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Preston Park Tavern: A new lease of life?

20 July 2006
Preston Park Tavern: A new lease of life?

Taking over a neighbourhood pub wasn't, perhaps, an obvious career move for Andrew Coggings, whose CV includes managing the five-star De Vere Grand Hotel in Brighton and Brown's Hotel in London, not to mention properties in Dubai, South Africa and Malaysia.

But at the age of 42, Coggings was keen to do something different. Most of all, he wanted to run his own business. "That was my main goal. I had been a general manager for 10 years and didn't want to do it for another 10. It was time for a complete change," he explains.

That change has arrived in the unlikely looking form of the Preston Park Tavern, a run-down local boozer in a residential suburb of Brighton, not far from where Coggings and his family were living. He had already been looking for a suitable venture for almost three years when he heard that the pub's lease was up for sale. Curious, he went to take a look.

First impressions, he admits, weren't promising. "It was one of those fairly intimidating pubs where everyone stops and stares when you walk in," he remembers. "And the place was in a pretty bad state inside. But, at the same time, I knew it was a fantastic opportunity. I just couldn't walk away from it."

Five months on, Coggings is as good as his word, having bought the eight-year lease from Punch for £130,000, He funded the purchase himself by cashing in share options and selling the family house.

Food-led venue

With his wife, Helen ("she's as much a part of the business as I am"), he's now planning to transform the property from a spit-and-sawdust, male-dominated football pub into a non-smoking, family-friendly and food-led venue.

The business also involves a complete lifestyle change. The Coggings will be moving, with their two sons, aged seven and eight, from their family house into a five-bedroom flat above the pub and the couple will also be working together as a business team for the first time. Both plan to be fully involved, with Andrew looking after the supplier side of things and Helen, who hasn't worked in the industry before, doing the interior design, menu design and working front of house.

First, however, comes a complete refurbishment, set to cost about £100,000. The couple plan to install a brand-new kitchen, new gents toilets and a new back bar, as well as redecoration throughout and a smartening-up of the outside areas. Work started last week and is due to complete in five weeks for a mid-August opening.

Obligations

On the whole, the buying process has gone smoothly, but the news that, under the terms of the pub's full-repairing lease, the couple were contractually obliged to carry out £31,000-worth of dilapidations, including damp proofing and roof repairs, in their first six months, did come as a bit of a shock.

"Until the brewery is happy that I've done the work, I have to put up £31,000 as a bond to them. But, in the meantime I also have to pay that amount to the contractor. So, basically, I'm paying twice," Andrew points out. "Most of the repairs I'm required to do as part of the lease are things I would have done anyway, but it still affects cash-flow."

Altogether, he estimates total start-up costs will be about £250,000. This includes the cost of the lease, the refurbishment and three months-worth of the annual £36,000 rent, which he has
also had to put up as a deposit.

"We had loan offers but we wanted to go in with no borrowing as it puts us in a much stronger position. Selling the house wasn't essential but it has certainly made things easier financially," he explains. "And, as we're not answerable to the bank, bottom-line profit doesn't have to be the absolute be-all and end-all."

Clientele will be predominantly "locals, who want a decent bite to eat," and food will play a big part in the pub's new look and feel. Menu ideas are still being developed, and Andrew is currently in the process of recruiting a head chef, but he and Helen are clear on the offer. "We want to do honest local food. I don't like using the word but it will have a gastropub theme," Andrew says, before adding, "No offal dishes though. More along the lines of decent sausages and steaks, plus a good vegetarian range that's not just the same old goat's cheese tart or pasta."

A lunchtime menu is likely to offer sandwiches and salads while evenings will see "more restaurant-style" meals and a separate children's menu will be available. Andrew plans to buy locally and organic "wherever possible", and is currently weighing up whether to print daily menus. "That way, we can easily make changes if we need to."

In the first year, the couple are looking to achieve a £400,000 net turnover, an increase on the £288,000 achieved by the previous owners over the past 12 months. Andrew is anticipating a 60/40 wet/dry split. "But we need to be realistic. I'm used to a five-star market where gross profit on drinks is about 75%. Here I'm buying beer and lager from Punch and it's pub prices so, to a certain extent, I'm not sure how it will work. We'll have to wait and see," he says.

Having a hotel industry background has proved to be useful in many areas. With his experience, Andrew managed to persuade the brewery to let him off its mandatory two-week training course for new landlords, which saved him £1,000, and he has been busy catching up with old supplier contacts around the country.

Hands-on

In fact, he says, his steepest learning curve so far hasn't been crossing over to the pub trade but rather getting used to being hands-on again. "In the past, I've had a PA and an F&B manager to do things, but now it's all down to me, from choosing the crockery, hiring the staff right down to buying the till rolls," he grins. "Ask me in two years' time whether I want to be cleaning toilets and the answer will probably be no. But for now,
I can't wait to get stuck in."

The pub is set to open its doors on 14 August and right now, it's all systems go. The family are set to move in to the flat any day now and builders are arriving on site to start the work, not to mention the fact that Andrew has only a few weeks to recruit a whole new staff team. It's certainly going to be a busy few weeks.

Factfile:

Preston Park Tavern 88 Havelock Road, Brighton

Opening: 14 August 2006

Owner: Punch Taverns

Refurbishment costs: £100,000

Lease: £130,000 for eight years

Annual rent: £36,000

Turnover under previous leaseholder (2005-06): £288,000

Projected turnover (August 2006 to August 2007): £400,000

Ask an expert

  • Simon Wells from Colliers Robert Barry offers advice on buying a pub lease…
  • Pub leases have become simpler over the years but it's still vital to get everything checked by a solicitor who is experienced in the hospitality trade before you sign.
  • Brief your solicitor as to what you intend to do with the business, especially if you want to change the offer - eg, make it food-led, not wet-led
  • If you're remarketing your pub as a food-led business, remember this will almost certainly impact on the beer volumes. You should always check for any minimum purchase obligations for beer in the lease's buying agreement, as failure to do so could incur financial penalties
  • Check the clause that deals with the use of premises to determine whether the sale of food is allowed and ensure that there are no other restricting clauses relating to selling food.
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