This Month's Articles: Glass Half Empty or Half Full?, Lies, damn lies and
statistics, Pinders Healthcare Design Awards 2010 |
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Glass Half Empty or Half Full ? |
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The woes of the public house sector over the past year have been enough to drive its landlords to drink. For the uninitiated, publication of Christie & Co's latest indices appeared to add to their troubles, with headlines of pubs losing 20% of value in 2009. |
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However, closer analysis of the indices indicates that because of the recession and consequently lower number of transactions occurring in 2009, good operators with healthy businesses did not generally come to the market. Christie & Co's data was therefore skewed towards transactions at the bottom end of the market, with PubCo disposals naturally being priced significantly lower than successful, good quality businesses. |
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The main decline in values happened in 2008, with the ‘credit crunch’ impacting upon loans being offered to publicans, thereby affecting demand, and a crash in customer spending due to a lack of confidence in the wider economy, which affected sustainable income levels. |
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The difficulties of the pub sector, however, must be seen against the wider context of alcohol consumption in the UK. The British Beer and Pub Association (BBPA) have published statistics that show alcohol consumption has actually fallen by over 12% since 2004, whilst consumption of alcohol in the on trade has fallen by 20% over the same period. There are currently more pubs in the UK than can be sustained by the level of pub-goers, meaning that some will inevitably fall by the wayside, particularly in areas where competition is fierce or the scope for alternative use is more attractive. |
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However, at Pinders we are seeing cause for modest optimism. Over the past couple of years, we estimate that 60% of pubs have managed to maintain or improve their trading performance, thanks to hard work and excellent customer service, which should stand them in good stead when the mood of the country begins to perk up. |
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Many of the pubs seen have been run by tenants of PubCos seeking to take advantage of low interest rates and the property markets by acquiring their own freeholds. Experienced operators are also seeking to acquire either larger, or additional, outlets, and these operators should be attractive to lenders, as they can demonstrate an established track record backed up by historic accounts and are likely to have some equity in their existing units. |
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PubCos are continuing to dispose of their pubs and these still have the capacity to trade successfully, given the right purchaser with the right resources. In any case, many of the disposals seen by Pinders are priced within reach of new entrants to the market, at fairly modest loan-to-values, assuming significant investment is not required. |
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The longer term future of the pub market remains inextricably linked to consumer and financier confidence alike, as well as the fortunes of the housing market. Whilst it may be some time before we see substantial capital growth, value growth driven by increased trade and profits is certainly possible in the short to medium term in a sector that has traditionally performed well in adversity, thanks to the resilient entrepreneurial spirit of its business owners. |
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This is a condensed version of an article that will be appearing in Business Money magazine |
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| Article by Pinders Director Malcolm Kidby |
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Lies, damn lies and statistics....
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It has been generally accepted that the dramatic increase in childcare provision seen in the 'noughties' would not necessarily be sustainable in the short term as reluctance to pay ever-increasing child care fees from clients was compounded by the spiralling impact of a minimum wage rate. |
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| As a main driver to encouraging providers to improve standards, what could be better? Add the recession into the equation and quality standards become ever more critical. |
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The latest Ofsted figures, which show that the total number of childcare places in England have dropped by 11,000 in three months as at the end of December, show a fall in both the numbers of childminders and 'non-domestic' childcare settings on the Early Years Register since September. |
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Ofsted further suggest that the quality of childcare varies across the sector. The proportion of good or outstanding provision ranges from 47% in out-of-school schemes to 65% in full day-care settings, with an increase in the proportion of day-care group providers achieving good or outstanding having risen from 53% in 2005–06 to 64% in 2007–08. |
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Interestingly, they also report that they are seeing evidence that well-established provision is generally of a higher quality than newer, more recently registered provision. Experience is, therefore, inevitably an important quantitative and qualitative measure when it comes to lenders’ perception of operators seeking to develop or expand. |
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The figures do tend to give the lie to the assumption that anybody can run a nursery. This is now, without doubt, a highly sophisticated and professional market. Those nurseries able to show proven quality of care and education within a good environment are undoubtedly best placed not only to survive, but also to secure the value of their business investment. |
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| Article by Pinders Director Steve Marriott |
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Pinders Healthcare Design Awards 2010 |
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The prestigious Awards are now entering their second decade and the 2010 Luncheon will once again be held at Lord’s Cricket Ground on 25th March 2010, where we expect up to 500 guests to take the opportunity to network with some of the biggest names in the industry. |
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There are six Award categories, each of which seeks to acknowledge the contribution made by home owners, designers and architects to the well-being and quality of life for those in their care. The categories encompass all aspects of care provision, including developments for the elderly and infirm as well as specialist homes for those with disabilities, and care establishments of all sizes, types and locations are encouraged to take part. |
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Whilst architectural standards and innovation are key factors, the overriding test for any project has to be the degree to which it has recognised the needs and desires of the residents and incorporated these into the final design. The judges look to reward quality of care, achieved through quality of design, rather than design alone. |
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Tickets for the event are on sale now and can be ordered by contacting Pinders on 01908 350500. |
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