the times | Monday May 2 2022 33Business
Heineken
to refresh
660 pubs
H
eineken is
pumping
£42
million
into
improving 660 pubs,
an investment that
will create 700 jobs.
The move lifts the
total spent on its Star
Pubs & Bars estate to
£115 million since the
pandemic started and
£300 million over the
past eight years.
It said that 137 pubs
would get a makeovercosting at least
£125,000, with most of
the investment going
to suburban pubs and
those in high streets
near residential areas,
reflecting the trend to
working from home.
Some of the money
will go into kitchen
refits and new bars,
but much will be
spent on outside areas
for eating and
drinking. At the
White Bear in
Knutsford, Cheshire,
Star Pubs has spent
£183,000 in a joint
refurbishment worth
£200,000 with the
licensees that has
turned it into a family
friendly local with a
beer garden.Heineken UK owns
about 2,400 pubs,
most of which are
leased and tenanted.
Lawson
Mountstevens, 54,
managing director of
Star, said: “People
have stayed closer to
home over the last
two years due to the
pandemic and turned
to their local for the
kind of experience
they’d previously have
travelled to a city
centre restaurant or
bar to find. They don’t
want to turn back
time: they expect
better quality,
including food and
speciality drinks that
are harder to recreate
at home.”The sale of the EG Group petrol fore-
courts empire by the billionaire broth-
ers who own Asda could unlock billions
of pounds towards a potential takeover
tilt at Boots, the high street chemist.
Zuber and Mohsin Issa, who own
Asda with TDR, their private equity
partner, are reported to have been in
discussions with the Canadian conve-
nience store chain Couche-Tard for
several weeks about a possible merger.
The negotiations were first reported
by The Wall Street Journal and are un-
derstood to be in their early stages with
no deal agreed.
The Issa brothers founded the EG
Group in 2001. It has grown from a
single forecourt in Bury, Greater Man-
chester, to become one of the world’sdecisions at the onset of the pandemic.
Buffett has not changed his mind
about cryptocurrencies. He would not
buy “all of the bitcoin in the world” for
$25. The world’s largest digital coin
might currently change hands for al-
most $38,000, but as far as he’s con-
cerned, it “doesn’t produce anything”.
His partner went a step further. “I
have a slightly different way of looking
at it,” said Munger, who believes the
cryptocurrency is “very likely” to fall to
zero. “In my life I try and avoid things
that are stupid and evil and would makebours no “bias against” transactions be-
yond the United States, even if they can
be more convoluted elsewhere. “We
have so much trouble finding good
ideas that we can’t afford to ignore any,
but they do have to be sizeable now.”
As inflationary forces ensnare the
global economy, Berkshire’s bosses
held forth. Price growth of the “extraor-
dinary” level that companies and con-
sumers have seen of late “swindles al-
most everybody”, Buffett argued, but he
described Jerome Powell, chairman of
the US Federal Reserve, as a hero for hiscontinued from page 31
Buffett boosts Activision stakethat his company will “always have a
lot of cash on hand”, said that it pur-
chased equities worth $4.6 billion on
March 4, its most expensive day for
stock market investments during the
quarter.
It amounts to a change of stance for
the company, which had been a net
seller of stocks during the pandemic as
its leader expressed wariness over lofty
valuations. Financial markets endured
a turbulent start to 2022 as concern
over the direction of the global
economy and Russia’s invasion of
Ukraine knocked equities.
Berkshire Hathaway reported a fall
in profits in the three months to March,
with net earnings more than halving
from $11.7 billion to $5.46 billion, as
earnings from the group’s insurance
underwriting business slumped from
$764 million to $47 million.
It reported a $1.58 billion loss on its
investments in the quarter, although
Buffett stressed that such gains or
losses during any given quarter were
“often meaningless.”
King of tech giants shows little sign of
surrendering the throne, pages 36-37me look bad in comparison to some-
body else. And bitcoin does all three.”
Munger, a plain speaker, saved his
bluntest remark for those calling on his
friend of six decades to cede some con-
trol. Some had sought to oust Buffett as
chairman, arguing that companies are
best placed with a separate chairman
and chief executive.
“To me, it’s the most ridiculous criti-
cism I ever heard,” Munger said. It’s like
Odysseus returning from the battle of
Troy, he suggested, only to be told by
someone: “I don’t like the way you were
holding your spear when you won.”
Neither man is prepared to step
down, but there remains apprehension
among the rank and file about what
Berkshire will be without them. They
are collectively almost 190, Buffett ob-
served.
When the day comes, Buffett has
lined up Greg Abel, the Berkshire vice-
chairman leading its non-insurance
business, to become chief executive. On
Saturday Abel and Ajit Jain, who heads
the conglomerate’s insurance opera-
tions, sat beside Buffett and Munger on
stage and got a few words in edgeways.
The show must go on, according to
Buffett. “Berkshire is built forever,” he
sought to reassure investors. “There’s
no finish point.”Greene King
boss calls for
help through
rates and duty
The boss of one of Britain’s biggest pub
companies has warned the govern-
ment that the hospitality sector is “not
out of the woods” as he called for action
on business rates and alcohol duty.
Nick Mackenzie, 53, the Greene King
chief executive, said that the speed with
which Whitehall had responded to
Covid-19 had been positive and appre-
ciated by the industry, but he said that
it had missed an opportunity by push-
ing VAT back up to 20 per cent and not
reforming business rates.
“The government have clearly pulled
away from giving support to the sector,”
he said. “We were glad of the support at
the beginning of this year, but that
support dropped away in the second
half of the year and we started to stand
on our own two feet again.”
He said he understood the economic
pressures on the government but said:
“The challenges are still very real.
Whilst sales have broadly returned to
2019 levels, the underlying challenges
of significant cost inflation, labour
shortages and regulations will con-
tinue to impact the pace of recovery of
the sector and we therefore look to the
government for support through busi-
ness rates and alcohol duty reforms.”
Greene King, based in Bury St Ed-
munds, runs 1,615 managed pubs and
has 1,002 tenancies plus two breweries.
The company was founded in 1799 and
brews beers including Greene King
IPA, Abbot Ale and Belhaven. It was ac-
quired in 2019 for £4.6 billion by CK As-
set Holdings, controlled by Li Ka-shing,
the Hong Kong-based billionaire.
Last year Greene King received
£141 million of furlough money and
£10.3 million of state aid grants and re-
duced VAT, as well as a £300 million
Covid corporate financing facility. It re-
paid the loan facility but said it would
not be repaying the furlough money.
“Furlough was there for a reason —
to protect jobs — and I think it did that,”
Mackenzie said. “We topped up our em-
ployees up to 80 per cent, so it cost us,but we were losing significant amounts
of money at that time, haemorrhaging
cash. I think it did what it was supposed
to do — very successfully, actually.”
He added: “If it wasn’t there a lot of
people would have lost their jobs.”
In the year to January 2, Greene King
lifted revenue by 41.6 per cent to
£1.34 billion, with strong trading in the
second half after a first half that started
with 15 weeks of closure. It swung from
an operating loss of £186.9 million to an
adjusted profit of £18.6 million, while
on a statutory basis it turned 2020’s
£433 million loss into a profit of
£63.8 million.
Mackenzie said that the company
had delivered a “resilient performance”
thanks to the efforts of the group’s
39,000 employees, such that sales had
all but returned to pre-pandemic levels.
Greene King Pub Partners, its ten-anted pub business, received support
from the group worth £18 million,
mainly through rent concessions. Its
five divisions — brewing, tenanted
pubs and its three managed pub opera-
tions — all delivered growth.
During the year, Greene King’s
£1.4 billion securitisation breached its
cashflow covenant, resulting in a bor-
rower-level event of default. Bondhold-
ers granted a waiver in May.
Conversely, multiple covenant
breaches on the group’s £100 million
Spirit securitisation, a legacy of Greene
King’s takeover of the Spirit Pub Com-
pany, were greeted differently. Re-
quests for further waivers for these
breaches were rebuffed. The Spirit de-
benture remains in default, albeit that
Greene King has sufficient headroom
under its loan facilities to repay the debt
should bondholders seek to enforce.Dominic WalshPetrol deal primes pumps for Boots bid
largest petrol station operators with
hundreds of sites across the UK. It also
owns the Leon restaurant chain and
Cooplands bakeries and hundreds of
franchised KFC, Starbucks and Burger
King outlets. Annual underlying profits
at EG rose by 16 per cent to $1.45 billion
in 2021. Revenue grew 24 per cent to
$26.5 billion. Last month it said it
planned to add 22,700 jobs in the UK in
the next five years.
Couche-Tard is a Toronto-listed
chain of 15,000 stores across North
America, Europe and Asia including
Circle K and Ingo. It is understood to be
searching for a big deal after the French
government last year blocked a take-
over, of Carrefour, the supermarket
chain, calling it a threat to the country’s
“food sovereignty”.
The brothers have been linked with a
potential takeover of Boots after thebusiness was put up for sale in Decem-
ber by Walgreens Boots Alliance, its
American owner. The deadline for bids
is May 16, with Mukesh Ambani, one of
India’s richest men, also thought to be
working on a takeover deal.
EG Group declined to comment and
Couche-Tard did not reply to a request
for comment.
Walgreens is said to be willing to keep
a stake of between 15 and 30 per cent in
the pharmacy chain to smooth the path
towards a £7 billion sale, amid concerns
that war in Ukraine will hamper buyers’
ability to raise debt financing.
Boots has about 2,200 stores in the
UK, employing more than 50,000
people, and reported a 22 per cent in-
crease in like-for-like sales in the three
months to February on the back of
stronger online sales, reversing a
17.8 per cent drop a year earlier.Arthi Nachiappan
Economics CorrespondentNick Mackenzie
says challenges
facing hospitality
are “still very real”cutout of Warren Buffett attracted fans. Stars in attendance included Bill Murray
CHANDAN KHANNA/AFP/GETTY IMAGES; SCOTT MORGAN/REUTERSthe Omaha faithful