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Tue 13th Nov 2018 - Daniel Thwaites reports turnover up 4% in first half, chairman to step down
Daniel Thwaites reports turnover up 4% in first half, chairman to step down: North west brewer and retailer Daniel Thwaites has reported turnover increased 4% to £49.9m for the six months ended 30 September 2018, compared with £48.0m the previous year. Operating profit was up 4% to £8.0m, compared with £7.7m the year before. Pre-tax profit was down to £6.4m, compared with £6.8m the previous year. Net debt as of 30 September was £70.2m compared with £60.9m the year before as a result of investments made at the Beverley Arms and its new brewery, offices and stables. Chairman Ann Yerburgh has announced she will step down at the end of the financial year after 18 years, with chief executive Rick Bailey becoming executive chairman. Meanwhile, John Barnes will step down as a non-executive director on 31 December to be replaced by Andrew Stothert, who is chief executive of Brand Vista. The company moved into its new brewery in September. The board recommended an interim dividend of 110p (2017: 110p) to be paid on 3 January 2019 to shareholders on the register on 7 December 2018. Following a tendering process, BDO will take over as auditor from KPMG for the financial year ending 31 March 2019. Yerburgh said: “Our tenanted pubs have had an excellent first half to the year. They are benefiting from sustained investment over a number of years and were well positioned to take advantage of the heatwave experienced over the summer and the World Cup. Once again our average earnings per pub has risen, by 14%, with like for-like turnover up 5% and operating profit up 7%. We have completed 12 investment schemes in the first half of the year, investing £1.7m, and continue to make good returns on our investments. Major refurbishment schemes have been carried out at The Red Lion in Wybunbury; The Millstone in Darwen; The Holcombe Tap in Ramsbottom; and The Queen Anne in Bury. Our inns have also had a good summer, with turnover up 27% and operating profit up 25%. They are also benefiting from investment and their premium positioning and are in fairly robust health. The major investments made last year at The Royal in Heysham; The Crown in Pooley Bridge; The Lister Barn in Malham; The Fleece in Cirencester and The Royal Oak in Keswick have all contributed to this strong performance. We opened The Beverley Arms in July, later than we hoped, but just in time to capture the latter part of the summer trading period. The property has 38 bedrooms, a bar and restaurant as well as a large outside trading space. I am pleased to report strong trading since opening, ahead of expectations and to positive local reviews. We have sold five poor-quality pubs for £1.6m, generating a profit of £0.2m. In the hotels and spas division, sales for the first half of the year have grown 1%, although on a like-for-like basis they have declined 2% due to a softening in corporate demand. Operating profits have decreased 12% year-on-year. We have continued our ongoing refurbishment programme and spent £2.8m in the half year. The current refurbishment programme in our hotels is now largely complete. During the period we undertook a review of the marketing of our inns and hotels, particularly to review how we encourage people to revisit us across a number of different property types. As a result, we have relaunched our properties under a new collective, which we have called The House of Daniel Thwaites. When we sold our free trade business to Marston’s in 2015 we retained our investment in one large free trade account in Blackpool. Over a number of years, we had advanced loans to the business, secured over its freehold assets. Funny Girls comprises a popular cabaret venue, a nightclub and several bars based in the historic art deco Odeon cinema in the heart of the town. It is an iconic part of Blackpool’s nightlife. In September administrators were appointed to the business, which is now being marketed for sale. Since administration we have been operating the business under licence, which may or may not become a longer-term arrangement depending on the outcome of the sale process. While it is our preference a new owner be found to take the business forward, equally we are ready do so under our own stewardship should that be required. We expect the position will be clearer by the end of the financial year. The company is in good shape following a prolonged period of investment and our financial results have moved forward in a challenging market. Our pubs, inns and hotels are now in a strong position to weather any further changes in the market. There is no doubt the second half of this year will be a challenge, particularly in our hotels business, which is having to absorb cost increases we are struggling to recoup through sales growth. While I firmly believe our business is in a strong position to move forward we face challenges to our trade, which are almost exclusively politically induced. For the time being our focus must move to making the most of our assets and tightening our operational performance. We expect continued volatility and uncertainty in the negotiations around Brexit, so we maintain a cautious outlook and will be watchful.”


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