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Morning Briefing for pub, restaurant and food wervice operators

Sat 4th May 2019 - Wadworth reveals managed like-for-likes up 2.3% as income from division overtakes tenanted for first time
Wadworth reveals managed like-for-likes up 2.3% as income from division overtakes tenanted for first time: Devizes-based brewer and retailer Wadworth has revealed income from its managed division has overtaken its tenanted arm for the first time. The company saw like-for-like sales in its managed division increase 2.3% for the year ending 30 September 2018, with total revenue from the estate up 9%. Average profit per pub rose 7%. Like-for-like sales in its tenanted estate increased 2.2% but profits were down 3% as a result of the sale of 12 pubs the previous year. Group turnover was down slightly to £67,389.000, compared with £67,963,000 the year before. Pre-tax profit was down to £2,671,000, compared with £4,688,000 the previous year when the company made an exceptional profit of £1.1m from selling its Regional Free Trade business. In addition, during the year Wadworth underwent a restructure and incurred reorganisation costs of £470,000. Operating profit before exceptional items was down to £5,570,000, compared with £6,121,000 the previous year as a result of "key strategic decisions taken in the best long-term interests of the company". Like-for-like sales in the beer business increased 6%. During the period the company transferred The Bear Hotel in Devizes to its managed arm, taking the division to 55 pubs. The number of tenanted sites fell from 159 to 146. The company invested £7m in its estate, including £4.4m in its managed pubs, during the year as proceeds from the sale of tenanted pubs and the Regional Free Trade business were reinvested. In the company's annual report, chief executive Chris Welham said: "Over the past three years our strategy has focused on preparing the business for the next generation. We have continued to invest in our people, brands and pubs with a long-term perspective. While we have taken a step backwards in profit this year, the strategic decisions we have taken are for the long term. They have enabled us to focus the business on our core competence of efficiently running great pubs and brewing quality beer. Pub investment has focused on further upgrading the existing estate, in line with our estate plan, and going forward we will only buy sites selectively. Pub profit in the combined estate has improved over the past three years, however we have placed more emphasis on managed houses being our engine of growth. Annual contribution from managed houses has now overtaken tenanted for the first time. The performance of the three pubs acquired in 2017 – Bird in Hand, Knowle Hill; Dolphin, Botley; and Stag, Alcester – are still taking time to realise their full potential. The underlying return on investments completed in both managed and tenanted estates, however, are giving a good return on capital. Our pub estate is increasingly well positioned now with capital investment and the appointment of better calibre people to continue to take local market share. The focus remains on delivering the right product, price, environment, service and communications to customers, to deliver an exceptional all-round experience."

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