EBITDA (earnings before interest, taxation, depreciation and amortisation) at the Devizes, Wiltshire, business, reached £3.64m, up from £1.65m for the 2021 financial year (FY21).
Wadworth, which operates 19 managed houses and 132 tenanted pubs, reported turnover of £36.3m versus £25.1m in FY21, gross profit of £21.9m (FY21: £14.8m) and a loss before tax of £5.4m (FY21: £4.0m).
Chairman Charles Bartholomew explained the business, which brews beers such as 6X Original Ale, Henry’s IPA and Horizon golden ale, started 2022 with a plan for a more normal year following Covid but “this has not been the case with economic and political uncertainty at every corner”.
High inflationary environment
He said: “The effects on the hospitality and brewing world of a high inflationary environment have been significant.
“Our results were behind our expectations for the year as we could not have predicted the Russia/Ukraine conflict and the impact on costs that this would have across every cost line, with the most extreme being our utility costs which have increased by £725k versus the prior year.”
On the business’s new brewery, he said: “We started the build of the new brewery in May 2022 and have made excellent progress towards creating a facility that will give us considerable cost savings and flexibility on product range, including a canning and bottling facility.
“We are into the final stages of the project and have managed to ensure it is still on time and on budget, even with the current cost pressures on building works.
“As the new brewery is expected to be up and running more quickly than initially anticipated, we have accelerated the depreciation on the old brewery, which in turn sees additional depreciation of £1.3m recognised in this year’s accounts.”
Tenanted pubs fared well
Wadworth’s tenanted division has performed well throughout the year and although it had just one pub to let at the beginning of the year, a number of its licensees left due to financial pressures and staffing issues.
For its managed houses, “it has been a very challenging year with conversion to profit impacted by increases across every cost line,” Bartholomew said. “Utility bills have been the biggest issue. The teams were all tasked with reducing utility consumption where possible, but we still ended the year with a cost increase of over £500k versus FY21.
“Labour shortages were particularly apparent in the kitchen and this resulted in a number of pubs having to shut for two days a week and agency chefs used at inflated costs.”
However, the effort to drive the top line began to materialise in the last few months of 2022 with December sales up 29% on the prior year.
Bartholomew added: “We are in a good position heading into 2023 and are still improving with a much more settled team in place and an opportunity to convert the sales into profit.”