STEVE Graham has been involved in the Scottish licensed trade long enough to know the next big drama is never far away. It is an awareness which has perhaps informed how his Manorview Hotels have evolved more than any other.

The company, formed by Mr Graham in 2007, comprises an eclectic mix of boutique hotels, wedding venues, nightclubs and community pubs, based across central Scotland.

It specialises in reviving previously distressed properties, making a virtue of diversity in an industry which has seen its fair share of watershed moments in the last decade.

The latest was December’s reduction in the legal drink-drive limit, which some commentators fear will have as dramatic an impact on the licensed trade as the smoking ban nine years ago.

Thanks to the breadth of its portfolio, which allows it to yield revenue streams from myriad markets, Manorview has been able to absorb the change.

“I would say it’s had an effect, but Manorview as a company has been fortunate to have all the income streams,” Mr Graham said.

“All we do is adapt and push more on functions and try and work a bit harder to bring in more corporate business. The diversity of the company allows us to do that.”

He added: “If we just had a full portfolio of wet-led pubs we could be down as much as 15, 20 per cent and that really would set alarm bells ringing.”

Manorview is not just counting on the diversity of its operations to mitigate the change to the legal drink-drive limit. Mr Graham believes the industry itself will learn to adapt, much in the way it responded to the ban on smoking in public places when it became law in March 2006.

“People will come up with different ideas and ways (to deal with it),” he said. “And I think the public will become better educated as to what it actually means to have 50mg of alcohol in your blood as opposed to 80mg. It doesn’t mean to say you can’t drink the night before, it just means you can’t drink as much.”

Mr Graham moved into the industry in 2002, having spent the early part of his career in his family’s historic fairground business. His first venture into the licensed trade came when he bought shares in Centrepoint Venues – a bar and nightclub – in Coatbridge.

Mr Graham said: “I’d been helping out in the family business from a young age and my involvement in the business grew from there. I had some success and at the age of 30, I decided on a career change into property development and started out purchasing, developing, and letting various properties.

“After several years in property development, I was looking for a fresh challenge and the move into licensed commercial properties seemed a natural progression.”

Mr Graham helms the family-owned Manorview with two fellow directors: property development director Anthony Cowley and operations director Fallon Cowley.

Fallon is Mr Cowley’s wife and Mr Graham’s niece.

There is also a prominent role in the company, which employs around 400 staff, for son Carlton, who has been working full-time with the business since leaving school.

Manorview’s properties include The Busby Hotel in East Renfrewshire, launched in November following a £2.6 million refurbishment, wedding venue the Lynnhurst Hotel in Johnstone, and the Bowfield Hotel in Howwood, whose spa and leisure club has a large number of members.

It includes a clutch of traditional bars and nightclubs, as well as the nascent Manorview Pub Partnership – a growing pub leasing division which now numbers four freehold bars leased out.

Graham and his team are constantly assessing acquisition opportunities, but there is a high attrition rate: only four of the 24 outlets considered for the pub partnership were bought. “We want to grow the company, but we want the quality to come with the quantity,” he said.

The most up to date financial information for Manorview suggests the strategy is working.

The group lifted turnover by 12 per cent to more than £9m in the year ended March 31, while operating profit rose by 15 per cent to £1.23m.

While the six-strong property portfolio is diverse, Mr Graham said the growth is currently being powered by its hotel developments.

Its latest project is Boclair House in Bearsden, where work is underway to convert the sandstone former council building into a boutique hotel and wedding destination.

The building is being jointly developed with Westpoint Homes, which has split the property’s title with Manorview and is building nine homes at the back of the site.

The two projects are separate, with each having its own access and egress points.

Manorview acquired the original building, where it is developing 12 suites, from the local council.

It will largely be used for weddings, although the property will include a bar and restaurant for the wider public.

Mr Graham said work at the £2m Boclair House is progressing well but revealed he has pulled back on the pace of development in order to control costs and limit the short-term financial impact on the rest of the business. Bookings are already being taken for weddings next year.

“We are planning opening early in 2016,” he said.

“We could probably open sooner than that, but because of other projects we have got on the go and cash flow and for operational reasons we have decided just to slow the project up slightly, but not to the point it is going to be detrimental to the business. It’s a really exciting project and we are pleased with how it is coming together.”

While hotel development has long been a feature of the company’s operation, a newer strand to the business is its bar leasing division.

The Manorview Pub Partnership is headed by Mark Hannah, who came on board from Belhaven.

Under the model, tenants buy into central services such as marketing, training and accounting from the parent company. The lease terms vary, ranging from five to 15 years, and in some cases the tenant will ultimately be given the opportunity to buy the property outright.

“If the tenant is running a good ship and enjoying it, and we feel as though it is the right thing to do we are giving the tenant the option to buy the property from us,” Mr Graham said.“It’s a real partnership – that’s the point.”

Mr Graham revealed the company has a growing database of potential tenants who remain keen to enter the industry in spite of its challenges. He said banks are once more open for business – in the right circumstances.

Manorview recently restructured its debt with Barclays, with Mr Graham stating that the bank has been very supportive of its business model.

He also noted that an unnamed bank has expressed interest in supporting the Manorview Pub Partnership, which until now has been funded from the company’s own cash flow.

“I’ve seen a huge of amount of interest in the licensed trade from all of the banks,” he said. “As long as you have got all of your information and the loan-to-value and serviceability stacks up, the banks are there to lend money again.”

He added: “The banks have certainly loosened up and it’s a lot more competitive now.”

The criticism over the way some of the major pub companies have structured tenancy deals recently led to legislation being passed in England to address some of the biggest concerns. That will pave the way for the beer tie to be scrapped south of the Border.

The controversial mechanism, which is common to many pubco-tenant contracts, dictates that the tenant must buy their beer from their landlord, often at prices significantly higher than those available on the open market.

A coalition of brewers and pub interests is pushing for similar moves in Scotland. But Mr Graham was at pains to highlight that the model operated by Manorview is different.

“What I would say is that the biggest difference is that we are just very fair on the discount,” he explained. “Rather than us trying to squeeze the life out of every keg of beer or case of alcohol we deliver to our partners, we are working hard to make sure they are making a margin, and giving them as much discount as we can while making a return on our investment.

“I’d be lying if I said they can buy their beer from wherever they like. They do buy it from us. The difference is we are not being greedy.

“There is no point in calling it a pub partnership if one side of the partnership is not getting the right tools and not getting the right service to run their business.”

Mr Graham signalled the company’s interest in expanding the pub partnership business, but noted that hotels continue to offer the most attractive investment opportunity.

“I do have a favoured option and that is the hotels – I like the different income streams that they generate. But all in all I like having a mixed bag as well. I like the fact we have got all of our risks spread across the board – it is not all in one sector.

“It gives you cover because when one thing is quiet another part of the business can be busy.”