Amber Taverns sees EBITDA increase by one-third
Like-for-like sales grew 2% with revenue up 30% to £33.2m as the LGV Capital-backed company opened 11 pubs in the period, ending the year on 80 operating pubs; a further six have opened or been secured since the year-end.
Unit EBITDA grew 31.3% to £8.4m and Amber said every site in its estate is profitable.
Pre-tax profits increased 22% to £3.9m and pre-exceptional operating profit rose 35% to £5.4m. Amber said trading in the current year has “begun well considering the unseasonably wet weather”.
The company said it’s “on track” to reach its 100-site target by 2014.
The Lancashire-based company now has a handful of pubs in the Midlands and chairman Clive Preston told the Publican's Morning Advertiser sister title M&C Report that Coventry and Kidderminster are among the target areas. However, he emphasised that there are still opportunities in northern England, pointing to areas in Yorkshire in which it currently has no presence such as Leeds, Sheffield, York and Huddersfield.
In addition, terms have been agreed for Amber’s first site in Hull. Preston said that in recent years the move to acquire sites in high streets has resulted in higher opening costs but greater returns, with sales to profit levels consistent at c25%.
Managing director James Baer told M&C Report: “We still think there’s opportunity in community. It’s just that the best opportunities have been in high streets.”
Preston said returns on investments have been “comfortably north of 20%”, with some reaching 30%.
Amber targets run-down pubs for acquisitions and makes substantial investments in them, often a sum greater than the acquisition cost. Average total investment per unit, including acquisition, investment and other costs, is £530,000 and that figure has risen in recent years.
Preston said: “I am pleased to report another year of substantial progress for Amber Taverns, with a solid performance from our core estate and new acquisitions continuing to deliver returns in excess of 20%.
“The Amber model of a well-invested pub offering consistent value for money, together with an incentivised operator allied with managed house retailing disciplines and standards, continues to produce consistently good returns and cash flows from wet-led pubs despite the pressure on our customers’ disposable incomes.
“I remain confident that the sector will continue to throw up numerous opportunities for us, particularly as we further develop our presence in the Midlands, not only to keep growing but also to reinforce the strengths of our model in developing viable and sustainable pub businesses.
“We enter the new financial year with a strong pipeline of acquisitions identified and the directors remain confident of the year ahead.”
Amber opened sites in Morecambe and Doncaster in March and May respectively. Opening this financial year will include the Tap and Tanner in Walsall, the Windmill’s End at Blackheath in the Midlands, the Auctioneer in Hanley, Stoke-on-Trent, and the Market Tavern in St Helen’s; all four have been bought since February.
