Upham Group has said it is a strong financial position following the take-up of support offered during the pandemic, including a £1.4m CBIL, and a restructure of its operations, and is keen to impress its investors as it eyes expansion.

In its accounts for the for the full year to 31 March 2020, the 15-strong Hampshire-based pub group said it was able to drawdown £1.3m from its existing HSBC rolling credit facility in order to cover immediate cash requirements, while support available under the Coronavirus Job Retention Scheme and rate grants were maximised.

A further £1.4m loan was secured under the Coronavirus Business Interruption Loan Scheme in July, it said. This support combined with the announced in the recent Budget, including the extension of the furlough scheme and the reduction in VAT has put the group in a strong position with a healthy cash balance, it said.

Upham said that trading between July and October last year had been very encouraging, with sales down only 8% on the prior year despite the social distancing measures in place. In addition the combination of a repositioned offer, the VAT reduction and 100% rate relief meant that EBITDA was up more than £400k on the comparable period in 2019, from £235k to £650k, it said.

Since the year end the business has been focused on a major turnaround plan and believes that it will be reopening this spring with “a significantly enhanced business”. The plan has incorporated changes to its food and drink offer, marketing and supply chain, while it has also developed its pubs with rooms offer under a new sub brand called ‘Charming Bedrooms’.

“The business has been segmented between premium village inns and suburban sites, with a more structured offer designed to suit each segment,” managing director David Butcher told MCA.

“New menus and a full review of the drinks range has enabled us to drive sales and offer appeal, together with a full supplier review to improve product quality and enhance margin. Tighter operational disciplines have been instilled to support pub practices and improve sales conversion.”

Over the past year the business has invested £750k in site renovations, predominately at some of its larger sites – namely the Old Mill, near Lymington in the New Forest, which it has repositioned from a traditional hotel restaurant and wedding venue to a modern riverside pub, said Butcher.

“We are also trialling new formats to enhance the potential of our suburban locations, which we plan to launch in early summer,” he added.

Butcher said the priority was to deliver the results of its key refurbishment projects, but that is also keen to expand. “We do not want to take our eye off the ball of completing our initial business transformation to demonstrate to our investors the strong potential of this business. But we do have several opportunities under review and have ambitious plans for expansion in the coming months and years,” he explained.

Within the accounting period, the pub company sold the freeholds of 13 of its sites to CBREGI, generating net proceeds of £19.7m. Butcher said that while the business successfully renegotiated a 150-year sale and leaseback of its pub assets, “it was at the expense of a focus on our short-term trading performance”.

As a consequence it restructured its leadership team during the autumn 2019, including the appointment of Kevin Todd – now executive chairman, as well as key changes to its management team, and experienced a steady recovery of its like-for-like sales until the pandemic struck.

Sales were down 9.2% to £14.2m for the 52 weeks to 31 March 2020, on a like-for-like basis, with a loss before tax of £1.5m.

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