The Business

Tom Cobleigh was developed as an independent pub retailer operating in the Midlands, East Yorkshire and Humberside regions. At the time of exit in 1997 it operated some 59 outlets, of which 42 were managed pubs trading under the Tom Cobleigh brand. Many of these pubs, which were purpose-built, larger, "out-of-town" properties, were designed to have wide consumer appeal, offer good value for money and wholesome food in comfortable surroundings. At the time of our first investment in 1992, market analysis clearly confirmed a declining trend in trading through town centre traditional tenanted pub chains. The same analysis suggested strong consumer preference for well-sited, large, managed pubs offering good quality, reasonably priced food. We shared the management team’s vision and strategy for the successful development from scratch of a managed pub retailing business at this time.

The Management

Derek Mapp had been a member of our management pool prior to the decision to back Tom Cobleigh. He had, for a number of years been a main board director of a publicly quoted Midlands brewery where he had been responsible for the development of a successful, managed, branded, food-led pub chain. His prior experience, therefore, gave him excellent credentials for this project. Ken Pratt, finance director, had previous experience as finance director in a large motor retailing chain and a small, quoted leisure company.

Strategic Development

Over the period of the strategic business plan, the management team successfully accomplished a number of significant value-adding key tasks. These included the establishment of a recognised brand with a reputation for customer service, the development of a largely freehold estate of 42 large, managed houses within a discrete geographic area – each of which was built or refurbished to a high standard – and the development of a management team capable of growing the business into a major regional player in the rapidly expanding managed pub sector. Tom Cobleigh was floated on the London stock exchange in November 1995 at a price of £1.50 per share, capitalising the business at approximately £60m. In September 1996 The Rank Organisation (Leisure Holdings) plc announced a recommended cash offer for the company at a price of £2.40 per share. We did not sell any of its investment at flotation and received from Rank £46m for its 51% stake, equating to an IRR of 57.2% from this investment.

investment portfolio