% of its tenants have an expected annual income of under £20k pa whilst making over 4 times that themselves.
“according to the rateable value of each pub around 90% of the group’s L&T publicans are each eligible for £10,000- £25,000 government grants. Stonegate has also provided trade credit to aid initial re-stocking. These forms of support have provided liquidity to cover costs including re-start-up costs and pay accrued rent. Stonegate management reports that 83% of its L&T tenants received these grants, which (as represented to Fitch) amount to these publicans’ expected annual net income.” – see the full report see link at the end.
The average of the hospitality grants: is £17,500 (£10k+£25k)/ 2
EI reports from 2019 shows the Pubco made over £83,200 from each pub, the clear evidence of an 83:17 split of profit is far removed from the 50:50 profit stated in the RICS FMT / rent assessments put forward to tenants and worryingly highlights that huge numbers of RICS valuations are not upholding risk and reward fairly and are in fact delivering obscene profits to just one party the property owner. Further that the pub’s code regulator and small business minister are not delivering the transfer of profit as laid out in the Government impact study.
This is laying bare why the trade was plunged so easily into crisis back in late March – tenants are making little to no profit because the profit is not being shared fairly by a combination of rent setting and the government is failing to level the playing field (PCA etc) and ignoring the deep-seated structural issues in the trade.
It is high time that rent setting for public houses was regulated (at least) for the next 3 years
PAS
#ukpubs
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