Utopia Inns is offering a second share subscription in its enterprise investment scheme (EIS). This EIS aims to provide capital growth by developing pubs initially around the M5 area between Birmingham and Bristol and the M25 area towards London.
The first share offering in August 2001 raised £750,000, which was used to develop a champagne piano bar and brasserie in Birmingham called Bar Ebonay. A new site has been identified in Innovation Square, the financial and business area of Birmingham.
The ultimate target for the EIS is to hold between five and 10 pubs within its portfolio, each with their own individual style. This will be carried out gradually, as suitable sites become available.
The portfolio will span city pubs for business people and restaurant style country pubs in rural areas. When choosing suitable premises, the board will look for established pubs with room for improvement and the ability to trade at a profit.
Pubs were chosen because the breaking up of the large breweries is creating more opportunities to buy pubs and the redevelopment of city centres will ensure there is a continuing demand for unbranded pubs.
This EIS could appeal to entrepreneurial investors looking for the tax advantages of an EIS. However, Tomahawk Pubs, The Capital Pub Company and English Country Inns are similar products, but they are restricted to the M25 area. Utopia Inns spreads its net wider, but finding suitable premises at the right price may still take time. Another drawback is that shares are unlisted, so investors would find it difficult to know how much their investment is worth.