Hall & Woodhouse managing director Anthony Woodhouse has told M&C the company is focussed on growing accommodation income, as it reported profit growth in excess of 10% for the third consecutive year.
The company saw total turnover increase by 6.4% to £109.5m for the year to 31 January with profit before tax up 10.5% to £7.8m and operating profit before exceptional items growing by 9.7% to £9.9m.
The group currently operates 53 managed houses, and 142 tenanted pubs.
Woodhouse told M&C he was “quietly confident” that this financial year would again show a strong performance.
He said: “The results should really be seen in the light of our performance over the last four or five years in which we have made real progress in both our managed sites and business partnerships. The profitability of our partners’ pubs have more than doubled in that time.
“Food continues to dominate sales growth but we are also seeing strong sales on the drinks side. Accommodation is an area where we see scope to grow sales. We are currently working on a joint venture with the Duchy of Cornwall to create 20 bedrooms at a new inn in Poundbury and that is a very exciting opportunity. There are opportunities across our estate to add rooms.”
Woodhouse said growth would come across both the tenanted and managed arms but that there was “no drive for a rapid expansion”
On the challenges ahead, Woodhouse said: “The key ones are driving the guest experience and also the increased competition in the market. In recent years we have seen a lot of aggressive rollouts of brands backed by private equity which has had impacts across the market.”
On the introduction of legislation governing the relationship between pub companies and tenants he said: “We would like to think that this won’t affect us because not only are we under the threshold but we have worked hard to establish strong working relationships with our partners. However, as with intervention by Government into any sector it is the unintended consequences that are of concern.”
The company achieved £5.6m through property sales during the financial year as it continued to “redeploy capital out of pubs of the past and into pubs of the future”. This included selling the majority of its residential property at Woodhouse Court in Verwood, Dorset, three of the nine flats it owns at St Georges House, Twickenham and the freehold interest in the Tesco development in Poole.
Capital investment was significantly higher at £16.9m (2014: £10.4m), due to acquisitions and major schemes across its tenanted and managed estates, as well as the ongoing redevelopment of the brewery and offices. The latter will be completed early in 2016. Borrowings increased as a result by £2.2m to £47.3m (2014: £45m). The company had committed facilities in place at the end of the year of £60m.
Chairman Mark Woodhouse said: “We are delighted to have achieved a third consecutive year of strong growth across all divisions. The key is our on-going investment in our teams, our brands and our pubs. Combined with good cost controls, a strong balance sheet and sizeable committed facilities, we are well positioned to meet the challenges facing our industry head-on and to continue to deliver sustainable long-term growth.”