Thu 19th Mar 2015 - Administrator – Marco Pierre White pubs needed focus on revenue and margins Administrator – Marco Pierre White pubs needed focus on revenue and margins: Administrator Alix Partners, formerly known as Zolfo Cooper, has reported that the performance of the Horatio Inns pub estate in Norfolk, in which Marco Pierre White owns 99.92% of the shares, has now been stabilised thanks to what it said was a "renewed focus on revenue and margins". However, the group of three freehold pubs and a leasehold site, described as “fundamentally good businesses”, is likely to leave a shortfall on the £7.4m Horatio Inns owes Clydesdale Bank when its sites are sold. Returns for preferential creditors are expected to be “minimal”. The four-strong portfolio includes the Lifeboat in Thornham, generally regarded as the finest coaching inn on the North Norfolk coast, and with a combined goodwill and freehold book value of around £4.2m, and the Chequers in the same village, which is an Enterprise Inns leasehold site. Its other two properties are the Wayford Bridge, near Stalham, Norfolk and the Acle Bridge Inn, Acle Bridge, Norfolk. The administrator reported that the companies saw disappointing trading over the winter months of 2014/2015 and experienced cashflow difficulties, and could not meet the repayments of the cross-guaranteed debenture held with the bank. It said: “Further, the companies’ management team failed to provide appropriate information to the bank to allow it to gain comfort over the future trading prospects of the business. Absent a suitable proposal from the companies demonstrating they had not only sufficient working capital to continue to trade, but also a plan for making scheduled repayments to it, the bank was concerned as to what was occurring in the businesses, and whether there was sufficient working capital to allow them to continue to trade. The bank was made aware by its legal advisers that winding-up petitions had been issued against certain of the trading entities by a supplier, indicating that the working capital position of the business was worse than previously thought. As a result of the aforementioned winding-up petition, the directors were unable to use their powers to place the companies into administration and therefore requested the bank do so.” Alix Partners said all 126 staff employed by the company have been retained, with a £100,000 overdraft provided by Clydesdale to meet payroll commitments. It said: “It quickly became apparent that there are four fundamentally good businesses operating out of well-maintained assets. [The management services company] Licensed Solutions (LS) has now stabilised the trading positions and, with a renewed focus on revenue and margins, there has been a tangible improvement in performance since the appointment of the administrator. The decision to delay marketing the sites has been to allow LS time to make some improvements to the trading operations and to cement new processes before a sale process is commenced. This has also ensured a period of trading stability post the appointments of the administrator to demonstrate the process has not damaged the trading performance of the business.” The administrator reported that Horatio has made inter-company loans but “given the lack of historical information currently provided to the administrators by the former management team, the administrators have not yet been able to accurately assess the values of these loans. It should be noted that the administrators have been unable to obtain any information regarding the debts due to preferential or unsecured creditors as, to date, the directors and former management team of the companies have not responded to requests for information. The administrators have been unable to obtain any information detailing the level of unsecured debt.” The four pubs traded at an anticipated break-even level in the first month of the administration. A sale process of the outlets is expected to start in the next month.