The East Anglia-based pub and inn operator – which triumphed at The Publican Awards in 2022 in the Best Pub Brand/Concept category – further improved site-level (EBITDA) by 88% to £6.14m, while achieving group EBITDA of £2.69m, compared to a loss of £0.33m the prior year.
Loss after tax narrowed to £2.3m from £3.3m in FY23.
The improvement was attributed to cost control and operational efficiency, according to the group’s latest accounts on Companies House.
The business remained acquisitive during the year, adding sites such as The Old Bridge in Huntingdon and The Lifeboat Inn in Thornham to its portfolio. Additional businesses and organic growth have led to a 40% increase in team members to 645.
Three areas
The group has segmented the business into three areas – pubs with rooms, big houses, and commercial – as its scale and complexity evolves. Its growing portfolio generated more than 600,000 guest visits during the year, while the loyalty programme was finalised in early 2024 and has a current membership of 14,500.
The programme has resulted in more targeted marketing as well as brand development, for example the launch of The Bottle Shop in 2023 in tandem with the acquisition of The Old Bridge Wine Shop, providing an online platform for guests to purchase wine away from the properties.
This came after Chestnut’s acquisition of Peter Graham Wines in 2023, which provided a logistics foothold and enabled additional procurement efficiencies.
Chestnut has also focused on refurbishing its existing properties. The Packhorse Inn – its first site – saw the addition of eight new bedrooms, a ‘barn’ style dining area, a dedicated pub/bar area, and a bigger kitchen.
Additional focus on the bar area is an important component of the group’s ‘wet sales’ strategy, which aligns with an all-day bar snack offering. Doubling the size of the kitchen, meanwhile, has increased capacity while improving the working environment for the team.
Portfolio increase on rooms
Accommodation, another core component of the business, saw the number of bedrooms across the portfolio increase to 305 as of October this year.
Since year end, Chestnut has refinanced its secured debt over its freehold estate with Metro bank. The new two-part facility includes a £30m term loan facility and a £10m revolving credit facility to allow the group more agility in its strategic choices.
Founder Philip Turner said in his statement accompanying the accounts: “Chestnut is now 11 years old. The economy and specifically the hospitality sector has been thrown a few curve balls along the way.
“Changing drinking and eating habits, use of social media to influence decisions, the importance of business diversification with accommodation and now we are very focused on adapting the business to challenges presented by the 30 October Budget.
“The business has demonstrated in 2023-24 its capability to drive improved profitability conversion, exit properties to unlock better return on capital, acquire and develop new business within an appropriate financial target – while all admirable it is crucial that we “focus on delighting our customers, and don’t waste energy on things outside our control, such as the market and competitors” (Warren Buffett).”
