Thwaites has reported its financial figures for 31 March 2015 to 31 March 2016, showing turnover of £84.6m, a rise of 4.0%.
Operating profit has increased by £1.9m or 19.8% on last year, however once last year’s restructuring costs and property impairment are excluded, underlying operating profits of £11.5m compare against £12m in 2015, which included a full year contribution from Thwaites' Beer Co.
This year’s results have been achieved by replacing much of those profits lost from the sale of our Beer Co, which in 2015 amounted to £2.2m. This has been achieved by strong growth in the continuing pubs, inns and hotel businesses, which delivered operating profits of £11.4m (2015: £9.8m, pre impairment), representing growth of 16%.
During the year, the firm has continued its strategy of investing in the core pub estate, inns and hotels, whilst continuing to sell poorer quality properties. As a result of that and the receipt of the proceeds from the sale of our Beer Co of £29m, net debt decreased in the year from £60.5m at 31 March 2015 to £34.1m at 31 March 2016.
The strategy of the company is to own and operate freehold properties to offer superb hospitality in outstanding properties in great locations. The sale of the Beer Co in the past year and subsequent restructuring has slimmed down the company to a core of high quality businesses that meet this objective, whilst providing funds to develop and acquire new properties to provide growth for the future.
The investments that the firm has made in the Thwaites Pub tenanted estate over the past few years have created sustainable, long term businesses with multiple income streams and strong food offerings. The group has continued to invest in letting bedrooms for the pubs where possible to create an additional income stream to the restaurant and drinks business.
The company remains committed to acquiring and developing Thwaites Inns of Character (larger managed properties), which ideally will have bedrooms as well as offering excellent and exciting food and drink.
Shire Hotels and Spas is a collection of provincial hotels and Thwaites is looking to add to the number of sites through acquisition or new build.
Thwaites is to develop a new brewery on its new site, and brew interesting craft beers as well giving customers the traditional ales that Thwaites is famous for.
The company has put significant focus and attention into looking for opportunities to invest in freehold properties that complement the tenanted pubs, inns and hotels businesses. Five properties were acquired in the year.
In the first half of the year the group acquired: The Crown at Pooley Bridge, The Royal at Heysham and The Boot and Shoe, Lancaster. In the second half of the year, the firm acquired the Beverley Arms in the East Riding of Yorkshire and a large derelict building close to The Lister Arms, Malham, each of which has been acquired to add to Inns of Character. These properties form the core of a significant investment programme in the current year and will be relaunched under Thwaites' own management.
In January 2016, the firm received planning permission for a new 54 bedroom lodge adjoining the Parsons Collar pub in Fareham, adjacent to the Solent Hotel & Spa. This forms another key part of our investment plans for 2016/17.
Over the same period, Thwaites has sold 20 pubs from the bottom end of the estate at a small loss.
Ann Yerburgh, Thwaites' Chairman, said, 'The financial year has begun with some headwinds, with difficult trading over the important Easter period. Easter fell early this year, and was accompanied by poor weather, which then persisted for several weeks. Fortunately the regional hotel market continues to grow steadily and our pubs, inns and hotels are benefiting from sustained investment over the past five years.
'This will be a year of consolidation and investment. This will be important in laying the foundations for profitable growth in the following year. We expect to start work on the new Lodge at the Solent in July, and on investments in the Inns after the summer. We have the strongest pipeline of investment opportunities that we have had for a number of years and our recent investment experience gives us confidence in these.'
Yerburgh continued, 'We are working hard to uncover additional new opportunities to acquire new properties and are excited about some of the prospects that we are currently assessing.
'After a number of years of disruptive change, the company is in a strong financial position to enter a period of consolidation, investment and growth. As a result I am optimistic about its future and confident that we are in a position to make the most of any opportunities that arise.'