Oakman Inns is “at handshakes stage” of securing new funding after a busy period of growth so far this year, MCA has learnt.
The group today announced two new acquisitions and updated on its performance in the first half of the year, in which like-for-like sales grew 4.2% for the 26 weeks to 2 October.
The company is taking on the second site for its Hunky Dory joint venture with Enterprise – the riverside Four Alls in Welford-upon-Avon, Warwickshire. It is also taking on an unlicensed site in Olney, Buckinghamshire in a deal worth £1.5m, with a £1.4m redevelopment planned.
Confirmed acquisitions, including a fourth site for its Beech House format, will take the group to 22 by June 2017.
Chief executive Peter Borg-Neal told MCA that he would consider group deals but did not need to make strategic acquisitions.
He said: “We are used to seeing returns of 30% from our capital investments which you are not going to get when you’re buying a group for 10 X EBITDA. Yes, it means you can accelerate your growth but I’m in no hurry.”
Borg-Neal told MCA that he expected to be able to announce new bank debt by next month, which would fund the next stage of growth.
Oakman Inns also reported that the recently acquired Banyers House in Royston will open to the public on December 2 and is already seeing strong forward bookings.
The first Hunky Dory site, The Beech House in Solihull, which opened in August, is trading well ahead of expectation.
On trading so far this year, Borg-Neal said: “This is a pleasing result in the current environment and the business has also done well regarding key ratios, a reflection of the ongoing benefits of strengthening our operations team over the past year. As a result, we are comfortably ahead of our profit budget for the half year. Whilst we are happy with our sales performance we have seen a degree of volatility in recent months. Much of this can be explained by the variable weather and assorted sporting events. However, there is a general sense of commercial uncertainty and unease. The current trading environment is not for the faint-hearted, but we remain committed to our business plan.”
