London & Edinburgh Swallow Group

Telephone:

0870 770 0777

Activities:

Privately owned London & Edinburgh Swallow is the operator of a mixed portfolio of hotels and inns, tenanted pubs and managed pubs and restaurants.

It is the largest hotel group in Scotland and the fifth largest in the UK, with approaching 140 properties, ranging from coaching inns to luxury hotels. In 2005 it was ranked as the ninth-largest pub company in the UK, with about 600 tenanted and leased properties and 150 managed houses.

The company started as the London Inn Group, but was until last year known mainly through the name London & Edinburgh Inns, its principal trading subsidiary. The majority of its hotels operate under the Swallow brand name, which the company purchased from Whitbread in 2003. Its pubs are unbranded.

No freeholds are held by the operating companies within the group. Instead, freeholds are held by separate companies, usually backed by wealthy individuals. Investors include property moguls Mark Pears and Tony Khalastchi.

Since early 2004 the company has largely abandoned acquisitions in the pubs market in favour of hotel transactions. It has also started buying golf courses, of which it owned seven as of March 2006.

Chief Executive:

Peter Gray

Key People:

Executive chairman: Alan Bowes
Head of pub division: Gerry O’Boyle
Head of tenanted and leased pubs: Danny Rogers
Head of React Inns: Mick Sheridan

Strategy:

The company plans to concentrate on acquisitions in the hotel market at present, as it believes property in the pubs sector is currently overvalued and sees the forthcoming ban on smoking as having a dramatic effect on pubs’ trading. The aim is to double the number of hotels managed by the group by early 2007 and ultimately become the largest hotel group in the UK, with ambitions to move into Ireland as well. Acquisitions can be either small groups or individual hotels. The company is also targeting the leisure market, investing in leisure facilities at existing hotels and buying golf courses.

Source: executive chairman Alan Bowes, March 2006

Operating Data:

Number of hotels: approaching 140
Number of managed pubs: about 150
Number of leased and tenanted pubs: about 600

Group figures:
Projected turnover for 2006 (calendar year): about £350m
Projected profits for 2006 (calendar year): about £30m

Swallow:
Turnover 2005: about £80m
Profit 2005: nearly £8m

Tenanted pubs:
Turnover 2005: £40m-£45m (projected)
Profit 2005: about £3m (projected)

Year end: 31 August 2005

Number of employees: about 8,000

Address:

5th Floor, Meadow House
Medway Street
Maidstone,

UK