Shareholder update

Shareholder Meeting

Saturday 21st November 2015 at 16:00

We covered a lot of ground together on the 21st, and several shareholders who could not attend asked for a précis; I have summarised the main points below for all, and trust my notes are accurate.

The objective of the meeting was to update shareholders on our financial position, development plans, progress in raising funds, and the in the condition of the tenant’s lease.

Trading Statement:

Alan presented the latest position where we are on track with the original business plan, however the last few months have been just under forecast.  Overall the cash position is strong and signs are of a return to original budget over the Christmas period.  To be adhering to a plan made several years ago demonstrates the granularity that defined the original concept and we should be heartened that the pub is open and performing.  No issues of governance have been noted and our insurers, original fund-providers, and mortgager feel the business is in good hands.

Grant Funding:

Alan also summarised the size and the committee’s positive feelings on the likelihood of being awarded considerable sums from the three grants we have applied for.  Pledges and bursaries are approaching £20K, and all of the committee are committed, having pledged funds and/or considerable professional time.  Later in the meeting John gave a walk-through of the new website designed as a landing for potential grant-providers and out-of-village share purchasers, this has been instigated to show a fully professional and serious approach and will be further developed in time, especially when we open our crowd-funding site.  The site is at http://toppesfieldcommunitypub.com/ and is purposefully separate from the Green Man website operated by the tenant’s business.  At the recent official Brewery opening our success as a village in developing our assets was noted by several grant funding bodies.

Under this heading we should also note that the Share Issue is open, payment together with the application form should be sent to us at the following address:  Toppesfield Stores, Church Lane, Toppesfield, Essex, CO9 4DR

I am sure shares would make an excellent Christmas present for any of those ‘hard to buy for’ friends and relatives.

Development Plans:

Mary Ann ran through the basis of our grant applications highlighting the main benefits planned, and noting that the applications were made on the basis of the Green Man being “More Than A Pub”.  We are not just in the business of improving our ambience while we drink, but plan on widening the appeal of the building to many groups in the village, formal and informal, and when the work is done the tenant needs to be fully appraised of our requirements of them.

A set of updated drawings depicting the redevelopment plans were viewed; these are not final and there will be opportunity for further comment.

Lease:

The existing lease expires in early December, and contains several clauses which were fine for a pub-owning commercial company, but are not considered appropriate for a community venture, especially one who intends to use its asset for wider purposes.  The major issue being that the lease was subject to the 1954 Landlord and Tenant Act.  This gives a tenant the right of automatic renewal on the same terms (or reasonable alternative); this is something we cannot grant as we are not sure of redevelopment time scales and need to craft a lease that describes well what we expect of the tenant as a community, as well as being something commercially attractive when the building is refreshed. This is a legal minefield for landlord and tenant alike, and breaking the clause can be particularly problematic.

We have spent considerable time and effort in negotiating with the incumbent to agree a short-term lease for the period we expect to lead us up to the re-opening point such that he can then apply for a new lease along with any other applicants who would like a chance to operate our new facility.  We have agreed with him that we will include him in the development plans, whilst allowing relatively short notice periods.

It was asked whether we could have ended the lease and appointed a short-term tenant or even staffed the pub with volunteers, and this was considered if the short-term lease was not palatable to our tenant, but rejected as we do not have a commercial proposition for a new landlord nor the time to organise schedules; in any case the tenant was willing to accept the lease conditions.

This removes risk from TCP in a more formal approach to change the lease, is acceptable to our tenant, keeps our revenue and cash production intact, and ensures that we avoid any issues with EIS or VAT etc that might stem from a change in the balance of our revenue streams.  As pushing for a formal change in the lease may also have caused considerable financial burden on the tenant it is also a more favourable way of conducting ourselves in the eyes of current and potential grant funders; we are after all a community organisation. The new short-term lease is now fully signed, completed, and operating.

All it remained for me to do is to thank the committee for their diligence throughout a busy year of grant and lease negotiations, and to thank the shareholders for their understanding in this.  As you can imagine, we all then went to the pub to conclude discussions.

To remind you, the Share Offer is now open, cheques and application forms can be delivered to TCP via the village shop.  Should you have lost your application and prospectus I attach a dated version.  Shares make good Christmas presents!

Posted in Public Meetings

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