The Wolverhampton-based company, which has more than 1,500 sites nationwide, saw profit rise by 2% to £37m for the 26 weeks ending 30 March 2019, it revealed in its interim results this week (15 May) where it also reported a 5% lift in its revenue to £553.1m.
The managed part of the business recorded an overall 2.2% increase in like-for-like sales, which included a 3.2% boost in the final 10-week period.
Its brewing arm also saw good results with revenue up by 8% and its operating profit increased by about the same.
Findlay told The Morning Advertiser: “This year, we will open nine pub-restaurants and three new lodges. In 2020, that number will come down slightly so it will be six pub-restaurants and three lodges next year.
“We will invest about £50m of total capital expenditure on new builds and about £80m on organic capital expenditure for refurbishment of the estate – so we will be spending about £130m on pubs this year. Most of that will be going into our managed pub estate across the UK.”
Findlay said its wet-led community pubs had build on a strong trading performance last year and explained why he thought this had happened.
He added: “Consistent with that in September we acquired 15 community pubs, which used to be Mitchells & Butlers pubs and we spent £4m on refurbishing those and they have been performing really well for us.
“I am very positive about the strength of community pubs. It is a sector where there have been a lot of pub closures so poor-quality pubs have steadily exited the market, and the quality of the ones left is better.
“There are some really good trends, things like premium beers, craft beers, premium gins. We were up nearly 150% on premium gin in this first half and premium beers are up 65%.
“Those are all very good trends in that part of the market that are likely to be here for some time.”
Expansion plans
Findlay also outlined how the business will be looking to grow its managed estate through expansion and adapting its offer to ever-changing consumer demand.
He said: “Building new pub-restaurants and lodges are part of it. A really important part of it is also keeping up with trends in the market in terms of what people are looking for on menus today.
“We have existing customers who like to see certain things on the menu but we have also got to attract new customers.
“Last year, we introduced the new vegan menu, which won the PETA vegan restaurant menu of the year award, which was quite something. We were the first to the market with a plant-based burger, which has been really positive.
“The second thing is offering value in this market is really important. We have done more promotion so we have introduced a series of deals that we call ‘rhythm of the week’.
“It looks at what deal we have got on each day. For example, Thursday is steak night. Two steaks and a bottle of wine for £22, it’s a fantastic deal, to drive things forward.”
The tenanted and leased arm also saw like-for-like sales increase, which Findlay highlighted from the results.
He said: “Our tenanted and leased pubs are performing very well. We are seeing like-for-likes up about 2% and we have no closed pubs at the moment.
“The consumer offer is down to the tenants and lessees so our job is making sure we look after tenants and lessees well, our rents are fair, so it's a slightly different market in that respect.”
New beer launch
Looking ahead to the future, Findlay laid out what the company will be doing for its pub estate as well as its brewing business.
He said: “We are about to launch a new low-alcohol beer. We have about an 8% share of the low/no-market already, it is a fast-growing part of the sector, it's not big at the moment but it is getting bigger and growing fast.
“We are going to launch a new 0.5% beer in June, which will be a US craft beer called Shipyard Low Tide.
“We have still got a number of pubs we are going to open in the second half of the year, we have just relaunched all our menus so they are just out there so the next 12 months will be about making those bed in and work.”
