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Morning Briefing for pub, restaurant and food wervice operators

Sun 7th Apr 2024 - Exclusive: Britannia Hotels reports record turnover, RedCat posts losses of £31m
Exclusive – Britannia Hotels sees turnover increase to record £154.8m after ‘exceptional’ year: Britannia Hotels, the UK’s largest private hotel group with 64 locations offering more than 10,000 bedrooms, has turnover increased 31% to a record £154,790,000 for the year ending 31 March 2023 compared with £117,847,000 the previous year. Pre-tax profit was up to £39,371,000 from £33,355,000 the year before. Gross profit margin stood at 68.7% (2022: 69.2%). In their report accompanying the accounts, the directors stated: “This result represents an exceptional performance achieved during a period of difficult trading conditions that continues to limit opportunities for growth. Our priorities continue to be maintaining occupancy levels and to manage operating costs whilst ensuring the business is well placed to exploit the opportunities of the future.” No dividend was paid (2022: nil).

Exclusive – RedCat posts losses of £31m: RedCat Pub Company, the investment vehicle founded and chaired by Rooney Anand, has posted losses of £31m. RedCat also reiterated it believes current headwinds facing the sector will create further opportunities for the business to grow. It comes as the group reported turnover increased to £120,488,826 for the year ending 3 April 2023 compared with £62,790,800 for the previous 64-week period from when the company was incorporated in January 2021. Of that £120,488,826 figure, £87,361,195 came from food and beverage (2022: £46,605,704), £29,107,372 from accommodation (£13,852,539) and £4,020,259 from other income (2022: £2,332,557). Adjusted Ebitda stood at £3,584,251 (2022: £7,203,215) while pre-tax losses rose to £31,033,990 from £3,203,557. In September 2023, the group received £25.0m additional funding from its majority shareholder, Oaktree Capital, £10m of which has been used to repay part of its external borrowings. Following the period end, the group cancelled the undrawn portion of its facility totalling £45.8m, leaving total drawn facilities of £62.5m. During the period, the company acquired 17 sites including four carvery outlets from Anglia Restaurants; the Jamaica Inn, Bodmin, Cornwall; Forest Park Country Hotel and Inn in Brockenhurst, Hampshire; The Bricklayers Arms in Flaunden, Hertfordshire, and Nags Head in Great Missenden, Buckinghamshire, from The Foodie Pub Company; Breckland Lodge in Attleborough, Norfolk; The Pheasant, Holt, Norfolk; The Moorland Hotel in Dartmoor; The Manor Coastal Hotel and Inn in Blakeney, Norfolk; The Meynell Ingram Arms in Hoar Cross, Staffordshire, and The Cock Inn in Mugginton, Derbyshire, from Berkeley Inns; and The Swan Hotel in Wells, Somerset. During the period, the group disposed of three smaller sites – the Shore Bar in Seaford, East Sussex; the Manor House in Beckenham, south east London; and the Bird in Hand in Forest Hill, south London; which were all acquired as part of wider portfolio acquisitions. There have been a further seven disposals since the period end. RedCat said it continues to invest in its current estate, having recently completed the refurbishments of The George Hotel in Amesbury, Wiltshire; The Tudor House Hotel, Tewksbury, Gloucestershire; The Kings Arms, Godalming, Surrey; and The Manor House Hotel in Blakeney. In their report accompanying the accounts, the directors stated: “In the context of the challenging economic backdrop, the directors are satisfied with the results of the group. The group has continued to seek to acquire good quality, freehold assets and has grown significantly over the period, deploying further targeted capital investment to enhance the quality and earnings potential of the portfolio. At the statement of financial position date, the group had total assets of £295.4m (2022: £237.3m) and total liabilities of £186.9m (2022: £151.2m) resulting in a net asset position of £108.5m (2022: £86.1m). Net cash outflow from operating activities for the period was £2.1m (2022: net cash inflow of £4.2m), net cash outflow from investing activities was £83.8m (2022: £121.5m). Net cash inflow from financing activities was £48.2m (2022: £158.5m) as funds were raised to acquire sites and invest capital, and the closing cash balance in the business was £3.5m (2022: £41.2m). External factors continue to influence ongoing trading, while also creating further acquisition opportunities. Geopolitical events affecting energy prices, input costs and the cost of living are undoubtedly an ongoing challenge for the whole hospitality sector. While not immune to these serious headwinds, the group continues to adapt, working with our suppliers to improve procurement, our brokers to manage our energy costs effectively and ensuring that our business is as efficient as possible while still providing great customer experiences. With the ongoing support of its shareholders and banks, the group's management team believe that the current headwinds facing the sector will create further opportunities for the group to grow, using the strength of its statement of financial position and scale opportunities to deliver additional revenue and earnings growth through targeted investment.” Last month, Propel revealed RedCat is set to exit more than a fifth of its 114-strong estate after a strategic review of its business. As part of the review, RedCat Leased Pubs, a self-contained subsidiary comprising ten leasehold pubs, has been placed into administration, with Nick Holloway and Steve Absolom, of Interpath Advisory, appointed as joint administrators. At the same time a further group of five sites within RedCat’s managed division will also be marketed for sale in the coming weeks, taking the total number of managed sites for sale to 14. This takes the total number of sites the group is set to exit to 24. RedCat features in the Premium Club Turnover & Profits Blue Book, the next edition of which will be released on Friday (12 April) and features 901 companies. RedCat’s turnover of £120,488,826 is the 85th highest in the database. The Blue Book ranks companies by turnover, profit and profit conversion, listing directors’ earnings for the past five years. Companies can now have an unlimited number of people receive access to Premium Club for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email kai.kirkman@propelinfo.com to upgrade your subscription.

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