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Wed 30th Jun 2021 - Thwaites reports full-year turnover down 67%, pandemic causes company to lose £24m
Thwaites reports full-year turnover down 67%, pandemic causes company to lose £24m: North west brewer and retailer Daniel Thwaites has reported turnover fell 67% to £32.2m for the year ending 31 March 2021, compared with £98.1m the previous year as a result of the pandemic. Its pubs and inns generated turnover of £19m with the hotel and spas division producing £13.2m of sales. The company saw an operating loss of £9.4m, compared with an operating profit of £12.6m the year before, which also included a negative covid-19 impact of £2.5m. In total, the pandemic has lost the company about £24m. Ebitda stood at minus £2.2m at the year end, compared with £19.5m the year before. Net debt at 31 March 2021 was £78.8m, an increase of £12.2m since the interim results at 30 September 2020. The business was shut, other than to key workers, for 208 days, traded in the “debilitating” tier system for 55 days and was open inside with social distancing restrictions for only 102 days. The company provided more than £3.2m of direct financial support to its circa 225 tenanted pubs. In March 2020, the company put in place a freeze on returning capital investment and acquisitions, although it has continued to maintain its properties throughout the year at a normal rate. As a result, no acquisitions were made during the past year. The company sold three bottom-end pubs and two ancillary properties with proceeds of £0.8m. The board did not recommend the payment of any dividend and said it would not do so while the business was loss-making and in receipt of the government’s financial assistance, which is was “very grateful” for. Chairman Richard Bailey said: “The darkest days of the past year are now behind us and while the whole covid-19 episode has been most unwelcome, the company is emerging from closure, lockdowns and restrictions intact, with its pubs, inns and hotels ready to make the most of the situation as a wave of pent-up demand is released once our personal liberty is restored. Thwaites entered the covid-19 pandemic in excellent shape, with well-invested assets, a strong balance sheet and businesses orientated to attractive parts of the market. The company faced a year of accumulating losses, worrying uncertainty and immense challenge. However, the decisive actions we took to control our cost base and safeguard the financial strength of the business ensured we reopened on the front foot and were able to welcome back our customers, new and old, help them to feel at ease and enjoy themselves once more. While it would be too much to say that we are coming out of the past year stronger, we have minimised the financial scarring from being shut and have plenty of liquidity to get us back on our feet and consider how we re-establish the growth path that we had been on. We guard our family values preciously; they provide a strong framework to guide us and have shone through during the past year. Our teams have been nothing short of outstanding and I am tremendously proud of the way they have navigated the highs and lows, from the frantic days of Eat Out To Help Out and the strong trading of last summer, to closure and safeguarding our properties. We have asked much of them in the past year and the way they have gone the extra mile to put us in good shape for the future is humbling. The benefit of our freehold-only philosophy has shown its strength and, with no leaseholds, we have avoided the fixed costs of rental payments in lockdown and the need to negotiate with landlords. Last spring, we had no expectation this pandemic would cast such a long shadow for more than a year; nor at our interim results did we contemplate the winter lockdowns would be as persistent or as challenging as they have been. However, the storm has been weathered and the continuing long-term success of the company is now at the forefront of our thoughts.” He added: “The first rays of light are breaking through the clouds and the early signs of trading as we have reopened have been most encouraging. The decision to delay removing social distancing from 21 June is a critical one to the hospitality industry. We must now wait for the government’s next move. One of the consequences of the past year has been to raise the profile of the pub with government and also with the general public, who have discovered that life without the pub is not as fun as it is when it is there. In the medium term, this bodes well as the role the pub plays in socialising and as the glue holding together local communities has been highlighted. At all levels of government, there has been an awakening to the fact community pubs are the biggest social outreach programme in the land, delivered by landlords and landladies free of charge. These precious assets need to be protected and nurtured and I have increasing confidence the government will support that. We have put considerable focus, as we reopen, on maintaining quality within our properties. This puts them in an excellent position to be the place of choice as our customers choose to trade up and treat themselves. We do not have many properties in city centre locations and our larger hotels are located on the motorway network away from public transport. We have good representation in rural locations and national parks, places that people will seek out. The corporate meeting and travel market, for the moment, is a little more opaque but I am confident it will recover in the coming months. I have no doubt there may be bumps along the road but the strength of the business built up over many years has proven its worth over the past year. As we reopen, we will closely observe what our customers now want from us, it may be that things have changed. If they have, we will respond with enthusiasm and agility.”


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