Mill House moves into hotel market
Mill House Inns, the managed operator led by Ted Kennedy, is to operate a hotel division after buying the two biggest venues in its history for a total of £10m.
The company has bought the two hotels, offering a total of 115 bedrooms, from Washington Hotels, the company owned by Nicholas Crawley and Admiral Taverns boss Gary Landesberg.
The new sites are: the Potter's Heron, Romsey, Hampshire, a 55-bedroom three-star hotel with substantial function facilities and a large pub to the front; and the Green Man, Old Harlow, Essex, a 60-bedroom three-star hotel with function room and listed-pub restaurant to the front.
Mill House will be investing heavily to develop the pubs at both sites. Kennedy claimed that Mill House was now finding better value in the hotel market than in the pub sector. "We haven't given up on buying pubs, but there is no sign of prices in the pub market cooling," he said.
Total turnover at the two hotels is around £4m and the headline price is just under 10 times earnings, which is expected to fall to around eight times earnings after investment at the venues.
Mill House, which has a total of 550 bedrooms within the estate, has also been granted planning consent to build a 30-bedroom extension to its Red Lion venue in Petersfield, Hampshire. It now runs four divisions: Top Dog, Mill House, Destination Food & Drink and Mill House Hotels. The company has spent a total of £15m on buying new businesses in the past three months with £12m of that going on hotels.
Mill House has recruited Ted Olszak, who formerly worked at London & Edinburgh Swallow Group, to work as operations executive in its Mill House Hotels division.
Richard Ullman, previously rgional director, has been promoted to the role of operations director for the Mill House and Top Dog divisions. Mill House, which bought Pioneer Pub Company last year, is currently seeing sales up by around 35% a year ago and profit running 40% up.
