Brewing Up Changes: Brewhouse & Kitchen's Mixed Progress
Posted by Emily on 17th Jul 2024
Brewhouse & Kitchen, the UK's largest brewpub chain, has reported mixed progress for the fiscal year ending 30 September 2023. Despite some setbacks, the company has shown resilience and adaptability in a challenging economic environment.
The company's like-for-like sales experienced a slight decline of 0.9%, yet they remained 2.3% above the levels seen in 2019 before the Covid-19 pandemic. Group turnover rose by 2% to £16.7 million. The operating loss was reduced to £700,000, significantly improving from the £2.1 million loss reported in 2022. Pre-tax losses decreased from £2.3 million in 2022 to £1.2 million in the most recent financial year.
Brewhouse & Kitchen noted that while the craft beer sector continues to grow, with strong sales of its own-brewed beer, food sales have been affected by the cost of living crisis, which has led to consumers tightening their spending. The company operates 22 sites across the UK, with its newest freehold brewpub in Chelmsford performing exceptionally well and adding considerable value.
The company implemented several pragmatic and innovative strategies throughout the year to reduce head office costs. These measures included eliminating the operations director role, reducing the number of operational managers from three to two, and making further reductions across HR, sales, business support, and marketing departments.
Despite the challenges anticipated in 2024, Brewhouse & Kitchen remains optimistic. The company is conducting a strategic review to determine the best way to create liquidity for its investors. Director Kristian Gumbrell highlighted the management team's strength, the estate's quality, and a robust balance sheet as key factors in the company's confidence.
Gumbrell also noted the supportive relationship with the bank, which has extended a term loan due from September 2023 to September 2024. Negotiations are ongoing to extend this facility further and potentially increase the loan as part of a broader refinancing package. If these negotiations are unsuccessful, the directors are prepared with alternative means to secure necessary funds, ensuring the company's continued operation. Additionally, the company completed a rights issue post-year-end to raise funds for future growth.