Honeycombe buys Devonshire Pub Co

Preston-based pub operator Honeycombe Leisure has bought the 35-strong Devonshire Pub Company for £10m. It will pay £8.5m in cash and loan notes as well as taking on £22m in debt. A further £1.5m in cash is due in 12 months' time. The acquisition of Devonshire takes the number of pubs in the group to 89, but 12 pubs have been earmarked for disposal. Proceeds from the sale will be used to pay off debts. But Honeycombe also warned that its financial results for the current year are likely to be below expectations. It said in a statement: "Due to Honeycombe's focus on refurbishing its own estate, and making no one-off acquisitions during the completion of this transaction, the current year's results are likely to be below market expectations, but comfortably in excess of those achieved in 1999-2000." Like-for-like trading during February had been good, however, at 3% ahead of last year. Devonshire was formed in the early 1990s. In 1998 it sold its tenanted pubs to Pubmaster, concentrating instead on its managed pubs in the North-West and Yorkshire. In the year to March 2000, turnover was £12m. Honeycombe said: "Devonshire provides an excellent geographical and operational fit to Honeycombe's current operations: the two estates overlap in only one location, but all Devonshire's outlets fall within two hours' drive of our Preston headquarters."