Welsh brewer, pub operator and coffee shop operator SA Brain has reported sales growth of 3% in the year to 26 September to £127m.
Underlying profit growth for the period was 7% (£5.6m) and EBITDA grew by 3% to £13.4m.
The group said the performance was driven by “an aggressive programme of Coffee#1 store openings and the continued implementation of a five-year business plan set to further enhance sustainable growth”.
Like-for-like sales at Coffee#1 grew 8.5% with overall sales up 34%. The company said this growth was generated by range development in both food and drink and the opening of 12 new shops, which saw the 50th opened in Fareham in Hampshire in April 2015 and the total increasing to 56 by the end of September 2015. The managed house division saw sales growth of 1.4% during a year in which three previously leased pubs were transferred into the portfolio and the Plum Tree in Cardiff was acquired. Conversely, one business was transferred to the Brains-owned Coffee#1 brand and a further business, Churchill’s Hotel, was sold for residential development.
The company said it had undertaken comprehensive reviews of ranging in both the food and drinks categories across the managed estate, which, paired with benign cost conditions, had seen saw healthy levels of year-on-year margin growth. Investment into the estate was increased by £1m compared to the year before.
Underlying net sales from the group’s estate of leased and tenanted pubs increased by 1% during the year.
The company said: “In response to a rapidly changing pub retail market, a proactive decision was made to close or sell a number of unviable pubs in order to focus new letting agreements on a smaller, higher quality, sustainable estate. Investment in the remaining Leased and Tenanted pubs was again accelerated with maintenance expenditure up £600k versus the prior year, leading to a consistent improvement in performance.”
Sales of the group’s portfolio of beer brands were flat year-on-year across its range of on and off trade customers. A review of the company’s portfolio of beer brands during the year saw resources focused behind the growing cask ale segment of the market and the successful rebrand of The Rev. James, which grew its volume by 40% in the year.
During the year the company successfully refinanced its bank loan facilities through to September 2020 with Lloyds Bank and HSBC Bank each providing £42.5m, part of which will be available to facilitate further expansion of the business.
The company invested in 115 apprenticeships and a number of hospitality-led training programs throughout the year and saw staff turnover improve by over 37% within the company’s Managed House division. A relaunched, performance-led bonus scheme was also implemented for staff throughout the company.
Chairman John Rhys said: “I am pleased to report another year of both sales and profit growth for the Brains business. The last financial year has seen significant investment in our brands, people and properties that have already begun to deliver results. We are fortunate to have a highly dedicated team that remain fully focused on creating outstanding guest experiences, who I would like to take the opportunity to thank for all their hard work.”
Chief Executive Scott Waddington said: “The prospects for the Brains business remain very healthy. We have a portfolio of offers and brands that are enjoyed by our guests and a clear strategy that will see investment in the outstanding portfolio of freehold property that we own, and from which we are confident of generating strong returns on our investment. In the current financial year, Coffee#1 will remain an expansion vehicle for the business, with the necessary infrastructure now in place to accelerate our rate of new openings. Finally, within the cask ale market, with premium ale growing healthily, we are excited by the potential of our portfolio of beer brands. With customers willing to pay a premium for quality beer brands, we will drive availability of our premium ale portfolio within our customer base.”
