Admiral Taverns reports "robust" performance
EBITDA and turnover per pub increased 5.9% and 8.7% respectively and the firm, which was bought by US-based Cerberus Capital Management in December for £200m, described its performance in the year as “robust” – Admiral exceeded its budget for financial performance by 11%.
Group turnover fell 9.8% to £96.2m on an estate that shrank by 17.4%. At pubs operating on long-term agreements, on a like-for-like basis, EBITDA rose 0.5% in the period. Group EBITDA was £28.3m.
Disposal proceeds were used to help reduce debt, which fell 23.3%, or £52m, to £171m; Admiral, which has 1,222 pubs, pointed out that debt has reduced £196m since November 2009.
“The principle attributes of pubs identified for disposal are that they are low income generating (for both the licensee and Admiral), are let on short-term agreements, and are generally positioned in poor locations,” said Jonathan Paveley, executive chairman.
Average rent per pub is below £20,000 per year, Admiral said. “This is materially lower than many peer group companies, partly due to the nature of our pubs, but also as a result of the sound financial position of the business and its balance sheet, which means we are able 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," said Paveley.
Capex in the year was £8m, significantly higher than in the previous year due to the increasing level of cashflow generated from operations. Of that figure, £5m – 300% more than last year - was devoted to “expansionary projects, designed to develop and drive trade to our pubs”.
“We have set about investing in our community pubs, working with our licensees and recruiting the best management and staff we can to deliver enhanced support effectively to our licensees."
Paveley said Admiral subscribed to an independent survey of its licensees from him! “We were delighted at just how positively our licensees regard us, with large majorities happy to recommend us as a business partner, and our business development managers (BDMs) being viewed by licensees as broadly the best in the industry.
“However, we are not complacent, but aim to continue to improve our relationships with our licensees and are taking these good results as confirmation that we are moving in the right direction.”
Recent initiatives include: introducing a suite of business-building programmes for tenants, such as one designed to enable licensees to introduce a food offer; developing a shadow P&L tool that allows BDMs to ensure licensees’ business costs and retail pricing levels are set accordingly; revamping licensee training programmes – more than 1,000 licensees have attended a course so far.
Paveley added: “The company is in a strong position to withstand the difficult economic environment affecting the UK consumer, and we are now very well capitalised to take any opportunities that may present themselves going forward.
"Investment projects are performing very well and we have a strong pipeline of planned schemes, the number of closed pubs is at a record low and our letting of pubs on long-term agreements is also very healthy."
