Wells & Co reports ‘impressive growth in face of continued challenges’
The group, which is approaching its 150th anniversary, stated the positive results was due to considered cost control and a focus on consolidating capital investments made the previous year, driving sales to £62.3m – up £7m year on year.
Overall earnings before interest, taxation, depreciation and amortisation rose by £800,000 from £8.7m in 2022 to £9.5m in 2023.
Its leased and tenanted arm, which consists of 130 pubs, helped increase total revenue by 6% while managed sites delivered a sales rise of more than £3m across the estate, with accommodation revenue increasing by a quarter (25%).
Cost pressures
Group CEO Peter Wells said: “I have been delighted to see this growth being delivered from these two critical divisions of the business.
“The improvement from our pub partners in particular shows their resilience and dynamism, with sales gradually returning to a semblance of normality during the post-pandemic recovery.
“However, we are still acutely aware of the cost pressures the whole industry continues to face and the constant challenge to covert sales into profit.
“In response to this, we are doing as much as possible to provide support and offset cost increases.
“Just a few ways we have done this including holding the cost of our brewed beer range, introducing utility-saving measures in cellars as well as implementing voltage optimisation equipment, where possible installing electric car charging points to encourage increased dwell time and lastly providing more resource to help with sales building plans.”
In the trading update, Wells & Co reported its French estate of 16 managed pubs saw a substantial sales surge, contributing £2.2m.
The business said this was primarily down to the success of France’s national team during the football World Cup at the beginning of the year and rugby World Cup at the end.
Political turmoil
Also at the end of last year, the business added its first new French sites since 2019 – the House of Parliament and HMS Victory in Bordeaux, while it also has further site acquisition plans for this summer.
Wells added: “Our financial year began with political turmoil following Kwasi Kwarteng’s mini budget, which was quickly followed by Liz Truss’ resignation as Prime Minister.
“Throughout the year, we then saw inflation running at more than 10%, utility cost hikes and the cost of food up nearly 20%, alongside a rise in interest rates from 2.25% to 5.25%, which had a particular impact on mortgages and a knock-on impact on the rental market.
“Meanwhile, there was a backdrop of discontent with strikes undertaken by the Royal Mail, teachers and those in the NHS, with the rail strikes having a particular impact on our London pubs, as commuters stayed away.
“In the face of these unprecedented challenges, we were delighted to see sales improving by £7m to £62.3m and statutory EBITDA increasing by £800,000 to £9.5m.
“Alongside this, our sustainability efforts have also helped deliver better profitability through energy-saving initiatives, while also lightening our touch on the environment, ensuring efforts are aligned with our triple bottom line vision of people, planet, profit.”
