A mix of offensive and defensive strategies have enabled Liberation Group to weather some of the storm caused by restrictions last year and see it confident about buoyant trading after lockdown.
In its latest accounts filed at Companies House, the Caledonia-backed business, which operates pubs in the UK and Channel Islands, said the impact of the pandemic on the current fiscal year “has been considerable”. The response from directors had been to develop defensive and offensive strategies to mitigate the impact.
Its offensive strategy included developing an app to enable customers to order at their table and the launch of a new website on reopening from lockdown. It also invested in outdoor seating areas, in order to maximise the space available in its largely rural and countryside located managed pubs, and restructured the senior management and operations team to create distinct Pubs Division and Drinks Division, in order to streamline decision making.
It said these actions “successfully delivered trading, following reopening after lockdown, which exceeded expectations”. The group achieved a more than 87% increase in gross profit for the 13 weeks to 24 October 2020, compared with the same period in 2019. “This swift recovery gives the directors confidence that, despite the continued restrictions in the UK, demand will recover to previous levels once social distancing restrictions are fully lifted,” said the statement from directors.
The group added that a number of trends, which have accelerated in the past year – and which it expects to continue post pandemic – stand to benefit the business directly, such as increasing numbers of people opting for staycations, demand for local produce, outdoor dining and working from home.
The defensive strategy included furloughing colleagues, establishing tax deferment plans with HMRC, successfully claiming under a business interruption insurance policy and negotiating waivers of loan amortisation payments. It said these actions had preserved liquidity such that group net debt at the end of Q3 on 24 October 2020, was lower than at the balance sheet date.
“We consider that our customer facing strategies and efficiency measures developed during lockdown have already enabled us to achieve sales growth post lockdown compared to the same period in the prior year, in selected areas (especially in food sales) and will position our sites to be more profitable in future years than in FY20,” said the group.
For the full year to 25 January 2020, its pubs division achieved sales in its managed and tenanted estate of £16.5m, down from £17.5m the prior year, due to the impact of disposals of two pubs and transfers between the managed and tenanted estates. It generated EBITDA of £2.9m, down from £3m in 2019. While its like-for-like estate of 18 managed pubs grew sales by 4.4% to £653k.
Its drinks and brewing division achieved sales of £12.1m, down from £12.9m the previous year, while EBITDA of £259k, down from £514k in 2019 – this was largely down to the loss of selected free trade customers in the first half of the year.
The business completed the acquisition of 21 pubs from Wadworth in December last year.
Liberation Group optimistic about sales post lockdown
A mix of offensive and defensive strategies have enabled Liberation Group to weather some of the storm caused by restrictions last year and see it confident about buoyant trading after lockdown. The Caledonia-backed business, which operates pubs in the UK and Channel Islands, said the impact of the pandemic on the current fiscal year “has been considerable”. Its offensive strategy included developing an app to enable customers to order at their table and the launch of a new website on reopening from lockdown, as well as investing in outdoor seating areas. It said its combined actions saw post-lockdown trade “exceed expectations”.