The Oakman Group Plc has published its half-year performance ending Sunday 1 January 2023, showing solid growth.
Sales:
• Total sales for 26wks ending 01/01/23 were £36,164,127
• Total sales v 2019 +41.5%
• LFL sales v 2019 +9.8%
• Total sales v 2021 (actual) +10.4%
• Total sales v 2021 (VAT adjusted) +17.5%
• LFL sales v 2021 (actual) +1.1%
• LFL sales v 2021 (VAT adjusted) +7.6%
• December sales were particularly strong with a record period of £8,231,137
• Total sales v 2019 +34.3%
• LFL sales v 2019 +6.5%
• Total sales v 2021 (actual) +22.6%
• Total sales v 2021 (VAT adjusted) +27.4%
• LFL sales v 2021 (actual) +10.4%
• LFL sales v 2021 (VAT adjusted) +17.5%
Peter Borg-Neal, Founder and Executive Chairman, (pictured right with CEO Dermot King) said, “We have continued to outperform sector averages over the past six months which reflects great credit on Dermot King and his team. We believe our locations and market positions have given us a competitive advantage in the current environment.
'In addition, our commitment to maintaining our quality despite the external challenges has been key to our out-performance. We continue to maintain our properties, train our people and develop our offer.
“We expect our growth to accelerate further over the coming months. It is an unfortunate consequence of the current situation that many of our competitors will be closing their doors – some temporarily, some permanently.
'We have already seen many closures and there will be many more to come in the next few months. This supply side adjustment does, of course, benefit those businesses that are still open and, indeed, our sales over the past couple of weeks show very strong growth over the last year.”
Funding:
• Oakman is looking to raise £5.3m from its shareholders via a discounted share placement:
• The objective is to provide a buffer to protect the business from any further worsening of the external environment
• Debt markets are pretty much closed to hospitality operators at present
• Oakman will return to market for further funding once the environment has improved.
Peter commented: “We have very supportive shareholders, and we are confident that this raise will prove to be a success.”
Expansion:
Oakman has a pipeline of six sites which are to be converted into the flagship Oakman Inn brand. These sites are in Gerrard’s Cross, Ludlow, Epsom, Old Hatfield, Harpenden and St. Albans. The first of these, The Journeyman in Gerrards Cross, starts on site in February.
Peter commented, “The Oakman Inn, our core brand, has now grown to 28 sites and the average weekly sales per site for the year to date exceeds £42k net of VAT. We are extremely happy with the positioning of the business and we have an outstanding pipeline of Oakman Inn sites we intend to develop over the next eighteen months.
“The Seafood Pub collection now has eleven sites within its portfolio. The focus will be on investing further in those sites and developing the concept before we look at any further acquisitions.”
Economic Outlook:
“Looking to the future, the Bank of England forecasts point to the country suffering a lengthy but shallow recession. It also points to inflation grinding to a halt very soon and the indications are that interest rates will not raise as much as was feared back in November following the financial instability driven by the ill-fated mini-Budget.”
Future strategy:
“The Board remains fully committed to an exit/liquidity event. However, we will only do so when market conditions are such that we will secure the appropriate value for the business. We are fully confident of the future performance and to exit prematurely would be detrimental to all.”
Sector issues:
Peter added, 'It is clear that we are going to get little help from the Government in the current climate. That may well turn out to be a good thing. In my opinion, we need to stop campaigning for short-term interventions to support our sector.
'The focus needs to be on long-term structural change. Our sector is ridiculously overtaxed compared to the rest of Europe. We should focus our efforts and campaign on two issues only – Business Rates and VAT. The first is an antiquated tax that delivers an unfair burden on our sector. The second is ridiculous.
'For there to be no VAT on processed meals but for VAT to be charged on food in our sites is an abject nonsense. Furthermore, I think it can be proven that these taxes reduce income for the Revenue by depressing growth in our sector.
'Our trade bodies should focus their efforts on these two issues and not be distracted elsewhere.'