It also reported an operating loss before exceptional items of £4m and a reduction in earnings before interest, depreciation and amortisation (Ebitda) from £3.7m to minus £1.9m.
However, the 158-year-old business said “there is now some cause for optimism” after Covid hit it severely throughout the financial year with lower levels of hospitalisations and increased vaccination numbers boding well for a better future.
It added: “The decline in performance was, of course, due to restrictions in place while we were able to trade and the significant periods that our pubs were forced to close altogether. The restrictions and forced closures meant we lost turnover in the year of approximately £21m.”
Abrupt end to positive trends
Hydes operates a total of 47 pubs – tenanted and managed sites – in the north-west of England. Of its managed estate with accommodation, it said sales in August 2020 were boosted by the Government’s Eat Out To Help Out scheme with profits £238,000 higher than the same period in 2019. But tiering restrictions imposed later “brought an abrupt end to these positive trends”.
Significant spending was made during the year to ensure sites complied with Covid safety guidelines along with the associated costs of closing and reopening pubs, destroying stock, improving outside areas and refurbishing a number of sites while they were closed.
The tenanted estate also suffered the same problems while the pubco supported tenants through rent reductions up to 90% while closed.
Hydes brewery saw a decline in own-brewed volumes, which was also seen nationally, and opted to diversify its offer. From the start of 2021, there has been investment in kegging and beer processing equipment to allow production of craft keg and lager products to complement the existing cask ale lines.
Additional financing secured
Four sites were disposed along with the assignment of the lease for Camarena in Wilmslow, which achieved total sales of £1.3m and managing director Chris Hopkins was replaced by Adam Mayers after serving the business for 22 years.
On the future, Hydes non-executive chairman Richard Lancaster said: “Some uncertainty remains as we look to the future. The primary focus and my priority for the company will be to reopen the pubs and brewery in a way that not only returns the business to profit but also keeps our colleagues and customers safe.
“Since the year end and while all our sites have been closed, we have seen our net debt levels rise to £11.6m (2020: £7.3m), despite receiving £5.3m in the form of Government support from grants and furlough payments. We have secured additional financing with RBS and increased our facilities to £18m on largely existing terms.
“A number of sites were able to open for outdoor trading from 12 April 2021 and all sites were opened from 17 May 2021. Initial sales have been encouraging and have been ahead of the company performance from two years ago.”
