THE PACKHORSE INN Background

Transcription

1 THE PACKHORSE INN Background The Packhorse Inn is a grade 2 listed, 17 th century building situated in the middle of South Stoke. In recent years it has been in the ownership of Punch Taverns who have done nothing to maintain or improve the property and charged an exorbitant rent to their tenant. In addition, the tenant was required to purchase his wet stocks from Punch taverns at inflated prices. It is therefore, hardly surprising that the tenant was declared bankrupt and Punch Taverns subsequently sold the property. At the time it was put on the market it was generally believed that the pub would be reopened the agents stated that it would only be sold as a pub and there were offers above the guide price from parties who wished to run the pub. A village committee was formed with the aim of saving the pub and the Parish Council registered The Packhorse as a Community Asset, so requiring the owner to advise the council of his intention to sell and giving the community six months to make an offer. The owner is not obliged to sell to the community but if a realistic offer is made, at what is considered the market price, and it is demonstrated that the business would be viable then the property is only likely to be of interest to others with an interest in reopening the pub. 1.

2 Profile of the business Before its closure, The Packhorse had a reputation as a good drinking pub which served reasonably priced food. There was a good core of regular drinkers, and many people from the village and outside used The Packhorse for eating. There was also a good passing trade, the area being very popular with walkers, and the pub being close enough to Bath to draw people out of the city. Bar areas The two bars provide sufficient space for probably nine tables, sufficient to sit about forty people. The larger room with the inglenook fireplace is a room of great character but needs a fresh coat of paint and improved lighting to give the room a softer feel. Tables and chairs can be simple to be in character with the room and judicious use of benches and settles would help to increase the amount of available seating. Pictures and ornaments are needed on the walls. The smaller room has less character but would be improved by better decoration and furnishings. The bar serving area requires improved shelving, sinks and fridges but is essentially a good working area from which to serve drinks. Garden The garden is attractive, partially walled, sheltered and a major asset to the pub. In good weather it greatly increases the capacity of the pub for both eating and drinking. In summer this area lends itself well to barbecues. There is room for an area to play boules. Kitchen The existing kitchen area is in need of complete refurbishment and would be better used for accommodation. It is intended to move the kitchen to the cellar which will give better access to the eating areas. With modern cooling systems, a good cellar is no longer of major importance and beers and drink can be stored in a secure shed. Toilets The men s toilet (outside), whilst basic, is adequate if clean, well decorated and provided with hot water, soap and towels. The ladies toilet (also outside) is badly in need of a good clean, redecoration and provision of decent facilities. Whilst it may be necessary to retain this facility for the use of disabled, it would be possible to adapt an existing bathroom on the first floor of the pub as a ladies toilet. This would be a major improvement at not very great cost and make the pub much more attractive to female clientele. It is known that there is a problem with the sewer drain and this will need to be investigated. 2.

3 Parking. Parking is limited to the front of the building and most visitors have to park on the road. However, in the past, parking does not appear to have been a restricting factor. In the future it might be possible to rent an area suitable for car parking at the bottom of the hill. Beverages The pub has always had a good reputation for its beers and ciders. As a free house the tenant will be able to shop around for breweries that will give the best deal. Initially two draught best bitters will be sufficient, two lagers, one keg cider and two still ciders on pump engines. The Packhorse has a reputation for selling ciders and a range of more specialist local ciders could be stocked. In addition to the usual range of mixers and soft drinks, premium bottled lagers and ciders will be stocked and a good quality wine list with prices to suit most pockets. Food Good quality, home cooked pub food would provide lunch for between 8 & 10 and a two course dinner at between at 12 & 16. Bed & Breakfast In addition to accommodation for the Landlord on the first floor, there is room for at least one letting bedroom with en-suite facilities. This will provide useful extra income. Market Prior to closure, customers were a mix of locals, walkers and visitors from Bath and surrounding areas. The pub is fortunate to have close proximity to Bath whilst being in a country location and it is vital that it retains its country pub feel whilst offering quality pub food, a good range of beers, ciders, wines and spirits and efficient and friendly service. Competition There are three pubs within a couple of miles, all very different. The Cross Keys is a locals pub with middle of the range food in quality and price. The Hope and Anchor offers good quality food from an extensive menu and is very much food orientated. The Wheatsheaf is very much a gastro pub at the high end of the market. The Packhorse can position itself between these as a proper country pub offering good quality pub food, but equally welcoming to those who wish to call in for a drink or a snack. 3.

4 Business plan A full business plan is in place, which is currently being appraised by experts from the trade, and demonstrates that the business is viable. A turnover, excluding VAT, of 200,000 is anticipated in the first year which should return a net profit of around 44,000, before interest/rent/tenants remuneration. In Year 2 a turnover of 220,000 will show a net profit of 55,000 (before interest/rent/tenants remuneration) and a turnover in the region of 242,000 and a net profit of around 57,000 for Year 3 (before interest/rent/tenants remuneration). The Intention The intention is to buy The Packhorse as a community owned pub in a company known as an IPS (see below), making it the focal point for the village and creating a facility where the whole community can come together. A place to meet, drink, eat, play or simply come for a chat, where everyone of any age is welcome and feels part of what is going on. A tenant or manager will be put in place to run the pub. The immediate objective is to raise the necessary funds. The property has yet to be valued but we believe it is worth in the region of 380,000 as a commercial premises. The fabric of the building appears to be in reasonable condition but the building needs rewiring, work to the drainage and alterations which we estimate will cost 150,000. Allowing some contingency, we will need to raise a minimum of 550,000. As much as possible will be raised through a share issue, and the residue through a mortgage. We are also exploring grant options. Once the IPS owns The Packhorse, recruitment of the right couple to run the Pub will be key to the success of the business. At present a tenant to run the pub is the favoured option but a Manager should not be ruled out. We hope that a tenant will take a lease of the pub and could afford to pay a rent to the IPS of 22,000, which would provide a return for the IPS of 4% on an outlay of 550,000. Current Situation The Save The Packhorse Committee has now been formed in to an official body known as an Industrial and Provident Society (IPS) and, as such, can make an offer for the Packhorse as a community asset. The Packhorse is owned by Mr Martin Sherry who bought the premises from Punch Taverns in The building has stood empty since but work has been done to the roof. Mr Sherry has announced his intention to sell and the process is now under way. The IPS has until November 22nd to register its intention to make an offer and then a further four and a half months in which to make the offer. All efforts must be concentrated on ensuring that sufficient funds are in place. 4.

5 Legal Structure The Pack Horse South Stoke Ltd is registered as an Industrial and Provident Society with the Financial Conduct Authority (Registration Nº 32235R). The IPS exists in order to carry on business for the benefit of the community. Assets owned by the IPS are locked in the IPS, and will be used solely for community benefit. The Pub is covered by the South Stoke Community Pub IPS Rules, available on request. The membership of the IPS is made up of its shareholders, with one vote per shareholding, regardless of size. The present management committee is made up of ten South Stoke residents. The committee will stand down en bloc at the first AGM, as obliged to do under the constitution, when individuals may offer themselves for re-election. An annual report of activities and finances will be provided to all members, and an annual return to the FCA and monitoring information provided as required by any grant bodies. Committee Penny Townsend (Chair) Steven Gourley (Secretary) Simon Pearson (Treasurer) James Townsend Gerard Coles Bob Honey Jenny John Trevor John Ben Cundy Nick Alexander Share Offer The share offer is designed to give investors the opportunity to contribute financially, on a long term basis, to the business of The Pack Horse South Stoke Ltd. We expect most shareholders to come from the local community but welcome contributors from further afield. The target amount we wish to raise from this share offer is 550,000. If we fail to raise the above amount and are unable to make up the difference by borrowing, the process will be deemed to have failed and any funds raised would be returned without loss. Share capital We are planning to raise the necessary funds by issuing withdrawable, interest-bearing shares. These shares cater to investors who would like to earn interest on their contribution, as well as to be able to withdraw it at some future time. Each share costs 50 and so an investor with 2,000 to contribute could purchase 40 shares However, we hope that most members will invest much more than this. We have decided that a minimum investment would be 10 shares ( 500) and no individual shareholder can invest more than 20,000 (400 shares). Unlike company shares, an IPS can pay interest on its shares and our intention is that the IPS will pay interest to its shareholders. The Shares will be also be withdrawable, thus in the 5.

6 event of a shareholder needing to extricate themselves from the enterprise, the IPS would buy back the shares from the investor and then resell to a replacement investor. In order to give the IPS a chance to launch the business we will require investors to commit to keep their investment in the IPS for at least the first five years before they can withdraw it, although the Rules will allow early withdrawals in exceptional circumstances. After that they will be required to give three months notice of their intention to withdraw funds. The IPS rules will give the directors the power to refuse a request to withdraw funds if it would endanger the business. It is our very firm intention not to use these powers unless absolutely necessary. We want investors to know that their money is available if and when they need it. The shares that members buy are redeemable in the way set out above, but the shares are not transferable, except in the case of death or bankruptcy of a member (i.e. members cannot sell them to anyone else). Interest Provided that the predicted levels of profitability are achieved, we plan to pay interest to shareholders that will be obtained from the secure income of rent paid by the tenant. Interest is paid gross and is taxable. The Membership will determine what proportion of profits is to be re-invested in the IPS, and the level of interest that is to be paid to shareholders. There will be no interest paid in the first year (six months to refurbish and open the pub and six month s rent holiday for the tenant) and thereafter we anticipate paying interest at 3.5%. We may need to take out a commercial loan to buy the Pub, dependent on the success of the share issue; we expect to pay this off in preference to interest payments to shareholders. Profits The IPS s rules determine that any surplus made by the IPS after it has paid interest to its shareholders must either be reinvested in the business or used for the benefit of the local community or for another charitable or community purpose. Directors and members are forbidden from benefiting in any other way from the activities of the IPS. It is our intention that the IPS will continue to operate the pub for the benefit of the village for the foreseeable future. If, however, the membership should choose, in the future, to dispose of the property, any surpluses that may arise, after all the shareholders have been paid back the amount they invested, must be re-invested in a community enterprise or used for a charitable purpose (known as an Asset Lock). The Pack Horse South Stoke Limited Orchard House Old Midford Road Bath BA2 7DQ An Industrial and Provident Society for the benefit of the community, number 32235R