Admiral Taverns has the support of its backers Proprium Capital Partners should suitable acquisition opportunities arise, chief executive Chris Jowsey told the delegates at MCA’s Pub Conference this week.
While it’s unlikely the group will look to take on another acquisition in the short term – due to the fact the integration of Hawthorn’s almost 700-strong estate is only just being put to bed – Jowsey said Proprium had “been open and said if we require additional funds to acquire again, we can have them, so that’s not an issue”.
Interviewed on stage by Ed Bedington, editor, The Morning Advertiser, he said the group would always look at opportunities because the nature of how some of its pubs have joined the portfolio means that inevitably some will end up being disposed of.
“Therefore, we are always looking at what else is out there in the market that might fit with our model, and where we could add value.” But Jowsey said he was not interested in buying for the sake of it, only where Admiral could add real value for the licensee, the pub, the group and its investors.
“I think over the next 12-24 months there are going to be lots of opportunities – the key for us would be to make sure we chose the right one, rather than chase several that will be out there,” he added.
‘We are looking to maintain significant levels of investment’
The next 12 months will see Admiral invest around £24m in its pub estate – on par with the circa £25m it has invested over the past year – double what it has historically invested, Jowsey said.
He explained that around a month ago the group had discussed whether it would be right to still invest such a significant amount given all the cost headwinds and the threat of a recession, but it reached the decision that it would.
“Our thinking around that is that investment builds momentum, and confidence, and attracts licensees to the business. We are in a competitive world and we want those good licensees to come and work with us. We want them to believe that we will invest behind them and help them deliver a great local business,” Jowsey explained.
“We are also having an eye to post recession, which is hopefully only 18 months to two years away, and we want our pubs to be in exactly the right position then to capitalise on that post-recession bounce.”
The last year saw Admiral invest in more than 200 projects across its estate, from smaller investments of £30-40k per site, to its largest at £400k. It is currently making its biggest investment yet – around £700k in a pub in Hexham, which is due to open in about two weeks’ time.
“I think we have learned a lot about how to invest, and how to make the most of those investments. Our design is way ahead of where it used to be, and we are seeing the returns that we’d hoped for.”
‘L&T is still the bread and butter of our business’
Jowsey also spoke of how Admiral had combined the best bits of the group and the Hawthorn business during the integration process, including Hawthorn’s operator-led pub business Proper Pubs.
That part of the business was integrated in May and he said the group had been delighted with the performance of Proper Pubs over the last 10 months, and that it had gone from strength to strength.
“We have been investing heavily, in terms of capital, in those pubs, and we have picked up on some of the marketing activity and the capability that they (Hawthorn) had in their team which has brought real benefits to us.”
Jowsey said the addition of the Proper Pubs estate had “kicked us up another level” in terms of its managed operations, with 175 operator-led pubs currently, and plans to increase that to 200 over the next 12 months.
However, as proportion of its 1,600 estate that side of the business is still relatively small, with leased and tenanted still “the bread and butter of our business” he added.
