The company, which runs 180 pubs across the south of England and brews Badger beers, added trading since the year-end has been “very encouraging” despite a “heavily weather-affected July”.
In its results, H&W said underlying profit before tax recovered £4.4m (2022: £1.6m) while total profit before tax was £10.4m (2022: £11.2m) as it benefited from profits on disposal of non-strategic assets and the marking to market of its interest rate swaps.
Net debt rose to £55.7m (2022: £45.3m) as it completed the purchase of three new managed houses (the Red Barn, Woolacombe, Devon; the Wiremill, Lingfield, Surrey; and the Royal Lion, Lyme Regis, Dorset), opened the Frog, Mindenhurst, Surrey, and maintained its investment across its ‘managed house’ and ‘business partner’ estate.
H&W chairman Anthony Woodhouse said: ‘Our post-pandemic plan was to return to close to normal levels of trading and profitability but, as I warned last year, the terrible war in Ukraine had a profound effect on the economy with rapid inflation not seen since the 1980s.
“Although revenue levels were encouraging, margins were squeezed as costs and wages rose at a greater pace than we were able to pass on to our guests and customers. In this environment, the profit outturn was a creditable performance, although still well below pre pandemic levels.
“Our managed house business, where our results are more operationally geared to the volatile external environment, suffered the brunt of the margin squeeze.
“‘Business partnerships’ had a solid year performing as expected, showing the robustness of this business model. We have a high-quality estate with high quality Business Partners with who we genuinely work in partnership. We were delighted to be awarded the Publican Awards 2022 Tenanted/Leased Pub Company (up to 500 sites) of the year in recognition of this.”
Strong lfl sales growth
He added the business continued to reap the benefits of its Badger and Rio brands and although off-trade volumes fell as the on-trade reopened, sales were also recovered through new contract and own label business.
He concluded: “Apart from a heavily weather affected July, trading since the year end has been very encouraging with strong like-for-like sales growth across the estate.
“It is clear the divergence in performance between well-invested pubs with the right offer and correct team levels and those not in that position is becoming increasingly marked.”