Thistle Pub Company II (TPCII) and Thistle Pub Company III (TPCIII ) – two Enterprise Investment Schemes (EIS) set up by the Maclay Group, are likely to be among the group’s creditors. According to letters sent to shareholders Thistle II is owned £150K while Thistle III is owned £330K.
According to the newly appointed administrators of the Maclay Group, EY, “It’s still the relatively early stages of the appointment and the administrators are currently forming a full picture of Maclay’s financial position – this includes collating a list of creditors. Maclay had contractual agreements in place with TPCII and TPCIII, so it stands to reason that one or both companies might be among those who believe they are owed money.”
The schemes were set up by the Maclay Group to raise money to buy pubs, under the Enterprise Investment Scheme (EIS) initiative, which offered investors income tax relief (at the time up to 20%) on their initial investments, in return for backing smaller companies.
TPCII was set up in 2004 and owns four freehold pubs, which were transferred to LT Pub Management last August, while TPCIII was set up in 2006 and owns seven pubs including The Clockwork Beer Company in Glasgow, and the Dog House in Balloch. They transferred to LT Pub Management when Maclays went into administration.
The original promotor who also administered the funds was Brewin Dolphin, whose Director of Corporate Finance was Alan Stewart. At the time investors were told that the intention was that “the fund will have exited all of its investments within six years, distributing the proceeds by its sixth anniversary.” But as one investor explained, “I invested £25K in 2004, and was told in a brochure I could pull out my cash in 2010.” However he failed to get his cash back, and also found it difficult to get an up to date value on his investment. At the time TPCII revealed that it could be difficult to sell shares in schemes such as this and that investments may not perform as well as expected. It told a newspaper, “this scheme was high risk and investors are sent annual performance updates.”
Both funds have been administered by Cenkos Securities since 2009/2010 when Alan Stewart, now Chairman of TPCIII, joined Cenkos firm. He has told investors recently that every step will be taken to ensure the £330K it believes it is due from Maclays will be recovered.
An industry expert told DRAM, “EIS funds are generally regarded as ‘Unregulated Collective Investment Schemes,’ (UCIS) , and as such are high risk mainly because you are investing in one company. In addition, as the investments are private equity, then anything to do with private equity is generally higher risk. They are normally only for professional investors or high net value individuals. The tax concessions are there to encourage such people to invest in growth companies, that otherwise might find it difficult to get investment. But unfortunately this also means that any losses have to be taken on the chin, although they can be written off against income tax.”
Acquisitive pub companies are already eyeing up the assets of the Maclay Group who went into administration at the end of January. At the time the directors of Maclay Group plc issued a statement saying that they had failed to ‘find a strategic solution to financial pressures facing the business.’
As a result the company appointed Ernst & Young (EY), and Colin Dempster and Gavin Yuill took on joint-administration duties. Almost immediately EY confirmed that it has already had a “number of expressions of interest.”
Despite managing 28 pubs, only 15 were in direct ownership, the remaining 13 pubs are managed properties.
Gavin Yuill said, “Faced with an unexpected funding requirement, the directors of Maclay Group plc and its trading subsidiary Maclay Inns Ltd decided to call in administrators to protect the business and safeguard jobs.”
He continued, “The contract for seven managed properties immediately transferred to LT Pub Management. EY will continue to trade the fifteen properties owned by Maclay Inns Ltd, plus the five managed properties, as a going concern while a buyer is sought.
He concluded, “The underlying business remains strong and we have received a number of expressions of interest as might have been expected given the esteem in which the brand is held.”
Tennent’s, who could be one of the companies biggest creditors, and who in 2012 entered into a supplier agreement with Maclays, which also included an equity involvement, released a statement from Brian Calder, CEO. He said, “We can confirm that Tennent Caledonian Breweries (TCB) is a supplier to, and has an equity involvement in Maclay Group plc. Following the announcement by Maclay Group TCB will work with the bank, the administrators and other shareholders to optimise value for all stakeholders.”
Properties owned by Maclay Inns Ltd (Not traded by EY):- Abbey Inn & Bull Inn, Paisley; The Bank, Lansdowne Bar & Kitchen, The Lee and Three Judges, Glasgow; Braes, Dundee; East Port Bar, Dunfermline; Lorne Bar, Oban; The Rule St Andrews; Southsider, Edinburgh; Tullie Inn, Balloch; Village Inn, Arrochar and West Port Hotel, Linlithgow. The five managed by Maclay Inns (now managed by EY) are Clerk’s Bar, Edinburgh; The Hope, Munro’s and The Raven in Glasgow and The Wick in Prestwick. The management contract for seven pubs are been transferred to LT Pub Management. They are Canal Station, Paisley; Clockwork Beer Co and DRAM Glasgow; Dog House, Balloch; Laird & Dog, Lasswade; The Steading, Edinburgh and Wheel Inn, Perth.EY
The Alloa-based group, which last filed consolidated accounts with Companies House for a 16-month reporting period, ending 1st February 2014, said at that point that operating profits had dipped 15% to £604,616 against £718,302 for the 12-month 2012 financial year. Turnover rose to £13.52m for the 16-month against £10.43m reported for 2012, but its pre-tax loss was £199,819. It didn’t manage, according to notes in the accounts, to secure its term loan facility of £10.5m with Lloyds Banking Group, until February, 2014.
Ernst & Young (EY), who were appointed administrators of the MacLay pub group on Friday, have revealed that the two men handling the administration are Colin Dempster and Gavin Yuill. EY has also confirmed that it has already had a “number of expressions of interest.”
The administrator also released a full-list of the MacLays pubs – 15 of which are owned by the group, five are run under a management contract and a further seven properties which were transferred to LT Pub Management, a completely separate company, on Friday evening.
Joint administrator Gavin Yuill re-iterated the statement from EY on Friday when he said, “Faced with an unexpected funding requirement, the directors of Maclay Group plc and its trading subsidiary Maclay Inns Ltd decided to call in administrators to protect the business and safeguard jobs.”
He continued, “The contract for seven managed properties immediately transferred to LT Pub Management. EY will continue to trade the fifteen properties owned by Maclay Inns Ltd, plus the five managed properties as a going concern while a buyer is sought.
“The underlying business remains strong and we have received a number of expressions of interest as might have been expected given the esteem in which the brand is held.”
Speculation surrounds the fact that the administrators have revealed that the company had an “unexpected funding requirement.”
In February 2014, according to notes that appeared in the Group’s accounts, filed at Companies House its term loan facility of £10.5m with Lloyds Banking Group, “was not formally agreed until February 11, 2014.
Properties owned by Maclay Inns Ltd:- Abbey Inn & Bull Inn, Paisley; The Bank, Lansdowne Bar & Kitchen, The Lee and Three Judges, Glasgow; Braes, Dundee; East Port Bar, Dunfermline; Lorne Bar, Oban; The Rule, St Andrews; Southsider, Edinburgh; Tullie Inn, Balloch; Village Inn, Arrochar and West Port Hotel, Linlithgow. The five managed by Maclay Inns (now managed by EY) are Clerk’s Bar, Edinburgh; The Hope, Munro’s and The Raven in Glasgow and The Wick in Prestwick. The management contract for seven pubs have been transferred to LT Pub Management. They are Canal Station, Paisley; Clockwork Beer Co and DRAM Glasgow; Dog House, Balloch; Laird & Dog, Lasswade; The Steading, Edinburgh and Wheel Inn, Perth.
The directors of Maclay Group plc today announced that they have been forced to call in the Administrators after failing to” find a strategic solution to financial pressures facing the business.”
As a result the company has appointed EY as Administrators in a bid to protect the employment of some 500 staff across the 15 pubs and bars it currently owns. However for pubs within the company’s managed estate, seven have been transferred to LT Pub Management. They are Canal Station in Paisley, the Clockwork Beer Co in Cathcart, the Dog House in Balloch, Dram in Glasgow, Laird & Dog in Lasswade, The Steading in Edinburgh and the Wheel Inn in Perth. The administrators EY will honour the contracts for a further five managed houses which are Clerk’s Bar in Edinburgh, The Hope, Munro’s and The Raven all in Glasgow and The Wick in Prestwick.
Administrator Ross Nisbet told DRAM, “We only took over today (23rd January) and we will run the business as normal. We haven’t had an opportunity to look at the books fully but we understand that the underlying business is strong and profitable. It was just that the company had an unexpected funding requirement which led to our appointment. We will trade the company with a view to a sale.”
The pubs owned by Maclay Inns Ltd include Braes in Dundee, the Lansdowne Bar and Kitchen and the Three Judges in Partick and The Tullie Inn in Balloch.
Tennent’s who in 2012 entered into a supplier agreement with Maclays, which also included an equity involvement, released a statement from Brian Calder, CEO Tennent Caledonian Breweries. He said, “We can confirm that Tennent Caledonian Breweries (TCB) is a supplier to and has an equity involvement in Maclay Group plc. Following today’s announcement by Maclay Group TCB will work with the bank, the administrators and other shareholders to optimise value for all stakeholders. ”
The Alloa-based group, run by Steve Mallon, last filed consolidated accounts with Companies House for a 16-month reporting period, ending 1st February 2014. These figures revealed that operating profits had dipped 15% to £604,616 against £718,302 for the 12-month 2012 financial year. Turnover rose to £13.52 million for the 16-month against £10.43 million reported for 2012, but its pre-tax loss was £199,819.
For more information please contact the Administrators:
Maclay Group Plc has reported a pre-tax loss of £199,819 for the 16-months to February 1, 2014.
The Alloa-based group, filed consolidated accounts with Companies House for a 16-month reporting period, which showed operating profits falling 15% to £604,616 against £718,302 for the 12-month 2012 financial year and a pre-tax loss for the 16-months compared with a pre-tax loss of £737,379 booked for the 2012 year. However turnover rose to £13.52m for the 16-month against £10.43m reported for 2012. Due to a change in the company’s accounting year, the records lodged cover 16 months to 31/01/14 making a year-on-year comparison difficult, especially given the seasonal nature of the business.
Steve Mallon, Managing Director of Maclay Group commented, “During this period we embarked on a major investment programme spending over £1m to refurbish three key venues. This meant extended periods of closure for The Tullie Inn, Balloch, The Southsider in Edinburgh and the West Port Hotel, Linlithgow. As a result, sales at these venues were down in the short term, but since re-opening all three have exceeded our expectation. This year we will continue to invest in some of our other premises as well as in the development of our staff.”
The group notes average profit per pub for the 16-months rose 6.2% against the prior year, with like for like sales up 1.3%.
Maclay Group now operates 26 pubs across Scotland and employs around 540 people. Looking ahead, the directors said the results for the 16-months were “satisfactory” in difficult market conditions, and they “expect growth in the foreseeable future”.
Steve Mallon concludes, “Recent results, related to the start of summer and the Commonwealth Games activity, are very encouraging and we’re optimistic about the forthcoming Edinburgh Festivals and Ryder Cup events.”
Maclay Group, the Scottish bar and pub operator, has announced its financial results for year end 29 September 2012. Revenue was steady at £10.4 million, operating profit of £718,312 was down from £745,937 recorded in 2011, while net debt was reduced from £11.5m to £9.7m.
A property impairment charge of almost £680,000 plus an increase in financing costs from £670,046 to £776,027 were the main factors behind the pre-tax loss.
MD of the Maclay Group, Steve Mallon, said, “The year was dominated by economic pressures suppressing customer demand but I am pleased with the robust response from our staff who pulled together to keep operating costs tightly controlled thus ensuring that margins were maintained.”?However the company has revealed that sales over the Christmas period from 16th December to 5th January saw a 4% increase over the previous year with total sales amounting to £1,094,985 for the three week period – a £45K increase.?
Speaking on Maclay’s strategy for the year ahead, Steve said, “Following the equity investment by Tennent’s Caledonian Brewery (TCB) early in the 2012, the company’s financial position is strong and positions us well for the year ahead.
Just after we went to press last month, Tennent Caledonian and Maclay Inns announced that they have linked up in a deal which sees Tennent’s become the group’s main beer supplier. The transaction also sees Tennent’s taking a small stake in Maclays which will allow them to continue to grow their on-trade presence.
Maclay Group’s Managing Director Steve Mallon commented, “Maclay Group has the skills and infrastructure to grow its business and in Tennent Caledonian we believe we have found the right partner to support and accelerate that ambition. ’It wasn’t an easy decision to make, as our former partners Belhaven have always been very supportive, but this time the Tennent’s deal was the most attractive.”
Tennent Caledonian’s Sales Managing Director John Gilligan said, “Tennent Caledonian is committed to the Scottish on-trade and a key part of that is investing in high quality operators who can build successful retail operations to showcase our brands, with Caledonia Best in particular benefitting from this transaction. However we have no intention of owning pubs, our focus is on investing in good pub operators. And you don’t get much better than Maclays.” See our licensee interview with Steve Mallon centre pages.
Tennent Caledonian and Maclay Inns have linked up in a deal which sees Tennent’s become the group’s main beer supplier, while at the same time providing investment support for Maclay’s expansion drive.
Maclay Group’s Managing Director Steve Mallon commented, “Maclay Group has the skills and infrastructure to grow its business and in Tennent Caledonian we believe we have found the right partner to support and accelerate that ambition.”
While Tennent Caledonian’s Sales Managing Director, John Gilligan commented, “Tennent Caledonian is committed to the Scottish on-trade and a key part of that is investing in high
quality operators who can build successful retail operations to showcase our brands, with Caledonia Best in particular benefitting from this transaction.”
Both companies say they view the resulting combination of high quality outlets and an industry leading beer and cider portfolio as a strong platform for future growth and development.
Maclay’s currently has 26 pubs in its portfolio ranging from Bert’s Bar in Edinburgh to the Tullie Inn in Balloch and the Lansdowne in Glasgow.