JW Lees managing director William Lees-Jones has said the 2017 financial year laid the foundations for the next chapter of the family business.
The company yesterday confirmed turnover for the year to 31 March grew 5.6% to £67.7m, as first revealed by MCA in August.
During the year JW Lees made capital expenditure investments of £10.8m, including the acquisition of six new freehold pubs and hotels – The Bear’s Paw Chester, The Crown Inn Lymm, The Frog & Railway Heaton Moor, The Groes Inn Conwy, The Hanging Gate Weaverham and The Vale Royal Abbey Arms Delamere. Four pubs were sold in the year yielding a small profit of £75,000 and major refurbishments (over £50,000) were carried out at 72 sites including The Boathouse Chester, The Cross Keys in Saddleworth, The Elizabethan Heaton Moor, The Golden Pheasant Plumley, The Gwesty Links Hotel Llandudno, The Jolly Carter in Eccles and The Trearddur Bay Hotel Anglesey.
Because of the increased level of investment, EBITDA fell by £1.1m (11.8%) to £8.2m, with operating profit falling by £869,000 (13.2%) to £5.7m and pre-tax profit (excluding property disposals) falling by £617,000 (10.7%) to £5.1m. However, JW Lees nevertheless paid out £217,000 in profit share to employees.
Lees-Jones said: “2017 has been a year of positive growth for JW Lees and we are laying the foundations for the next chapter of our family business as we approach our 200th anniversary in 2028. We anticipate that short-term profitability will continue to fall slightly this year as a result of business interruption while we again increase our levels of investment in our estate, with our top hotel, The Alderley Edge Hotel, being fully refurbished as well as increased levels of expenditure in both our managed and tenanted pubs. Bedrooms are becoming an increasingly important revenue stream and we now have 211 bedrooms in our managed estate of hotels and inns. We are in the fortunate position of having supportive family shareholders who want to invest in our business for the long term as well as being virtually debt-free. We remain hungry for acquisitions of both Managed and Tenanted pubs as well as hotels in the North West.
“JW Lees remains firmly committed to all of our three trading divisions - Managed Houses, Tenancies and Free Trade as well as vertical integration where we can add value in key service areas like Distribution and Technical Services. We have also been working with branding agency Squad for the last 12 months on repositioning the JW Lees brand as a modern traditional brewer in the face of an increasingly crowded landscape of traditional and new craft breweries and we will be unveiling this new look in November.
“In May 2017 we strengthened our management team with the appointment of David Young as Head of Property: David joined JW Lees from Spirit Pub Company where he had risen to Investments and Facilities Director after starting with Tetley Pub Company as a pub manager 27 years ago in 1990. David will become JW Lees Director of Property from 1st January 2018, which will allow Simon Lees-Jones to focus on new pub acquisitions. Nicola Waring, who joined JW Lees in 2016 from webuyanycar.com when she was hired as the first JW Lees Director of People, has driven People Development at JW Lees and we now have over 50 Assistant Pub Managers and Trainee Chefs at Levels 2, 3 and 4. We believe that by investing in both our brand, properties and people that we are well placed for future growth.”
Speaking to MCA in August, Lees-Jones said: “Our focus has been maximising the potential of our existing estate and that’s what these new hires are geared at. In the last five years we have sold 47 pubs. That has been quite transformational and we now have a good quality base, which we need to keep investing in to stay relevant.
“We are also keen to grow and we have the firepower to do that. We would look at opportunities for managed or tenanted. We have reached the point now where we are only managing quite big pubs – they need to able to do £20,000 a week net.
“We like hotels and accommodation in general. Rooms with character seem to be an area of real growth so we’re keen to keep our hand in there.
“There will be opportunities in all sorts of areas. Rents and rates are going up, NLW having a huge impact. People have got banks breathing down their necks. That will create opportunities for us. We are ready and waiting for when people go bust.”
On the opportunities from casual dining casualties, Lees-Jones said: “There are a lot of crossovers with casual dining so we wouldn’t exclude ourselves from those sites. We have our Duttons concept, which has two sites at the moment, which is close to casual dining. We’re keen to do more of those.”
