Chief executive Richard Lewis, who joined the business six weeks ago, told The Morning Advertiser (The MA) Amber was likely to reach its 200th site early next year but still had significant headroom for further growth.
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“I think conservatively there’s an estate of 400, I would argue more, around the UK,” he said. “We can more than double our size over the next few years.”
Lewis said the challenge would be maintaining the strength of Amber’s existing estate while adding new sites sustainably.
Southern expansion
Amber Taverns remains heavily represented across the North West, North East and Midlands, while Lewis identified southern England and Scotland as the largest geographical opportunities.
The group currently operates 14 sites in Scotland, with further scope in towns and suburban locations.
“There’s still a number of towns and suburban locations that we’re not in. We’ll be looking, but in a disciplined way.”
Amber has opened between 10 and 15 pubs a year in recent years and already has at least 15 sites expected to open next year. Nine sites have completed but are yet to open.
Upcoming launches include the Saving Grace in Bromley, Amber’s first pub inside the M25, and the Gander in Newcastle, which is due to open in early December. The business also expects to open its 200th pub in January, likely to be in southern England.
Lewis said Amber had no plans to diversify away from its wet-led, sport and entertainment focused model.
“We don’t have food in our sites. We don’t have bedrooms in our sites. I think diversification could well be a great distraction for us.”
Instead, investment will continue to focus on improving the existing proposition through areas including sports viewing, AV, beer dispense, gardens, lighting and entertainment.
What we’ve got works. We’re nowhere near full scale.
Richard Lewis
He said the priority was to make existing pubs more appealing, unlock further revenue through investment and continue expanding the model into new locations.
Around 85% of Amber’s capital is currently directed towards new sites and refurbishments, reflecting the cost of acquiring and fitting out new pubs.
The group targets returns of at least 20% when considering new sites and requires agreement from its senior directors before progressing an acquisition.
Lewis said the same disciplined approach applied to its existing estate, where investment ranges from smaller “sparkle” projects costing around £30,000 to £40,000 to larger “super sparkle” refurbishments of between £100,000 and £300,000.
“If we don’t feel the return is possible, we’ll keep things to being defensive. But where we see the opportunity and we’re confident we’ve got the right offer and a great operator to deliver the upside, then without hesitation we would back that.”
Investment pressures
Lewis said rising build costs and wider operating pressures had made investment significantly harder to justify.
Project costs had risen by “big double digit” percentages over the past five years, while higher taxes and pressure on consumer spending had compounded the challenge.
However, he warned cutting investment altogether would risk weakening the existing estate.
I think the worst thing you could do is not invest in your sites.
Richard Lewis
Despite the pressures, Amber Taverns is continuing to achieve returns above 20% from both new sites and investment in its core estate.
Sustainability investment will also continue, with Amber currently trialling voltage optimisation at 10 sites and waterless urinals at four pubs. The group is also testing water-saving taps and replacing older boilers with more efficient models across the estate.
Lewis described the strategy as “invest to save”, with successful trials potentially rolled out more widely where the economics stack up.
Looking ahead, Lewis said he wanted Amber Taverns to continue growing while maintaining its disciplined approach to investment.
“The business is performing well and we want to do more of the same, but faster.”
However, he stressed expansion would not be driven by chasing an arbitrary site target.
“It’s important that we get the right sites that fit our model, fit our proposition and give us confidence that we can make them work.”
