Oakman Inns has reported like-for-like sales up 6.8% in the year to 1 April.
Total revenue grew 22.2%, to £28.3m, with site EBITDA exceeding £5m. Oakman chief executive and founder, Peter Borg-Neal said he believed sales could exceed £37m this year, driven by acquisitions, the expansion of the Beech House brand and the operation of management contracts.
The group updated on its property pipeline, saying deals had been agreed on sites in Epsom, Prestwood, Hatfield and Hampton Hill with a further four sites currently under negotiation. Oakman has also acquired the units next door to the Beech House in Beaconsfield and will be extending and upgrading the site later in the year. It is also seeking planning permission to add substantial hotel blocks to the White Hart in Ampthill and The Akeman Inn in Kingswood.
Borg-Neal said: “We have had an excellent year with significant progress on many fronts. We were delighted with our 6.8% lfl growth, but it is perhaps even more pleasing that our comparables are, at 5.4%, showing the strength of our core estate. This excellent like-for-like sales growth has continued into the new financial year, and we are 5.2% up over the first seven weeks despite rolling over Easter 2017.
“We opened two new sites towards the end of the last financial year, The Beech House in Amersham and The Cherry Tree in Olney, and they have both substantially overperformed against their investment target averaging, respectively, over £49k net and £45k net since opening.
“We also acquired The Anchor in Hullbridge in August of last year and the company intends investing in the site in the coming months. Even without that investment, The Anchor is already averaging over £36k net per week for the year to date. During the year, we also made substantial investments in the refurbishment and extension of two existing sites – The Betsey Wynne in Swanbourne and The Akeman in Tring, both of which are operating at sales levels well in excess of their respective investment targets.”
He said the trading split now stood at 40% drinks, 52% food and 8% rooms and that this was likely to remain broadly the same as the estate grew.
We are still disturbed by the Government’s inflexibility on the matter of business rates
He added: “We believe that this year, Oakman can grow its sales to exceed £37m. This sales increase will derive from the existing portfolio and three main areas of business growth. Firstly, the gradual accumulation of quality sites for the core Oakman Inns business with a preference for freeholds. Secondly, an increased focus on developing and growing the Beech House brand in leasehold sites and finally the operation of management contracts for premium pubs and hotels owned by others.
“Our current estate development activity amply illustrates these three growth sectors. We are opening the Four Alls, our second Hunky Dory development, in Welford-on-Avon on June 1st and this will be followed on July 12th by our opening of The Royal Foresters in Ascot, our most substantial freehold investment to date. The Royal Foresters opening was delayed by the cold, wet weather in late winter and early spring, meaning we missed the Royal Ascot meeting, but we will be open in plenty of time to benefit from the other major summer racing events.”
On external pressures for the industry, Borg-Neal said: “We are still disturbed by the Government’s inflexibility on the matter of business rates, the on-going disparities of VAT and the inept mismanagement and financial impact of the Government’s Apprentice scheme. We do, however, welcome the Government’s eventual support for our campaign to ban straws and our aspiration to ban the consumption of single-use plastics throughout Oakman Inns. These little differences, if made by every company, will help make a world of difference.”
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