McManus Pub Group, the 18-strong Northampton-based pub operator, is looking at several potential new acquisitions as it reports an improvement in earnings and like-for-like sales, M&C Report has learnt.
The company, which is also set to examine its funding options for expansion, saw EBITDA rise 2.2% to £1.6m in the year to 27 April, with pub profit contribution marginally up at £2.2m. Total GP increased from 70.9% to 71.2% after the firm improved trading terms with key suppliers - food GPs moved from 65.7% to 66.1% and wet GPs from 71.5% to 71.7%.
Like-for-like sales were level with last year. However, since the year end like-for-likes have grown by 6.1%, with growth driven by an “improved food offer” - food sales are up 15.7% on the prior year, with food at 26.6% of total sales.
Commercial director Chris Wright told M&C Report: “Last year was more about having a level playing field from a sales point of view but we squeezed a bit tighter, squeezed our cost control and got an improved EBITDA that way.
“This year the focus is on maintaining that cost control but we will now start to look at business building initiatives and building on the gain in the economy.”
Initiatives include encouraging groups of drinkers to buy food and increasing spend per head for diners by, for example, selling more desserts. McManus also started rolling out its loyalty card scheme in September and so far c3,600 people have signed up - the group is targeting 7,000 within one year.
McManus also linked the rise in GP to removing Two for One menu offers and replacing them with deals such as Two for £12 and Two for £15.
Turnover in the year to 27 April fell by £321k to £10.9m after the company exited a leasehold pub, the Punch & Judy in Northampton. Group operating profit fell from £120k to £1.1m after a change in its depreciation policy led to a depreciation charge of £155k more than last year.
The group also increased its investment in its pubs in the year, with £625k spent on capex and maintenance spend.
McManus said it was looking for freehold and leasehold opportunities. “We’re looking at several at the moment,” said Wright. “They range from trading leaseholds, new development leaseholds, and freehold opportunities. It’s at the early stages.”
Its main funding agreement comes up for renewal on 14 November. Wright said: “At that point the aim is to get a funding deal with a funder that gives us more opportunities to expand the business. Now we are coming out of the recession it’s a fair time to look at pub opportunities. Asset values are good at a commercial level and if you put a right offer in a site there are opportunities to make money.”
McManus would look for high street debt funding rather than selling an equity stake, he said.
