Thwaites, the Lancashire-based pub operator, has said disposals and the sale of part of its brewing business to Marston’s during the year to 31 March has left a “slimmed down, high quality” estate primed for growth.
The company reported a year-on-year fall in turnover for the period – from £137.6m to £84.6m – but saw turnover in its pub estate increase 3%, despite ending the year with a net reduction of 18 pubs (to 285). Average EBITDA per pub was up 12% during the year.
Following the sale of the Beer Co, Thwaites restructured its head office “to reflect the simplified nature of the company” and also undertook a detailed review into reward and remuneration. The company said this had led to it “moving away from being a minimum wage employer” as well as improving employee benefits. The review also took in how the simplification of the business was communicated through branding and customer messaging.
Thwaites acquired five new sites during the year. Three were purchased in the first half of the year - The Crown at Pooley Bridge, The Royal at Heysham and The Boot and Shoe, Lancaster. In the second half of the year the Beverley Arms in the East Riding of Yorkshire and a large derelict building close to The Lister Arms, Malham, were acquired. Both will be added to the Inns of Character.
In January 2016 the company was granted planning permission for a 54-bedroom lodge adjoining the Parsons Collar pub in Fareham, adjacent to the Solent Hotel & Spa.
On the outlook for the year, the company said there had been some headwinds, with the early easter and poor weather but that signs of increased consumer confidence had persisted.
In the pubs business the company said its strategy remained to invest alongside proven operators in focussing high quality food offers and, where possible, the development and refurbishment of bedrooms.
The company said there had also been investment into the drinks offer, which had seen growth in wines, spirits and soft drinks sales of 13%, compared to 7% last year. It said in comparison beer sales had declined marginally – a consistent trend over recent years.
Thwaites said it had continued to focus on managing tenant relations and as a result had reduced the number of pubs requiring new operators to nine properties – 3% of the pub estate.
The sale of 20 bottom end pubs during the year resulted in a net loss of £200,000 after disposal costs.
The Inns of Character estate currently stands at eight, with sales increases across the estate of 11% year-on-year and operating profits up 122%. There are another three sites in the pipeline to open as Inns of Character over the next year.
The six hotels in the estate saw sales increase by 4% but the company said operating profit had been more challenging because of an increase in the proportion of rooms sold through online travel agents, incurring significant commissions.