Oakman poised to ‘continue growth’ despite £13.9m loss in 2020
Such losses left Oakman with net liabilities of £10.8m, a figure that increases to positive assets of £13.6m after reclassification of shareholder loans as shareholder funds, according to the group’s 2020 results.
The largely Home Counties focused operator added that has been significant post-balance sheet activity and that the company is stable, well-funded and ready for further growth.
As such, the Oakman Group is on course to make a substantial earnings before interest, taxation, depreciation and amortisation (EBITDA) profit in 2020/21, according to its forecasts.
In keeping with the rest of the pub sector, Oakman attributed adverse fiscal symptoms registered in 2020 to the Covid-19 pandemic as, prior to the enforced closure of its businesses, Oakman had been trading well with like-for-like sales growth of 4% and total sales growth of 13%.
As reported by The Morning Advertiser (MA), pub operator Marston’s revealed a £105.5m pre-tax loss in the 26 weeks to 3 April while Mitchells & Butlers saw takings tumbling tumble by 79% during the six months to 10 April.
Navigating a ‘difficult period’
Summarising progress since its June 2020 year end, Oakman also revealed that £9m of equity has been raised, split between £4.9m of new funds and £4.1m of shareholder loan conversions.
Pledges have also been received for at least a further £4.8m of loan conversions, while the cashflow damage from the second and third lockdowns has been offset by Government support in the form of a VAT cut on food and accommodation, business rates cuts and grants.
Oakman also has a substantial pipeline and expects to have 40 operational sites by the end of the 2022 financial year.
Following its acquisition of six Seafood Pub Company sites across the northwest in March, the Grand Junction Arms in Tring, Hertfordshire, and the Woburn in Bedfordshire, Oakman currently operates 35 venues across the UK – including 24 Oakman Inns and five unbranded sites – and employs more than 1,200 people.
“Our CEO, Dermot King, and his team have done an outstanding job navigating our business through this difficult period of time,” executive chairman, Peter Borg-Neal, said of the group’s latest figures.
Very well placed
Oakman also revealed that, when permitted to trade over the past year, its results were on average more than 40% ahead of the market, and that sales in the first week of resumed indoor trading yielded a 38.5% like-for-like sales boost and a total sales increase of 71.4% versus the same week two years ago.
“We are trading very successfully, have retained the vast majority of our colleagues and have grown our estate,” Borg-Neal added.
“In addition, Steven Kenee’s (Oakman chief investment officer) excellent work in attracting equity investment from existing and new shareholders has provided not only financial stability, but also firepower to continue our growth.”
While Borg-Neal expressed gratitude for the Government’s financial support, he caveated that it has highlighted a number of taxation and employment issues which he believes the industry must continue to challenge.
“Most importantly, the steadfast backing of our shareholders and the wholehearted support of our suppliers, landlords and creditors have helped us along the way,” he continued. “We believe that hospitality has been closed and restricted to a far greater extent than was necessary but now is the time to look forward to the future and play our part in rebuilding the economy.
“We are very well placed to take advantage of the strong consumer demand we anticipate in the year ahead and are placing no limitations on the scale of our ambition.”
