Pub chain founded by former Greene King boss calls in administrators

A pub chain founded by the former boss of Greene King has called in administrators as the hospitality industry reels from the cost-of-living crisis and a soaring minimum wage bill.

RedCat Pub Company said it has hired Interpath Advisory to put part of its business into administration as it seeks to dispose of underperforming sites. It is also exploring the sale of a further 14 sites.

The company, which was founded in 2021 by the former Greene King chief executive Rooney Anand, has expanded rapidly since by buying sites from rivals such as Slug & Lettuce owner Stonegate. It now has around 100 pubs and pub hotels, with 1,400 bedrooms.

Its expansion has been fuelled by backing from Oaktree Capital, a California-based asset manager run by billionaire investor Howard Marks, which manages $172bn (£136.1bn) of assets.

However, RedCat has since suffered as the hospitality sector grapples with the cost-of-living crisis, high energy prices and inflationary pressures.

Interpath said on Thursday that RedCat Leased Pubs (RCLP), a division of the company which owns 10 sites, has gone into administration, leading to the closure of five sites. The subsidiary does not have any employees, RedCat said.

Nick Holloway, joint administrator, said: “RCLP comprises a group of pub sites in prominent locations, predominantly in London and the South East. Financial challenges have weighed heavily on the company in recent years which rendered it unable to continue in its current form.

“The administration now provides a period in which we can undertake a marketing process to explore a sale of business and assets of the pubs, either individually or as a group. We expect interest from across the industry. Regrettably, the financial position of the business means that five sites have now closed.”

Pre-tax losses at RedCat Leased Pubs ballooned from £1.5m in 2022 to £6.6m last year, its latest accounts show. It had £9.4m of short-term debt as of April 2023.

The company faced higher staff costs last year, after more than doubling its number of employees from 110 people to 267, while the costs of wages, National Insurance and pensions jumped 70pc to £1.76m.

RedCat Leased Pubs is ultimately controlled by an investment fund managed by Oaktree Capital.

Richard Lewis, chief executive of RedCat Pub Company, said: “Some difficult but decisive actions have had to be made to position the business for future success.”

The company said the administration is an “isolated action” with no further impact on the RedCat or its Coaching Inn Group estate.