Mark McQuater is hungry, but he's not simply salivating over his company's newly launched dish, Barracuda Bake. The amiable chief executive is, in fact, keen to boost his fledgling Barracuda Group empire, adding more pubs to a network that now stretches across the UK.
Waiting at London pub the Prodigal to be served the company's new piscine pleasure, I ask him who he most admires in the pub industry. His answer is Ted Tuppen, the chief executive of Enterprise Inns. He goes on, warmly endorsing all that Tuppen has achieved in building Enterprise up into a leased-and-tenanted giant with more than 9,000 UK sites, adding: "I'd like to think of Barracuda as a business that would be able to achieve the same sort of success."
It's certainly not done badly so far. The managed-pub company has in four years gone from a start-up to a very respectable 152-site company with national reach - the latest pub is a former post office in Bristol's Fish Ponds area, which opened at the end of May. This week the company will officially open its first site north of the border, a £1.4m development in Perth's old city library, under its main Smith & Jones brand. The company's other brands are Barracuda Bars, previously Springbok, and the student-friendly concept Varsity, one of which recently opened in Manchester.
Turnover for 2003 was up 25% year on year to £83.2m and the company, which has consistently grown by more than 20% since formation, expects to hit the £95m turnover mark by the end of its financial year in September. The magic £100m was on the cards but has been pushed back due to the slippage of several pub openings.
With £20m for purchases from a newly renegotiated banking facility at its disposal, and 17 pubs scheduled to open over the next six months, the march shows no sign of stopping.
"The barracuda is the fastest fish in the sea and very predatory," says McQuater of the company's namesake. "If anything comes up for sale we'll look at it. One of the biggest challenges at the moment is lining up enough sites that have the correct licensing and planning permission, at an affordable price."
Since founding the company with backing from PPM Ventures in July 2000, McQuater, 43, has overseen four major package deals. In July 2000 the company acquired 35 pubs from Enterprise Inns for £50m. By October of that year it had bought the Ambishus Pub Company for £36.5m, an operator of 61 managed pubs in the South-east of England. September 2001 saw Barracuda pick up 50 pubs from Wolverhampton & Dudley Breweries for £37.25m, while October 2002 bought a halt to the purchasing spree with an £8.3m deal for eight of Old Monk's largest bars, up for sale after the company went into administration.
McQuater is a qualified chartered accountant, and was managing director of JD Wetherspoon from 1994-96. After this he spent time as managing director of two separate turnaround projects. First he worked for Rank Group and resurrected pub company Tom Cobleigh, which saw a significant increase in profit, prompting an eventual sale. He then joined the board of Greenalls Group, a large Northern drinks company, and ran its pubs and restaurant division. After it achieved operational improvements at the division, it was sold in 1999 for £1.15b. McQuater, with a number of his executive team from Greenalls, then moved on and began preparing for the launch of Barracuda.
"When you're building 20 to 30 pubs you need the money in place," says McQuater. "I've worked as a director of a merchant bank (NatWest Ventures) and know the system. At Barracuda we've taken a holistic approach to development, as you can't just have people, brands or property, it has to be tied together as a cohesive whole."
Back to the launch event, and the company's fitting introduction of its new bake - developed in conjunction with Northampton-based Classic Cuisine. The hapless but tasty barracuda have been imported all the way from Australia (a shipment of 200, one of the biggest ever to head to the UK) and are a new addition to the menu as part of a food operation that's continuing to grow in importance, for the company and pub industry alike.
At present food contributes 15% of the group's turnover, although the additional drinks people have with meals increases the value further, and has grown by 1% year on year since foundation. Thanks to a kitchen promotion called Food Race, a big operational push that has seen kitchen capacity increased to better cater for the lunchtime market, food sales in the six months to May soared 27%, with cod and chips remaining the punters' favourite.
The company also launched a new wine list in May, featuring more New World wines, such as Chilean, to meet the growing public taste for them.
McQuater has stated that 300-500 sites is his goal for Barracuda, and believes the core Smith & Jones brand is capable of supporting 400 of these. He says the city-centre market isn't what Barracuda is about, although it has sites in these areas; the affluent suburbs are nearer the mark. "Some pubs and bars are places to be seen, but our pubs are somewhere you can go and relax," he says.
McQuater believes that the underachievers in the industry will be consolidated soon, with fewer pub groups around in the next few years. Spirit's purchase of Scottish & Newcastle Retail last autumn and Wolverhampton & Dudley's recent gobbling-up of Wizard Inns back this up. And it would certainly be unwise to bet against the well funded and organised Barracuda making more waves in the marketplace.
With Laurel Pub Company's 432-strong neighbourhood portfolio currently up for sale, the remaining months of 2004 look set to offer up a number of attractive acquisition opportunities in the sector. "The company is lean and performance-driven, but not about squeezing the last £100 out of each pub's weekly takings. We're a fun, young business, and have a highly motivated, happy team," says McQuater. "The market is waking up again and there's a real buzz. It's going to be an exciting year."
Tel: 0845 345 2528
Head office: Marlow, Buckinghamshire
Brands: Varsity, Smith & Jones and Barracuda Bars. There are 152 pubs in total
Where: the company operates in England and Wales, and will open its first pub in Scotland this week in Perth
Performance (2003): turnover £83.2m