External sales and increased managed investment fuels growth at Robinsons Brewery

182-year-old family run Robinsons Brewery has reported an increase in continued operations turnover for the year ending 31st December 2019.

During the year, Robinsons Brewery sold its free trade business to LWC, allowing them to focus on its tenanted pubs, managed pubs, contract brewing and bottling businesses. The firm had a total group turnover of £75 million, an increase of £4.4 million.

The Stockport-based independent brewer and pub operator, which operates 257 pubs, inns and hotels across the North West, had a progressive year in which they acquired 7 pubs including the Individual Inns business in December 2019. This acquisition has contributed towards the doubling of the number of managed pubs to 20 pubs by the end of the year with 165 letting bedrooms.

Additionally, following a record investment year in the pub estate during 2018, the company invested a further £7.6m including significant investments at 19 pubs during 2019 alongside many smaller developments.

Robinsons Brewery has also reported an increase in total group operating profit of 13.5% to £3.7m for the year ended 31 December 2019.

Results were boosted by a strong trading performance and effective cost management across the business. In particular, the managed pub business increased significantly contributing £14.3m to turnover which was an increase of 28.8%.

The tenanted estate turnover grew by 2.0% and profit by 2.5%. This was despite a reduction of 9 in the number of tenanted pubs, through one disposal and eight transfers to the managed estate.

William Robinson, Managing Director (Pub Division), comments:

We were understandably delighted to have acquired the Individual Inns business last December. This contributed to the doubling of the number of managed sites providing accommodation, as well as enhancing our estate in Cumbria and adding our first ever managed pubs in Yorkshire. In addition, we have completed some great managed investments including the historic Legh Arms in Prestbury and the George III in Penmaenpool – surely one of the best estuary views in the UK. Over the last five years, we have developed a managed estate with pubs in exceptional locations; we remain acquisitive for the right opportunities.

However, the ongoing development and success of our tenanted estate underpins our business and so to provide the best platform to continue this, we were delighted to create the new role of Tenanted Operations Director in January 2020. Given what has happened since then, I am relieved we now have an enhanced senior team to support our tenants.

We have now invested £34.4m in 146 pub developments in last 6 years giving us a great estate and in the current climate I am glad that we have such strength in ‘staycation’ locations in places like North Wales, Derbyshire and Cumbria with little dependency on city centres. However, the industry cannot come out of the current period unsupported and will continue to support the great work of the BBPA as they seek to secure an extension of the Business Rates support and address their wider reform, as well as seeking a long term continuation of the VAT reduction.

Managing Director (Beer Division), Oliver Robinson, comments:

In another tough year for the beer category we were delighted with the success of our own Helles Lager, stout and keg IPA. The combined 5,000 barrels of these beers has helped offset the recent decline in cask beer.

2019 saw modest like-for-like growth across wines, spirits and soft drinks as well as the beer category, but we remain concerned about the future of the latter and would encourage the government to cut beer duty further to help brewers begin the long road to recovery. We have beer duty levels that are seven times those seen in Spain and Germany and over three times higher than the average in Europe – the BBPA policy to cut duty by 25% and support Britain’s national drink is one we will be supporting.

The sale of our free trade business to LWC means we now have a more simplified, but more focused business with clarity looking towards the future. Additionally, the boost to off trade sales through this year has meant that our bottling and packaging operations have never been busier which gives us much optimism as we look to plan forwards.

Finally, I am delighted that we have our own warehousing, logistics and cellar services teams. This proved we were able to plan with confidence and take some of the pain away from our tenants and managers through the lockdown period. Keeping control of these areas was and will continue to be a vital part of our USP; it proves its worth through difficult times.

Looking to the future, William Robinson concluded:

Whilst these are obviously troubling times for all, our family business is well-funded and we secured independent bank funding outside the government backed CBILS loans. We have a strong leadership team who are experienced and focused to meet the present challenges. We will continue to grow our managed business through investment and acquisition, additionally our tenanted strategy of long-term sustainable growth has not changed. To date our considerable support for our licensees has included a 60% rent reduction between March and November as well as the replacement of all their spoilt beer. Presently the hospitality sector looks towards this autumn and winter with understandable concern and we will have to plan for 2021 with caution. Longer term, we remain optimistic about the opportunity for growth while remaining committed to supporting our great licensees and team members at the brewery and within our pub estate as much as possible.

Oliver Robinson added:

We are seeing a continued demand for our contract services, namely brewing and bottling, but are also seeing positives in the off trade and export businesses. Own Cask beer sales are sluggish, but our craft keg beer range is seeing very positive increases and demand within our own pub estate across both managed and tenanted. We continue our support and stance for the need for reform of SBR (Small Brewers Relief), an extension to the VAT cut and a continued drive to see beer duty being reduced by 25% if we want to see both the brewing and pub sectors in the UK prosper and thrive, rather than be damaged irrevocably.