Admiral has 'appetite for game-changing acquisition'

Georgel comments follow this week's update on trading in the year to 3 June, which he described as a “solid and sustainable performance in the face of multiple pressures”.

He said that the group now had just “a few dozen” disposals likely and that the focus was firmly back on acquisitions, with the support of new backers, C&C Group and Proprium Capital. He said that while individual and small package deals would continue to be a focus, the group had ambitious targets.

Authenticity is key

He said that while consumer confidence had clearly been hit, loyalty was strongest towards authentic, local businesses and pointed out that there was already evidence of competitors moving away from brands and adopting a more individual feel – something he expects this to continue.

“A lot of companies talk about personalisation and creating character but nothing can rival the pub, especially in the tenanted model”, he said. “The owner/operator is at the heart of the business and knows exactly what the local community want because they are in daily contact with them.”

He said the group would continue to invest in the estate and shape the operating formats of pubs, adding: “We want to complement the knowledge on the ground by the experience we have in operating pubs across the country. We are doing a lot of work to appeal to the millennial market and stretch our target demographic.”

He said he was also pleased at the increasing diversity of Admiral’s publicans, with the average age of licensees having fallen 10% and more women running its pubs than ever before.

He said that the Market Rent Only option, enshrined in the Pubs Code, had so far had a limited impact on Admiral. Of eight applications, only one has led to an MRO agreement, with no referrals to the Adjudicator.

"Period of transformation"

On the potential for growth, Georgel said: “We have gone through a period of transformation and the future is very much about looking for the right opportunities to grow.

“We have the appetite for a game-changing acquisition and the resources to do that but it has to be the right deal.”

On the prevalence of alternative agreements in the tenanted sector, Georgel said: “We remain alive to what is going on in the market but the key question is always – what is the best operating model for this pub.

“One of the reasons we haven’t experimented with different kinds of offers is that we have never had the scale to do that. As we grow it may be something that makes more sense for us.”

Georgel will be the inaugural host of MCA's Tenanted Pub Company Summit dinner on 1 February at London’s Bloomsbury Hotel, which will also include a speech from Micehlin-starred chef, Mark Sargeant on the future for pub food. To see the agenda for the conference during the day, as well as more details on the dinner, please go to https://www.tenantedpubcompanysummit.co.uk/​

"A robust performance"

Admiral Taverns has described trading for the year to 3 June as “a robust performance” in the face of the “distraction and bureaucratic burden of sector regulation”.

The c800-strong group recorded turnover of £69.2m, down from £69.5m the previous year with underlying EBITDA essentially flat at £25.1m. Underlying EBITDA per average number of pubs grew 3.2% while underlying EBITDA to net debt rose to 3.4x.

The group said the results reflected good performance from the core estate, non-core pubs disposed of in the prior year and incremental costs of the Pubs Code

EBITDA in the core estate was up 1.1% on a like-for-like basis to £24m, with like-for-like estate valuation increasing by 5.6%. Over £8m was invested in the core estate during the course of the year.

The group said that in the current financial year EBITDA growth was in line with expectations despite a challenging trading environment.

Since the period the acquisition of Admiral by Proprium Capital and C&C Group has completed, as well as a separate deal to take on 17 pubs from Heineken.

Ambitious plans

The group pointed to its strong relationship with tenants as core to its success, reinforced by the results of MCA’s 2017 Tenant Track survey, where Admiral was once again the top national pub company.

Chief executive Kevin Georgel said: “In a year which saw the distraction and bureaucratic burden of sector regulation and the impact of growing economic and political uncertainty in the aftermath of the EU referendum, Admiral has delivered a robust performance with good underlying like for like growth across our core estate.

“Since the year end we have been delighted to welcome onboard new and supportive partners, C&C Group Plc and Proprium Capital, as the Group continues to build on the strong platform it has established in recent years. In November we announced the acquisition of 17 pubs from Star Pubs & Bars, early testament to our ambitious growth plans, and we look forward to reviewing further opportunities in our sector as they arise.

“Whilst the wider trading environment continues to be challenging, we see evidence that consumers are prioritising affordable, authentic, experiences in their local area which well-invested, community pubs stand to benefit from. As such, trading since the year end has continued in line with our expectations.”