Amber Taverns is open to new equity investment and acquiring packages of pubs should the right opportunities arise, CEO James Baer tells MCA.
The community wet-led pub operator has been self-funded so far, growing to 165 pubs, with plans for 14-16 new openings this year.
Baer says the value-led pub company, which is run under an operator-managed model, is alive to opportunities when it comes to investment.
“Our backers, both lenders and shareholders, are supportive. So if it’s the right thing to do to bring in fresh equity, we will do that,” he explains.
“The key for us, is obviously there has to be a plan, and we would like to grow by 12, 14, 16, 18 pubs a year - but the most important thing is to get the right pubs.”
Having grown organically so far, Amber Taverns is “absolutely” open to package deals.
“We have a solid pipeline. We have a solid track record. That’s the core of what we do. If there’s an opportunity on a larger scale, then we look at that and consider that.
“It isn’t just about expanding, it is about keeping the core offer relevant, well-invested in good value, because that’s what generates the cash to fund the expansion.”
The company is 100% freehold, but has cultivated a good reputation among property agents as a reliably buyer.
“When we agree a price with a vendor, we don’t mess around. We complete quickly. The funds are there, we negotiate hard but once that negotiation is concluded, we don’t play games. That gets us a good reputation”
The external climate, with high street retail struggling and interest rates high, is also playing into Amber’s favour as it acquires new sites, which include former shop units.
“People with empty properties 18 months ago, who thought they’ll just tough it out, are suddenly finding that if they owe money on those empty sites, there’s a lot more pain. They are being more realistic in asking prices for those properties.
“The high street retail backdrop, plus elevated interest rates, has helped us in terms of acquisitions.”
Baer was speaking to MCA following a trading update for the 53 weeks to 5 February 2023, which saw a 70% increase in sales to £95.7m (2022: £56.2m).
EBITDA was up to £22.5m (2022: £14.2m) and operating profit was £15.8m (2022: £7.9m).
The momentum has continued in the year to date with double-digit like-for-like sales growth.
Last weekend was the first week the pub estate was down on a like-for-like basis, due to it being the anniversary of the Queen’s funeral.
The strong numbers are testament to Amber’s simple but effective offering, Bear says.
“We’ve invested in the estate, we’re offering good prices, we create a decent drinking environment for the customers to enjoy those prices in, that’s critical.
“It’s never just about great value prices for drinks. It has to be about a decent, comfortable, interesting environment for people to make the effort to visit the pubs.”
Amber has made some modest increases in prices, but these have been managed sensitively, and the cost of a pint is often in the region of £2.50.
“I think we’ve done it sensibly. The consumer is aware of inflation, clearly. They accept the prices have to go up, but they want to feel that they are getting something back, not skimping on things like maintenance, big screen for sports and entertainment.
“Customers are sensible. They just want to feel that with their squeezed pound they are getting a good deal.
While other operators also have an offer focussed on value, Baer reiterates the importance of making it affordable during a cost-of-living crisis.
“It’s very important that we offer something that’s obtainable and available every day at a sensible price. It should never become a luxury, it must never become overly aspirational.
“Going to the pub should be enjoyable and available to people every day. It should be part of people’s daily lives and that creates the community atmosphere in the pub, which then makes a successful venue.”
