Marston’s to run Brains’ pub portfolio
Marston’s has exchanged contracts with Brains to operate its portfolio of 156 Welsh pubs on a combination of leased and management contract arrangements.
Established in Cardiff in 1882, Brains’ pub business today comprises a freehold estate of 86 managed and 55 tenanted pubs, together with a leasehold estate of 15 managed pubs and bars employing around 1,300 people.
The business has been struggling under the Covid-related trading restrictions and the deal aims to address its immediate funding requirements.
Marston’s has exchanged contracts with Brains to operate its portfolio of 156 Welsh pubs on a combination of leased and management contract arrangements.
Established in Cardiff in 1882, Brains’ pub business today comprises a freehold estate of 86 managed and 55 tenanted pubs, together with a leasehold estate of 15 managed pubs and bars employing around 1,300 people.
The business has been struggling under the Covid-related trading restrictions and the deal aims to address its immediate funding requirements.
Marston’s said it would also preserve the freehold capital value for Brains’ stakeholders, protect its brand name and safeguard jobs.
The firm added that Brain’s pub portfolio, which includes more than 200 bedrooms in prime locations, was complementary to its portfolio of 106 pubs and strengthened its presence in Wales.
The pubs will continue to be run under the Brains brand and sell its beers.
From February, Marston’s will operate 141 freehold pubs on a leasehold basis, with the majority on lease agreements of 25 years.
An annual rent of £5.5m will be charged from April 2021 and the outlet-level EBITDA on a pre-Covid basis is £14m, Marston’s said.
The firm will also operate the 15 short-leasehold sites on a management contract basis for a period of two years.
It added that an overhead of up to £2m would be required to operate the additional pubs.
Ralph Findlay, chief executive of Marston’s, said: “These high-quality pubs are a great fit with our existing estate and will benefit from Marston’s scale and operational expertise to further unlock their excellent long-term potential.”
John Rhys, chairman of Brains, added: “This agreement marks the formation of a lasting strategic relationship with Marston’s which secures the future of Brains’ pubs and 1,300 of our employees within them.
“We know and trust Marston’s to be excellent custodians of our pubs and, whilst this is not a decision we have taken lightly, we are confident that both our pubs – and our pubs teams – will thrive under their stewardship. Furthermore, this transaction enables Brains to recapitalise its balance sheet and continue its long heritage as an independent entity.”
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