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<p>&quot;I am indeed the beneficiary and sole director of Harcourt Investments Ltd.</p>

<p>Harcourt Investments Ltd purchased the management agreement from Ducalian Capital Ltd. No approval was required from Harcourt Pub Ltd or indeed shareholders of Harcourt Pub Ltd for the assignment / novation.</p>

<p>I led the purchase of the Harcourt Pub when I was at Ducalian and given Ducalian&rsquo;s lack of experience in the sector at the time the directors decided to employ a third party operator (Sansar) to carry out the refurbishment and subsequent operation.</p>

<p>As the portfolio of pubs overseen by Ducalian grew it was prudent to put its own operating team together to provide a head office function. Sansar it turns out lacked the skillset to deliver the business from an operational perspective.</p>

<p>Over the last 12-18 months we have sought legal advice to terminate the Sansar agreement but the advice is that its impossible without agreeing a payoff. Sansar wanted to be paid a premium for termination which was refused and given the current shareholder mood it was absolutely the right call to make.&quot;</p>

<p>The Harcourt became an events space with a Scandinavian restaurant at the front with the bulk of operating profit generated in December. Location is very tough without a solid drinking crowd and destination diners and given the growing success of other pubs within the group, of which I am also a director of, I have a good idea of what makes them work.</p>

<p>In the absence of an operating team the GM had full autonomy and his team was creating an unsustainable toxic environment and the head chef was about to leave in January this year before the GM handed in his notice. Unfortunately the GM had a wealthy friend who drank and ate in the pub and spent c&pound;5-6k pcm &ndash; however this wasn&rsquo;t sustainable for obvious reasons and promptly ceased. Anyone with kitchen experience will know that the kitchen at the Harcourt is not the best working environment and so you need to retain chefs. Furthermore, anyone who has managerial experience of food-led pub groups knows the importance of a chef director to recruit and retain staff particularly in this challenging environment.</p>

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<p>The events and PDR coordinator went on maternity leave earlier this year and in fact mentally checked out prior to this and given the reliance on events there was a big drop in events and hence revenue.</p>

<p>It is purely coincidental that the split between Ducalian happened at the same time as a move away from a Scandinavian restaurant with event space to a pub with dining room and events space &ndash; in line with the other group pubs &ndash; as this was planned anyway regardless of the split.</p>

<p>The head office cost contribution goes towards everything from PR and digital marketing consultants, chef director salary, head of operations, HR consultants, project and marketing coordinator, events &amp; PDR management &amp; personnel, in-house maintenance, team building, staff training, recruitment, management software. I can assure you that &pound;4k pcm contribution barely even touches the sides let alone makes a profit so the idea that &pound;4k is going straight into my pocket is nonsense to say the least.&nbsp;</p>

<p>For example I am reviewing group PR consultants and met two F&amp;B focused PR consultants today at the Harcourt with a view to making that site a priority, however, I will have to divert their attention elsewhere if shareholders aren&rsquo;t willing to make a contribution towards their cost.</p>

<p>This is before you look at group purchasing to achieve economies of scale. &nbsp;</p>

<p>Without any of this the Harcourt is just bricks and mortar. You take the operational infrastructure away from the Harcourt and certainly the current team would leave and so uncomfortable decisions would need to be made as to whether its viable as a going concern and should be closed.</p>

<p>In any case, and given you and your fellow shareholder group (as you have suggested) are openly talking about removing the current directors and all operational infrastructure then its sensible now to look at exit options.&nbsp;</p>

<p>I will likely be calling a shareholder meeting in January 2020 to present exit options.</p>

<p>Regards,</p>

<p>James</p>

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