Wells & Co claimed almost £4m in furlough support

In a trading update for the year to 27 September 2020, the business outlined how the pandemic and enforced closed of all sites meant sales across the 200-strong estate fell from £53.2m to £38.5m.

Wells & Co also continued with the opening of its new brewery, Brewpoint, despite the coronavirus crisis last year.

Net debt levels increased to £29.5m, compared to £16.7m in 2019, as a result of the pandemic and the company’s planned capital investment in Brewpoint.

The business managed to trade for 25 weeks of the year, was fully closed for 15 weeks and traded with restrictions for the final 13 weeks.

Positive position

It has delivered £3.6m of earnings before interest, taxation, depreciation and amortisation (EBITDA) amid the pandemic.

Group managing director Peter Wells said: “To deliver this while also fully supporting our 170 pub partners sites – Wells & Co conceded all commercial rent while pubs were closed – is a positive position we can build upon in 2021.

“The year to September 2020 has seen our team face a challenge of Covid-19 head on. The hospitality industry as a whole has suffered as a result of lockdown and trading restrictions.

“We’ve learned from the Covid-19 pandemic that, while our business model has proven itself upon reopening, we need to continue to invest in our people and our pubs to allow us to deliver experiences our customers would recommend to their friends. To do this we will continue to focus on the roll-out of new managed sites in the UK and France.

“Commitment to continued development and growth is already being demonstrated post-year end with the opening of one new managed house, the Flint Cottage in High Wycombe, Buckinghamshire and the commencement of works at the Gordon Arms in our hometown of Bedford.”

Long way to go

Wells highlighted the support it had received from the UK and French Government amid the closures during the past 15 months.

He added: “In total, by March 2021, the group had received £6.6m of support – £4.5m from the UK Government and £2.1m from the French Government.

“Furlough support has been £3.9m of this (UK and France combined), £1.3m has been UK savings on business rates and local grants and £1.1m has been French support to the hospitality sector, with the VAT reduction to 5% having £300,000 of benefit.

“This support – alongside our internal decision to cancel shareholder dividends throughout the 12 months in question, preferring to bolster our pubs as much as possible – has helped to cover some of the financial pain of lockdown, although the costs to the business have significantly outweighed the support on offer.

“What will be essential is ongoing support for the hospitality sector as it looks to recover. While pubs are now reopening and customer demand is returning, there is still a long way to go to get hospitality back to where it was before being so significantly impacted by lockdown policies and the fallout of Brexit, which has helped fuel the chronic staff shortages in the hospitality and logistics industries.”