Hawthorn Leisure reveals 'strong' third year results

By Mark Wingett, MCA

- Last updated on GMT

Great Culture: Hawthorn Leisure announces 2016 results
Great Culture: Hawthorn Leisure announces 2016 results

Related tags: Greene king pubs, Investment

Hawthorn Leisure, the Avenue Capital-backed pub operator, saw group EBITDA increase 10.1% to £9m in the year to 25 December 2016, its third year of “significant growth” since its creation in May 2014.

The Gerry Carroll-led group, which currently operates 312 pubs, including 53 managed sites, saw turnover in the year increase 12.4% to £41.5m, whilst outlet level EBITDA during the period climbed by 8.4%. EBITDA for the year across its 259 tenanted pub grew 7.3%, whilst like-for-like sales in its managed sites climbed 5.6%.

The company’s managed sites, which saw EBITDA growth of 13% during the year, generate a third more profit per pub than its tenanted pubs. It acquired 11 sites from JD Wetherspoon last May for £5.8m.

As at 30 June 2017, group EBITDA was up 9.5%, with growth being achieved across both its trading regions – England and Wales (208 pubs – EBITDA up 8.9%) and Scotland (104 pubs – EBITDA up 7.2%).

The group expects EBITDA to climb by 10% to reach c£11m by the Q1 2018.

By the end of 2017, the company will have invested £13.5m across its estate over the last three years, with two-thirds of its pubs being refurbished and maintained. It said that its capital investments were producing “excellent returns” of over 30%.

Well established 

In June, the company completed the transition to new supply chain agreements with Marston’s (England & Wales) and C&C Group (Scotland).

Carroll told MCA​: “After three years of trading, the business is now well established with an infrastructure and teams in place to operate both tenanted and managed businesses. This is a strong set of results reflecting the hard work of the Hawthorn team during the year. The continued benefits of ongoing capital investment in our core estate, a focus on maintaining strong partner relationships and the opportunistic disposal of non-core assets is evident in the strong like for like growth we have achieved in the period.

“We have a great culture in Hawthorn that is built on working collaboratively, being fast-paced and agile in our thinking. This energy has undoubtedly led to our success during 2016 and it’s pleasing to see a continued trend of strong like for like growth in the first half of 2017.”

Hawthorn was created with the acquisition of 275 Greene King pubs in May 2014 for £75.6m, followed closely by a purchase of 88 tenanted and leased pubs from R&L, the pub portfolio formerly part of property tycoon Robert Tchenguiz’s property empire in a deal believed to be valued at c£30m.

Related topics: Other operators

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