Theme pub operator hopeful of rebound

The pubs division of Metro Hospitality Group continued to struggle throughout the 2012-13 financial year, but management is confident of a much improved result in the next reporting period.

Metro, the trading division of ASX-listed Transmetro Corporation, lost $58,517 on its four pubs, a major drag on its accommodation business, which reported net profit before tax of $6.17 million for the year ending 30th June 2013.

Transmetro Hotels chief operating officer George Bedwani told TheShout there were a number of external factors affecting trade in the Perth and Sydney venues.

Bedwani said that the construction of an office block opposite Paddy McGuire's in Subiaco had discouraged punters from the pub due to dust and noise, while Sydney's Palace Hotel was the victim of an unprecedented run without shows at the neighbouring Capitol Theatre, which the Palace relies heavily on for foot traffic.

With construction completed on the Subiaco site and an impending run of shows at the Capitol, beginning with next month's Lion King, Bedwani was confident of a turnaround, with noticeable improvement in the early stages of the new financial year.

"[At the Palace] our revenue over the last four or five months is better than last year, when we had lots of gigs coming in. So when those gigs come back again, we'll do well," he said.

He added that the Palace's gaming trade has shown a major uplift as a result of renovations that allowed smoking in the gaming area, while the tenants of the newly completed office building near Paddy McGuire's have already swelling its customer base.

In Adelaide however, Bedwani said there could be "no excuses" for the poor performance of the group's third wholly owned pub, The Elephant, and the company is looking at refurbishment options to boost trade.

Metro's fourth pub, the Elephant and Wheelbarrow in Perth, in which the company holds a 25% share, brought a "good dividend", Bedwani said.

He said there were no plans to expand the pub portfolio.  "We're inclined to accommodation more than pubs, that's our forte. We are increasing our income and our holdings with accommodation, not pubs."

Transmetro's group net profit after tax, depreciation and other offsets was $2 million, an increase of $1.3 million on the previous year.

Source: The Shout, 11 October 2013