Brewer and pub chain Camerons has revealed plans to treble its pub estate to 200 outlets in the next five years after identifying several growth opportunities within the business.
Founded in 1865, Camerons has been under its current ownership since 2002. The Hartlepool-based company runs 67 pubs as well as brewing its famous Strongarm Ruby Red Ale, Trophy Special and several other beers outsourced from other breweries, but it is gradually disposing of its unprofitable pubs.
Annual accounts for the firm, which employs 145 staff and is 76% owned by chairman David Soley and his family, show one outlet was shed in the year to April 31 2013 and a further two were disposed of shortly after the year end, generating around £1.1m in proceeds, and it said more pubs will be sold off in the coming years.
The expansion plans come as the brewer announced a fall in sales for the year, from £68.9m to £54.3m, a figure it said comes as a result of a change to the beer production mix, in which there has been a move in volumes from packaged to bulk sales – sales which are excise duty suspended resulting in significantly reduced turnover.
An impairment charge and exceptional costs of £500,000 also led to a drop in last year’s pre-tax profit of £1.55m to a loss of £406,000, while earnings before interest, taxes, depreciation and amortisation of £5.8m remain in line with last year’s £5.9m.
Despite the fall in revenues and profit the firm said it was pleased by a strong financial and operational performance in what remains a tough market, and that it had established growth plans within the contract brewing, own brands and pub divisions.
In the directors’ report accompanying the accounts the firm said: “We have continued to reduce net debt by £4.2m in the year to leave £28.1m at the year end. This has resulted in a strong ratio of net debt to Ebitda of 4.8 down from 5.5 at April 2012.
“We are continuing to invest in our core pub estate whilst maintaining our strategy of disposing of underperforming, non-core assets.
“Pubs remain a core element of our business and therefore in parallel with the disposal of non-core assets we have invested in an improved operational pub management team, and embarked upon an acquisition strategy to acquire additional freehold and leasehold sites.
“Our ambitions for growth are to achieve a combined pub estate of around 200 pubs in the next five years.
“In summary, growth opportunities have been identified within the contract brewing, own brands and pub divisions as we look to improve base line profitability and further debt reduction is anticipated in the 12 months to April 2014 arising from strong trading cash flows and disposal of non-core assets.”
The company said its brewing business remains robust and there is significant opportunity to expand contract volumes in future years.
Own brands, a key element of the firm, have also been expanded to include new cask ales IPA and Gold Bullion, after the firm spent six months trialling a range of new beers using new hop and malt varieties with brewery staff and trade customers.
A rebranding exercise of the brewing business which gives a new look to the cask ales also came to fruition in July.
“ We are seeing the fruits of our labour as we gain a number of significant local and national listing for our products,” the company report added.