Admiral reports "transformational year"

The group, which is led by Jonathan Paveley, reduced its debts by 25.6% during the year to £223m, and has trimmed a further £28m of this figure since the year end.

It said that the year had been a “transformational” one for the group and that it was now in a strong position to withstand the difficult economic environment affecting the UK consumer, and to take advantage of the strategic opportunities that were now arising in the sector.

The company disposed of 477 sites during the period, raising £82.6m, giving an average sale price of just over £173,000 per pub. The majority of the funds raised were used to pay down debt. It has disposed of a further 164 sites since the end of May reducing the business to a “good quality core estate”.

On the back of the disposals, turnover across the group fell by 12.6% to £106.7m during the year, while operating profit declined 15.1% to £30.6m.

The group said that despite the uncertain economic outlook, its performance had been “robust”, with the business remaining “significantly ahead” of budget, a trend, which it said had continued into its current financial year.

Operating profit per pub rose 4% during the year, this had climbed to 5% since the year end. Operating profit margins improved from 28.0% to 28.7%.

Paveley, executive chairman, said: “Admiral continues to make good progress towards its long-term objectives of improving the quality of its earnings and pub estate. This involves selling less sustainable sites, using the proceeds to repay debt, reinvesting cash generated from operations into those pubs with a good future and strengthening our team and all aspects of our operations.”

Average rent per Admiral pub stood at approximately £15-16,000, which the group said was a result of the “sound financial position of the business and its balance sheet”, that allowed it to identify appropriate, sustainable rental levels based on “a realistic assessment of the future performance of the pub, and not driven by group debt obligations”.

It said it continued to provide non-contractual support to its licensees by way of temporary rent concessions and additional beer discounts, as well as continuing to invest in pubs alongside licensees.

During the year, the annual value of such discounts and rent concessions was approximately £4m, while the level of capital investment was £5m, including £1.7m deployed to projects specifically designed to develop pubs and further drive trade.

The business was refinanced in November 2009 under the auspices of Lloyds Banking Group and the group said that its new strategy allowed it to perform ahead of the agreed refinancing plan, with debt repayment also well ahead.