Recruitment and supply chain issues are causing additional costs and lost opportunity, says the Liberation Group, which has nevertheless reported positive business growth in its latest trading update.
Liberation Group has provided trading updates for the last three months. Audited financial statements for the year ended 30 January 2021 show both Pubs and Drinks Divisions achieved positive EBITDA with an improved liquidity position and a stronger balance sheet.
The Group operates 55 Managed and 64 Tenanted pubs and inns and On and Off Trade distribution businesses across three geographies, under the Liberation brand in Jersey and Guernsey and under the Butcombe brand in England.
Like for like, managed pubs across the group overall have achieved sales growth of 2% with exceptional growth in the UK pubs of +26% offset by declines in the Channel Islands. Growth in the UK Butcombe pubs was generated from sales of Food (+52%) and Rooms (+83%) as the UK pubs benefitted from being well positioned for the post-reopening consumer trends towards premiumisation, local food and drink and staycations.
The Tenanted pubs demonstrated the value of diversified channels to market, generating 8% growth in volumes to like-for-like tenancies with Jersey and Guernsey outperforming the UK. Our tenants were supported with rent discounts during the COVID lockdowns and reopenings to ensure they were in a robust position to recover from the pandemic.
All tenants’ rents were moved back to 100% of contracted levels in all three geographies by June.
The Drinks Division has seen a strong bounce back of On Trade sales in all three geographies, and continued growth of the Off Trade and other channels. Sales of the Liberation Quality Drinks business in the Channel Islands have been 14% higher led by the Off Trade and the B2C website and retail shop in Jersey which has achieved exceptional growth of 53%. Future growth in the drinks division will be accelerated by Liberation Quality Drinks securing a contract with Diageo to distribute its products across the Channel Islands:
Jonathan Lawson CEO commented “It is extremely pleasing to see all of our channels and geographies recovering strongly since reopening and achieving growth on 2019.
“These 13 weeks see our largest sales volumes over the whole year so it is great to be delighting so many customers over such a critical period for us, with the quality of our food offer, our accommodation and our OBV keg products making huge contributions to our growth. But in the longer term there are still many challenges for the sector and for us specifically, with recruitment and supply chain issues causing additional costs and lost opportunity.
“There are also headwinds to come in the future UK tax regime - we continue to lobby the government to convert the temporary VAT reliefs into a permanent reduction and to abolish the inequitable system of business rates.”
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