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Morning Briefing for pub, restaurant and food wervice operators

Mon 4th Jul 2022 - Oakman Group reports FY like-for-likes up 19.9% on pre-pandemic levels
Oakman Group reports FY like-for-likes up 19.9% on pre-pandemic levels: Oakman Group, the Dermot King-led pub-restaurant operator, has reported like-for-like sales for the year ending 3 July 2022 are up 19.9% on pre-pandemic levels. Total group sales for the year were £65.1m, up 79% on the previous year and 55.4% on 2018-19, the last full year before the pandemic. Total group sales for June 2022 were £7.1m, up 48.9% on pre-pandemic levels and up 11% on a like-for-like basis compared with pre-pandemic. Executive chairman Peter Borg-Neal said: “Understanding trading numbers at present is made challenging by the extraordinary covid related difficulties our sector has faced over the past two and a half years. In addition, the changes in the VAT rate further confuse the picture. However, whichever way you look at the comparisons, these results represent an excellent performance. Certainly, Oakman has consistently outperformed the Coffer CGA tracker of industry sales. As with the rest of our sector, we were hit hard by Christmas cancellations, and sales remained soft through to the spring. Recent weeks have been much better and, although the Jubilee week was not as strong as we had hoped for, we have enjoyed buoyant sales over the rest of June. These numbers would have been even better but for the continued challenges regarding staffing. Exact calculations are difficult, but we estimate that, as a consequence of having to restrict trading at various times, we have lost around a further 2-3% of growth.” Oakman has continued to add and develop new sites. The three major openings – The Rose in Wokingham, The Grand Junction Arms in Bulbourne and The Grand Junction in Buckingham – have all performed ahead of their investment targets. Oakman has recently acquired The Hesketh Arms in Rufford, Lancashire, and is currently on-site with The Beech House in Watford, which will open in September. Oakman acquired six pubs and the intellectual property of The Seafood Pub Company in early 2021. Since then, four sites have been added under the leadership of Joycelyn Neve, and further additions will occur over the next 12 months. Borg-Neal added: “Following the end of lockdown and covid restrictions, staff shortages and the impact of inflation have become the biggest challenges we face as a management team. I believe our chief executive Dermot King and his team have done an excellent job in the circumstances, and we are well placed to make further progress in the year ahead. It is clear the runaway inflation will have an impact on profit, and there is a high degree of uncertainty driven by the wider geo-political issues such as the war in Ukraine. Accordingly, we have had to slow our opening programme down as we have become a little more cautious. However, I am delighted with the performance of the three we have opened and am very optimistic regarding the prospects of our new site in Watford. Furthermore, we have an excellent pipeline ready to be developed as funding, and our confidence levels, allows.” Oakman has also reported its accounts for the year ending 4 July 2021. Net sales stood at £32.4m, up £2.5m the previous year, with Ebitda of £3.6m, up £6.2m on the year before when it had a loss of £2.6m. King said: “Overall, the year was very much defined by continued uncertainties caused by government restrictions on our ability to trade at various times due to the coronavirus pandemic. Although all sites reopened on 4 July 2020, trading became subsequently restricted including ‘rule of six’, ‘substantial meal rules’, ‘10pm closing rules’, outdoor only trading rules and a second national lockdown in November – followed by a third that lasted from mid-December to April 2021. The programme of government support, through various job retention schemes, rates forgiveness, a temporary VAT reduction on food and overnight stays and 13 days of Eat Out To Help Out, cushioned some of the disruption caused. Surviving the impact of the national lockdown was the key focus of the management team entering this financial year. As well as raising additional capital, we focused attention on re-energising our people and ensuring we were able to take advantage of new opportunities in an ever-changing environment.” The group issued £14.2m of new equity during the year, including £8.3m of shareholder loans that were converted to equity. Bank and other secured loans increased by £1.3m as the result of the lenders agreeing to various covid-19 interest payment holidays. King added: “These were not the kind of results that I hoped we would produce when looking forward to this year. However, I believe we proved our resilience and ingenuity as a management team in the way we coped with an unprecedented set of challenges. During the periods across the year when we were allowed to trade from April onwards, our sales outperformed the market by 36%. We improved our customer qualitative scores measured by our ‘feed it back’ guest opinion score. We strengthened our balance sheet and increased our cash reserves. We even found time to lead the campaign to reopen hospitality – including helping to produce a government information film about covid-secure operations. We continue to look to the future and grow our business despite the complex set of adversities we faced.” Oakman Group features in Propel’s Turnover & Profits Blue Book, which is updated monthly for Premium subscribers and now features 588 companies. The Blue Book, which is produced in association with Mapal Group, provides a five-year overview of turnover and profit and ranks companies according to turnover, pre-tax profit and profit conversion. The Blue Book also provides details of directors’ earnings and highest paid directors. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £895 plus VAT – whether they are an operator or a supplier. The single subscription rate is £445 plus VAT for operators and £545 plus VAT for suppliers. Email to sign up.

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