Chestnut Group, which owns and manages 22 sites, is targeting further single freehold site additions at an accelerated pace.
The group, which acquired the White Horse in Blakeney last month, followed by the Red Lion in East in early July, has a further four sites in legals, Turner revealed.
“Over the previous 18 months we have deployed a lot of capital. We have expanded the business dramatically, and somehow we’ve been able to do that by weaving it into the day to day business,” he explains.
After breaking through the 20-site mark, the business; leaders have taken stock to finetune its tech, finance, procurement and operations functions.
As part of this work, the group, last week announced it had made several strategic appointments as it pushes forward with its three-year plan.
Strategic appointments
Henry Fairbanks has been promoted from director of operations to director of acquisitions and wholesale, while Ollie Tresize joins the business as head of operations.
Chestnut, which has a mix of pubs with rooms and ‘big house hotels’, will remain focused on acquiring single sites.
“In a perfect world, I would like to step it up so we can do more single sites faster,” Turner says.
It is also investing in its room estate, which comprises more than 400 bedrooms. It recently added three rooms at the Crown in Stoke by Nayland, has plans to develop Le Strange Arms & the Mariner, which it acquired last summer, and has permission in place for a further six bedrooms at the Packhorse.
Including the wholesale arm of the business the three-year plan is to “effectively double the size of our business”, the managing director explained.
While the group is not immune to the challenges facing the wider pub sector on costs, Turner said like-for-like growth was between 5-10%.
Changing dynamics
The business is also benefiting from inbound migration to the east of England, particularly from East London – which has seen population growth of more than 25% over the past 10 years, as well as the growth of cities such as Cambridge and Chelmsford, infrastructure projects in the region, and high levels of tourism in Norfolk.
Turner adds: “There’s a lot happening here. You’ve got these big macro factors which are changing the dynamic of the East of England. And if you’ve got all that working in your favour, your customer base is getting bigger.”
The tough operating environment is lending itself to more opportunities for the group, which seeks to acquire from individual long-term owners, who either have no succession, don’t have the balance sheet to invest, or are looking to move on due to the challenging market.
Turner is also talking to investors to help fund the next stage of the business’ growth.
“We have raised capital all the way through, and we’ve got a really good shareholder base who are already helping contribute to growth. But as the business gets bigger, the numbers get bigger and we need some help”, he says.
Chestnut also part owns Barsham Brewery, owns wine merchants Peter Graham Wines, luxury fragrance brand Connock, and The Bottle Shop – the group’s direct to consumer wine business – and is looking to capitalise on its diversified portfolio.
Fairbanks worked for Heineken for a number of years and so will help help the brewery build sales away from just Chestnut.
The group acquired Connock in August last year, and developed a new range of toiletries called Verdant, which are used throughout its portfolio and are then available for guests to buy.
This story was originally published in The Morning Advertiser’s sister publication MCA here.
