Pandemic is a challenge, but we had the confidence to progress’ says Liberation boss

By Nikkie Thatcher

- Last updated on GMT

Related tags Property Wadworth Multi-site pub operators

The coronavirus pandemic has given Liberation Group the chance to move forward, according to CEO Jonathan Lawson.

Speaking to The Morning Advertiser (MA)​ after the announcement the business had acquired 21 sites from Wadworth​, Lawson, who joined Liberation in 2019​, outlined how the deal, for an undisclosed sum, came about.

“The real background is our strategy," he told The MA.​ "We had set out pretty simply and in straightforward terms within our group last year, which was particularly in terms in focus on the Channel Islands and in the south west, we are very much focusing on to continue to grow our existing business with our pub and brewing business and within pubs specifically.

“We said we were focused on largely local, rural, premium, food-led businesses and particularly, where possible, we had it invested into our estate to drive that and to increase our accommodation opportunities.

“We said, as and when the right opportunities became available, we would seek to take those and seek to do more of the same in effect, which is more rural, local pubs where we think our premium, food-led offer will work really well.

“These pubs are a great opportunity for us to increase substantially the number of pubs with rooms we have so that's very much linked into a strategy we already had.”

Learning from the experience of financial recession in 2008, Lawson said he realised trends he saw then were coming back.

“It is an absolute step change for us," he continued. "It is a bold decision but we have been really encouraged with performances and trends we have seen within our business.

“I said earlier in the year, when a crisis occurs, some of the trends and consumer behaviours you see going into that crisis tend to accelerate.

“I very much saw that in the financial crisis therefore, some of those trends we were already seeing around staycation, local sourcing, people staying locally, demand for local and fresh products, our own brewed beers, I expected them to accelerate and they have.”

With the support of its ultimate shareholder, it has been able to complete the deal, the CEO outlined.

“You can argue it's a bold move but it very much linked to the strategy we had already set and we are here for the long term," he said.

“Pubs have been around for a long while now and I've always felt pubs adapt brilliantly and this has very much endorsed the strength of the freehold pub model. That's why we felt confident.

“We understand the challenges of the pandemic as much as anybody and this has been a really difficult year but we still felt this is an opportunity we should progress.”

The CEO was reluctant to give a firm figure on how many sites the business is looking to get to and emphasised on any future acquisitions will be about quality and not quantity.

No set number

“We have probably got enough to do now," Lawson continued. "We will work hard on integrating those businesses, welcoming new teams, looking forward to meeting new customers.

“I don't think we ever and in my experience, I would never want to be beholden to a number. If anything, what we have focused on over the past couple of years is growing the average weekly sales of the pubs we do have.

“There's a bit more robustness in pubs taking a bit more and with the food offer we deliver, particularly in our managed pubs, that works. Adding accommodation where possible, that also works.

“There isn't a specific number but as and when the right opportunities becoming available, it's more about quality than quantity. That will be our focus.”

Adding 21 sites to its portfolio doesn’t mean the business will forget about its existing sites, the CEO emphasised.

“The fact we have been able to do this is because we are in a relatively strong position as a business and have been investing into our existing business over the past couple of years. We will continue to do that," he said.

“We have actually got a couple of developments on site at the moment already, one in Jersey, one in the UK so we watch and manage our costs and cash very  carefully but at the same time we have approached this in the right way to make sure we have got investment available for the new pubs we are bringing in and still investment for the right opportunities within our existing business. That balance and approach is one we will take forward.”

Lawson outlined how when pubs first reopened after the lockdown in the spring, sales grew steadily over the summer.

He said: “When we came out of lockdown, we were really encouraged by the strength of our trading performance.

“Throughout August and September and into October, right up to October half term, managed like for likes up to that point were running up to 7%, which was really encouraging.

“It was all the things we have talked about in terms of people staying local, staycations, people working from home, in some of our locations, people that are sometimes not around during the week, being around and coming into our businesses, day time and in the evening.

“Therefore, when we received the opportunity and discussed that with Wadworth, and that's been a very collaborative approach with them, those pubs absolutely for us, fit the same kind of dynamic."

Having businesses overseas and a market for the off-trade has meant Liberation Group has been well placed to weather the coronavirus pandemic, Lawson outlined.

“We are structurally in quite a good position because we clearly are challenged in our UK business in the same way every hospitality business has been at the moment but our pubs have traded well," he continued.

“We have a strong Channel Island business in Jersey and Guernsey. They are performing really well, very resilient for us so that balance of geography, the balance of business that means at any given time we have still been able to drive revenues via our off-trade, breweries.

“That gives us some real balance and some real resilience so when things have been tough this year, we have still been able at all times, still generated some revenue and cash for the business, which has meant, alongside the effort of our teams, we have probably come through and weathered this storm better than most.”

However, the latest acquisition isn’t a signal that Liberation will look to expand across the country but is keen to stay in its heartland.

Growing accommodation

“I don't foresee we would come away from our roots from a Butcome perspective in terms of the south west. Our brewing heritage is here in the south west, very much resonating to Bristol,” Lawson said.

“It's been good that we have been able, with these pubs, to just expand our footprint across a more broader area of the south west and we can also then do the same with our freetrade business at the same time. I don't foresee we will embark on a national strategy, it's very much south west.

“It's an area we understand, it's an area where the trends I've talked about like staycation and local sourcing, they very much work for us.

“Being clear about what we are good at is quite important and then doing more of that is our view of the south west. Never say never but it's unlikely.”

While a nationwide-roll out doesn’t look like its on the cards, the business is looking to grow its accommodation arm, according to Lawson.

He said: “The additional 140 [rooms] that come with these pubs really transform our accommodation side of the business to well over 200 rooms, which is great. We very much focus on pubs with rooms, inns.

“Frankly pubs and inns is what we do. At the right level, that works for us so that kind of number, anywhere from 10 up to 20 or 30 rooms, with a high quality pub is something we can do well and works well for us.

“We would like to do more of that wherever possible. That's very much a pub strategy, we are not straying into hotels, it's very much pubs and inns.”

When asked about his predictions for the trading landscape upon reopening, Lawson urged the Government to understand the trade can’t just keep closing and reopening.

“Firstly it is absolutely critical the Government does not believe we can just flick our businesses on and off like a switch. It's not like that," the CEO said.

“I actually believe it's quite interesting that trading going into the second lockdown was markedly different and consumer different was markedly different to the first lockdown.

“During the first lockdown, every week that went by as we got closer, obviously consumer sentiment got more and more cautious. This time around we have just got busier and busier.

“The final days of trading were incredibly busy, which shows the level of confidence of customers and the efforts we had gone to, in our business and the sector around making sure people feel safe within our environment.

“Our view is, on the basis we are able to open 2 December, there's a high level of demand for Christmas and for our pubs to be open again. We are seeing quite a high level of demand for bookings we are quite confident would be our view but we need the Government to give us that confirmation that we will be able to reopen.

“Then, as we have done, we will trade as safely as we possibly can and put our customers and colleagues first.

“It does feel, the Government, for whatever reason, has singled out the hospitality sector and all of us are scratching our heads as to why.”

He also called on the Government to confirm the definite date for reopening, to help not only pubs but other parts of the industry too.

Lawson added: “The Government's key challenge now is to confirm quickly because it's not just about us as pubs, the supply chain on food and drink urgently needs clarity to the fact hospitality will be open for Christmas. There are key decisions to make on that basis, they need to step up quite quickly.”

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