Heartstone Inns, the chain of freehold food-led country pubs formed by ex-Refresh UK colleagues Stuart Hawthorn and James Birch, has reported a rise in turnover for the year to 31 December 2011 across its two vehicles.
The original Heartstone Inns, which operates five freehold pubs, saw turnover increase by 6% to £3.42m during the year, while pre-tax losses narrowed from £234.4k to £225.5.
The group said it continued to benefit from refurbishment projects completed in prior years and from improvements in purchasing and operations, which resulted in its sites trading profitably before central costs during the year. It achieved gross margins of 64.8%, direct staff costs of 34% and pub profits of 15.8% of sales.
EBITDA decreased by just under £5.7k to £296.8k, a margin of 8.7% over sales.
The group invested £178.9k across its estate during the year. It recently completed the extensive development of its Hare & Hounds site in Devon, with funding secured through a new loan facility from HSBC and from the issue of new preference share capital.
The company said that it believed the “quality, trading style and location” of the group’s sites put it in a string position to meet the challenges of the current market, the local competition, the ongoing impact of legislative changes and the continued pressure on direct costs and overheads.
The four-strong Heartstone Inns 2, in which Heartstone Inns has an investment of £50k, saw turnover grow by £1.47m during the year to £2.2m, with EBITDA increasing by £56.5k to £118.7k.
The group raised funds if £1.65m during the year through the Enterprise Investment Scheme (EIS), which couple with further debt finance of £940k enabled it to purchase the Walhampton Arms in Hampshire.
Since the year end a further £515.4k which will be used for future acquisitions and capital investments.
The group said that it traded in line with expectations during the period, achieving gross margins of 66%, direct staff costs of 31% and pub profits of 13.4% of sales.
The company said it was in a strong cash position to meet the challenges of the current market and ended the year with cash resources of £715.4k and undrawn banking facilities of £305k after having invested a total of £1.7, in its estate.
