Admiral Taverns, the UK’s number one community pub group, is delighted to announce strong results for the 52 weeks ending 30 May 2015 (“the period”), delivering absolute growth in turnover, operating profit and EBITDA for the first time in eight years.
•Turnover up 2.2% to £78.4m (2014: £76.7m)
•Operating profit up 82.4% to £24.9m (2014: £13.6m)
•Underlying EBITDA up 5.3% to £24.9m (£23.6m)
•Underlying profit after tax up by 13.7% to £11.6m (2014: £10.2m)
•Like for like income and EBITDA both up 1.9%
•EBITDA per pub up 9%
•Acquisition and successful integration of 111 pubs from Heineken UK
•Successful launch of new Business Support Agreement and Advanced Business Development Programme to support licensees
Kevin Georgel, CEO of Admiral Taverns commented:
“The last six years marks a transformational period for Admiral Taverns. Following a restructuring of the businesses in 2009, the Group’s management team was strengthened and a new strategy outlined to develop and maintain a sustainable, well invested estate of freehold pubs at the heart of their local communities.
I am delighted to report that in the year to 30 May 2015 the Group delivered absolute growth in Turnover, Operating Profit and EBITDA for the first time in eight years and I would like to thank all our team and our licensees for their hard work and dedication. This demonstrates a very strong performance in what remains a challenging market place. Our strategy has remained unapologetically consistent and, despite the challenges presented to the industry by impending Government legislation, we remain passionately committed to being the best operator of wet-led community pubs in the sector.”
The Group’s strong performance over the period has been driven by a continued focus on our core three business objectives: 1) improving the operational performance from our core estate of pubs; 2) select disposal of unsustainable pubs (these being unsustainable for both the pub company and licensee); and 3) to build and develop a team and organisation to deliver strategic growth opportunities.
1.Strong operational performance across the estate
All of our pubs and the licensees that run them are unique. This is why our approach is tailored to the needs of each individual business and aims to successfully maximise the potential of every pub as well as work with and develop talented people and invest in and support our pub businesses.
We delivered a strong performance across the estate, with like for like income growth and EBITDA growth both up 1.9% respectively. EBITDA per pub increased by 9% for the period. This reflects the continued operational improvements being made across our pubs and the overall improvement of our estate. Over recent years we have tripled the amount of money invested in our estate and this evidences not only our commitment to our licensees in supporting them to develop their businesses but also to ensuring the long term quality of our estate.
During the period we continued to develop the support and training programmes we offer our licensees. Highlights for the year included the launch of the Group’s new Business Support Agreement (“BSA”) which evolves the way we work with our new licensees, providing them with bespoke training programmes, access to business insights from a range of industry experts and an unrivalled opportunity to work more closely with them on the financial management and planning elements of their business. The BSA is designed to be a gateway agreement, helping new licensees through the very critical time when they first take over a pub and providing extra support in crucial areas.
July also saw the unveiling of our Advanced Business Development Programme (“ABDP”) targeting our leading licensees who are typically at least 12 – 18 months into their relationship with us. The ABDP is designed to address the challenge of how successful licensees unlock further sale or profit growth from their business.
The success of our approach is underpinned by the strength of the people we have within our business and their ‘can do’ approach. Over the course of the year we invested heavily in training and development to ensure all our people can perform to the very best of their ability, supporting Admiral Taverns as the business continues to grow.
2.Select disposal of unsustainable pubs
The disposal programme, put in place as part of our turnaround strategy five years ago, is now drawing to a natural conclusion and we would anticipate it will be completed in the new financial year. On completion we will have an estate of 858 core pubs representing a 12% increase in our core estate since the previous year end, providing an excellent platform for long term growth.
3.Build and develop a team and organisation to deliver strategic growth opportunities.
During the course of the year we were pleased to announce the acquisition of 111 pubs from Heineken UK (“HUK”) from its Star Pubs & Bars business. These high quality pubs are a great addition to the Admiral estate, demonstrating our commitment to developing our business further and reinforcing our position as the country’s leading community pub group.
We are delighted with the progress that has been made with these pubs since the acquisition. The initial integration was completed smoothly with every pub and licensee receiving a handover visit. We are confident that Admiral can help these licensees to maximise the potential of their business and we are encouraged by the opportunities we have already found to enhance the performance of the pubs. We expect to invest around £2m of capital expenditure in these properties during the first eighteen months of ownership and have already seen some excellent results of the joint investments made with our licensees.
This positive momentum has continued into the current financial year and trading since the year end has been strong and in line with expectations with like for like income for the 22 weeks to 31 October 2015 up 1.8%. Our pubs are at the heart of their local communities and have continued to benefit from strong levels of customer loyalty over the summer months and into the autumn, with their performances being remarkably resilient.
Overall Admiral Taverns is in excellent health and we look forward to 2016 with confidence.