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Tue 12th Jun 2018 - Thwaites results, shuts brewery after travellers cause havoc
Thwaites reports like-for-likes up 2.5%, Ebitda rises 7%: North west brewer and retailer Daniel Thwaites has reported like-for-like sales increased 2.5% for the year ending 31 March 2018. Turnover rose 9.2% to £92.2m compared with £84.4m the previous year. Ebitda increased 7.0% to £20.2m, compared with £18.9m the year before. Operating profit was up 6.6% to £12.9m, compared with £12.1m the previous year. Pre-tax profit increased to £9.8m, compared with £5.7m the year before. Net debt as of 31 March rose to £63.7m, compared with £47.6m the year before as a result of investing in its core pub, inns and hotel estate and the acquisition of a hotel in the Lake District. The board recommended a final dividend of 3.36p (2017: 3.36p). Chairman Ann Yerburgh said: “Our trading started the first half of the year steadily and by the half year we were broadly level year-on-year. Despite disposing of 17 more poorly performing pubs during the year this trend held up and has resulted in full-year operating profits being almost exactly the same as last year. The mix of sales in our pubs continues to change, with beer volumes declining in line with the market at about 4% to 5%, in favour of wine, spirits and soft drinks. Average Ebitda per pub increased during the year by 5%. During the year we completed 25 development projects at a cost of £2.3m, continuing to make returns ahead of our hurdle rate of 20%. Major projects in the year have been completed at the Cock And Bottle in Tarleton, The Lindley Tap in Lindley and the Red Lion in Stockton Heath – all of which have been successfully relaunched. Last year we decided to trial some new managed pub concepts in pubs where the level of investment required meant it was difficult to attract a third-party operator. The first of these, the Grill And Grain in Hoghton, suffered a total loss from fire in April 2017. We have recouped our investment from our insurers following the year end and for the time being we have placed the redevelopment of the pub on hold while we focus on other projects. We did not find any suitable pubs to acquire in the year, however we continue to look to add into our business good-quality tenanted pubs with balanced income streams that we can either absorb into our existing tenanted estate or make significant investment to reposition as a managed operation. Our inns have continued to grow, with sales in the current year increasing to £16.1m (2017: £13.3m) an increase of 21%, operating profits have increased by a comparable amount. In the current year the inns have benefited from a full-year contribution from The Lister Barn and a part-year contribution from The Crown in Pooley Bridge, which opened in May 2017. In February 2016 we acquired the Beverley Arms in East Yorkshire. This property has been closed since acquisition and has been with our builders since June 2017. During the course of building works we have seen delays caused by problems to the groundworks and issues with asbestos. This will be a large and exciting addition to our inns, with 38 bedrooms, a bar and a restaurant and it is now due to open in July 2018. We continue to look for new opportunities to grow our Inns portfolio and will make further acquisitions where we believe we can add value. The provincial hotel market continued to grow during the year and saw further increases in bedroom stock being added to the market. During the year our hotels grew their sales by 13%. Much of this increase reflects the acquisitions of Middleton’s in York in February 2017 and Langdale Chase at Lake Windermere in April 2017 together with the opening of The Lodge at Solent in August 2017. Trading at our other hotels has been the subject of some disruption as a result of the accelerated refurbishment programme we disclosed in last year’s report. During the year we refurbished 67 bedrooms as well as the restaurant areas at Aztec, North Lakes and The Solent and the spa and pool halls at Kettering and Cottons. As these projects come to an end we will see the benefit of undisturbed trading together with the anticipated return on the investments we have made. Despite this disruption occupancy increased 4% year-on-year and our room rates net of commissions were broadly flat. As a result of this and other cost savings, operating profit from our hotels increased in the year by 10%. Last year, in response to the costly impact of the National Living Wage, we undertook a review of the whole of our hotel operations, seeking to redesign our operational structure to become more efficient. This project was completed at the year end and we hope it will bring benefits in the current year. Our priority this year will be to cement the performance of the investment projects delivered last year, of which there are a good number, and to make a success of the new operational and management structure in our hotels. The delivery of our new website will give us a better opportunity to market our hotels directly to our guests, rather than through third parties. We also look forward to finalising our plans for the development of Langdale Chase. The business has good momentum and in the absence of any shocks we expect to make continued progress. We will be highly selective in making any further acquisitions but should the opportunities present themselves we will seek to acquire additional outstanding properties in great locations to grow the business for the future.”

Thwaites shuts brewery after travellers cause £100,000 damage: Thwaites has been forced to close its brewery after being ransacked by travellers. The company was forced to pour away 1,700 pints of ale after the building was badly damaged by the invasion. It has been making beer for two centuries at its headquarters in Blackburn but it was torn apart in three days last month by 100 travellers, who left behind an estimated £100,000 of damage. After police said they “negotiated with the travellers to encourage them to move”, the 21 caravans were escorted to the M65 motorway on 28 May and allowed to drive away. Workers returned after the bank holiday weekend to ransacked desks, smashed windows and human waste strewn around the yard. Copper wiring had been stolen and there were fears the beer stocks had been “contaminated”. No arrests have been made. Thwaites chief executive Rick Bailey told the Lancashire Telegraph: “It’s really upsetting that 211 years of brewing at our site in Blackburn has ended in this fashion.” Production is now set to move four miles away to Thwaites’ new £12m headquarters in Mellor Brook, which opens later this year. Brewer Harry Brunt said: “I couldn’t believe it when I saw the damage they caused. It makes no sense. It felt so sad to pour away our beer.” Blackburn MP Kate Hollern described the mess and vandalism as “absolutely appalling”. She added: “I want to see more action from the police because, for me, it was a break-in – there was theft and criminal damage.”

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