By Angela Green, Content Executive: Oakman Group grows sales and profits, but concerns persist about inflation and taxation.
The 40-strong pubco, The Oakman Group, has announced its full year figures for Year End 3rd July 2002, as well as revealing commencement of work on two new sites in Ludlow and Gerrards Cross.
Headline figures are:
- Sales up versus prior year by 61% to £54.4m
- Sales versus pre-Covid 2018/19
- Total sales up 55.4%
- LFL sales up 19.9%
- Company sales outperformed the competitor set by 13% during the year (per Coffer Peach)
- Adjusted EBITDA up 49.2% to £5.4m
Director, Dermot King, commented: “As the country emerged from restrictions due to the coronavirus pandemic, the business began the year strongly, supported by the Government extension of a temporary VAT reduction and business rates forgiveness. During the year the number of sites operated by the Group increased from 35 to 38.
“The three new sites are: The Rose Inn, Wokingham, The Grand Junction, Buckingham and The Hesketh Arms, Ruffold. The number of ‘pipeline’ sites increased to five.
“The key Christmas trading period was severely hampered by the prevalence of the Omicron version of the Coronavirus and what effectively became a pre-Christmas lockdown. As Government support measures ended from early 2022, the industry suffered generally from a shortage of workers, and although we were perhaps less affected than others, we limited opening hours and trading capacity.”
The Oakman Group also issued a trading update for the first 38 weeks of FY 2022/23:
- Sales to w/e 25/03/2023 were £50.6m
- Sales versus 2021/22 actual
- Total sales +9%
- LFL sales -1.9%
- Sales versus 2021/22 VAT adjusted.
- Total sales +17.0%
- LFL sales +6.9%
- Sales versus pre-Covid 2018/19
- Total sales +48.6%
- LFL sales +15.3%
Work has commenced on two new sites that will both open in July:
The Journeyman, Gerrards Cross
The George, Ludlow
Oakman Group’s CEO, Peter Borg-Neal, commented: “The continuing strength of our sales performance underlines the compelling attraction of our premium pub business. Following an excellent Christmas trading period, we performed better than expected in January. February and March have been a little softer, versus last year, but we believe that’s weather related and, indeed, in recent days we have been back to strong growth.
“Converting our sales to the level of profit we have planned for has been much more difficult. The pace and intensity of the inflationary pressures that have impacted our sector combined with the increase of VAT to 20% make a pretty toxic mix.
“The VAT on hospitality in the UK needs to be brought down in the way it has been across the rest of Europe. In Ireland it is 9%, in France 10%, in Sweden 10%, in Belgium 6% – I could go on. We were told prior to Brexit that EU regulations were the problem. So why hasn’t this ridiculously onerous pre-profit tax been dealt with?
“Without reform of VAT, the ability of the hospitality sector to invest in growth and contribute to economic recovery will be severely limited. As a sector we need to stop campaigning for short term Government interventions and instead focus on the unfairness of the VAT regime. It is a nonsense that a packaged ready meal from a supermarket is not subject to VAT but a Scotch egg in a pub is.”