Admiral Taverns, the UK’s number one community pub group, has announced strong results for the 52 weeks ending 30 May 2015, delivering absolute growth in turnover, operating profit and EBITDA for the first time in eight years.
Outlook
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%. Admiral 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 described as “in excellent health” and looking forward to 2016 with confidence.
Key Highlights
- 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.”
Overview
The Group’s strong performance over the period has been driven by a continued focus on the core three business objectives: 1) improving the operational performance from the 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
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 the pubs and the overall improvement of the estate. Over recent years, tripled the amount of money invested in the estate and this evidences not only the commitment to licensees in supporting them to develop their businesses but also to ensuring the long term quality of the estate.
During the period, continued to develop the support and training programmes offered to licensees. Highlights for the year included the launch of the Group’s new Business Support Agreement (“BSA”), 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.
July also saw the unveiling of the Advanced Business Development Programme (“ABDP”) targeting leading licensees who are typically at least 12 – 18 months into their relationship with Admiral. The ABDP is designed to address the challenge of how successful licensees unlock further sale or profit growth from their business.
2. Select disposal of unsustainable pubs
The disposal programme, put in place as part of the turnaround strategy five years ago, is now drawing to a natural conclusion and Admiral anticipate it will be completed in the new financial year. On completion Admiral will have an estate of 858 core pubs representing a 12% increase in the 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 Admiral was 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 the commitment to developing the business further and reinforcing its position as the country’s leading community pub group.
The initial integration was completed smoothly with every pub and licensee receiving a handover visit.