McManus Pub Co reports encouraging H1 trading performance: McManus Pub Company has reported an encouraging trading performance in the first 26 weeks of its current financial year, with like-for-like sales holding up well and on par with the same period in 2022. The Northampton-based group said that as cost of living increases bite, it is seeing a sales mix swing from food to wet led pubs. It comes as the group, which currently operates a predominately freehold pub estate of 21 pubs across Northern Home Counties and Essex, reported that during challenging year – 52 weeks ended 30 July 2022 – it had seen “significant progress”. It said that sales returned to pre pandemic levels and the group now has a refurbished estate from which to move forward with “a secure financial base and experienced management team”. The group added three freeholds to its trading estate during the year and said it will consider further opportunities “as they arise to drive sustainable growth”. The company said that group sales in the year exceeded pre pandemic levels, with sales revenue up by £5,818,527, 66.4% to £14,586,593, and like-for-like sales up 17.1% on pre pandemic trade. Group operating profit increased by £666,193 to £1,804,559, a “significant uplift on pre pandemic levels”. Pub Ebitda stood at £2.889m (2021: £2.256m), while group Ebitda was £2.199m (2021: £1.501m). Pre-tax profit stood at £1.750m (2021: £976,000). It said that payroll cost increased £659,096 and average pay rate increased 9.3%. On higher sales payroll cost as a percentage of sales reduced to 31.0% (2021 34.9%). During the period it acquired the freehold coaching inn, The Old George Hotel, Stony Stratford, and The Windmill, Northampton. Both purchases were funded from cash flow. It said that significant investment and refurbishment work was undertaken during the year with £2,497,296 invested and over the last three years total £4,152,816 invested. The business said that food and drink inflation escalated during the year placing pressure on gross margins. It said: “For 2022, due to no pub closures and hospitality VAT rate reduction the profit margin increased to 72.6% (2021 – 72.5%). Where possible we have attempted to pass cost increases on whilst maintaining good value to our customers and remain price competitive. The shortage of labour was a challenge throughout the year, average pay rates increased by 9.3% due to the skilled staff shortage of and national minimum wage increase. Even with these shortages we were able to keep all pubs open without restricting trading hours. Pub and head office payroll cost increased £659,096 on higher trading activity, after furlough grant net off the payroll cost as a percentage of sales reduced to 31.0% (2021 34.9%). Due to rising energy prices the group has focused on reducing energy usage as much as possible through installing energy saving equipment and encouraging best practice, average consumption across the pub estate has been reduced by 12%. During the year, a former £1,750,000 HSBC revolving credit facility was termed out on a 11-year repayment term, increasing total term debt £1,110,785 to £7,727,873. Additionally, the group entered into deferred interest rate SWAP agreement, hedging two thirds of its term debt at 1.15% fixed interest rate from March 2023. The group remains in a very strong financial position and its operational gearing remains low.” Gary McManus, chairman of McManus Pub Group, said: “Post pandemic through challenging conditions the group has achieved a strong recovery. Acquisitions and refurbishments have strengthened the pub estate. Together with an experienced management team, the group is in healthy position to weather future storms and expand when appropriate.”