Heartstone Inns, the Enterprise Investment Scheme (EIS)-backed freehold pub operator, reported a 5.3% year on year increase in sales growth to £6.5m for the 12 months to December 2014 and continued positive like for like sales growth for Q1 2015, managing director James Birch told M&C Report.
The company, which added two pubs to its estate during 2014, achieved pub EBITDA of £1.02m – up 13.2% on the previous year and an increased operating margin of 1.8% year on year to 15.8%.
Birch said the group is planning further acquisitions this year and is in discussions on a number of opportunities to continue growing its estate, which currently stands at 11 sites across southern England.
Heartstone invested £2.2m in its estate over the year including the two newest acquisitions - the Cockhaven Manor in Bishopsteignton, Devon and The Woodborough Inn in Winscombe, Somerset, which completed in November. The group also completed several pub developments including an extensive bar and restaurant extension of the Butchers Arms in Gloucestershire.
The Cockhaven Manor and The Woodborough Inn are due for refurbishment later this year.
Net debt was reduced to £2.05m over the year thanks to the company’s strengthened operating performance, which the company said represents modest gearing of only 13.3%
The company has now reached its EIS fundraising limit and is understood to be talking to investors about a possible IPO, which would value the company at c£13m.
The group plans to expand the current estate to 20-40 pubs across southern England. So far, the acquisitions have all been of individual pubs, but management led by Birch will also consider the purchase of groups of pubs.
Revenue is projected to grow to just under £11m in 2017, with EBITDA at £1.55m.
