Oakman Inns reports ‘impressive growth’ despite current trading conditions

(L-R) Operations director, Alex Ford; chief executive Peter Borg-Neal and Joseph Evans, finance director
13/03/2018 - 10:27
Independent pub company Oakman Inns has today reported “impressive growth” despite current market conditions.

Claiming that its 20-strong portfolio is “proving to be not only resilient in the current market, but continuing to successfully expand,” founder and group chief executive, Peter Borg-Neal, puts this down to the company’s “ever-growing purchasing power,” “flexible, premium pub model” and continued openings.

He said: “I take no pleasure from seeing any business struggle, but the over-expansion by big-name brands did impact on prime and even secondary site rentals and in the current market those demands may and should ease.

“I suspect rent reviews over the next two years are going to be very different. We have already benefitted from one such scenario where we have a site that has been trading well for nigh on five years we have owned it, and is due for a rent review.

“Six months ago we faced a situation where a well known and very good restaurant operator was about to take over a similar, near-by site to ours but had agreed to pay 60% more rent than ours… However, they have now decided to pull out of the deal. We believe the combined benefit of this change is worth well in excess of £100k profit a year to us.”

While he admits the business “is not immune to the cost pressures the industry is experiencing” – increasing business rates in particular – he did say Oakman’s “ever-growing purchasing power means that we are able to mitigate increases in our cost of goods and thereby maintain our operating margins” and that is performance “underlines the attractiveness of a flexible, premium pub model.”

Borg-Neal continued: “Most importantly of all, our sales remain strong. Our like-for-likes for the year to date stand at 7.1% for the 49 weeks ending 11 March.

“Our new site, The Beech House (Amersham) has launched brilliantly - taking over £50k net of VAT in its first week - despite the heavy snow – and over £55k net of VAT last week - almost 50% higher than our investment target.

The group is also due to open The Cherry Tree (Olney) at the end of the month, followed by the Four Alls (Welford-on-Avon) and The Royal Foresters (Ascot) in June.

Having “recently gained planning permission to develop The Polecat (Buckinghamshire) and with an application in process for the Walter Arms (Sindlesham),” Oakman has also signed an agreement to lease a new site in Epsom and is “very close” on five others.

Borg-Neal said: “We continue to make good progress in other areas of the business – (currently raising £10.2 million in debt and equity to fund further growth in 2018/19) - but investment in our people is the most important.

“Oakman Inns came 17th in the ‘Sunday Times Best Companies to Work For 2018’ - our fourth successive top 50 finish - and are about to launch our training APP, Oakipedia.

“We continue to reinforce our values-led operating system, S.P.E.E.D., across the business which helps to sustain our high levels of customer satisfaction.”

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