Pub and brewery firm The Liberation Group has reported an “encouraging” start to the year, with the impact of the energy crisis and inflation on its finances “beginning to calm”.
The Jersey-based parent company of West Country beer and hospitality brand Butcombe oversees an estate of around 140 pubs, made up of managed and tenanted sites, with accommodation of more than 400 rooms.
The firm previously warned its utility bills were set to double and slammed the government and suppliers over the handling of the energy crisis. In a trading update, the company said while it had taken a "significant" hit from rising energy costs, which was "not sustainable" to pass on to customers, it could see “a route to a lower cost level” towards the end of this year and next year.
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Bosses said wage costs had been “significantly improved” and it had “almost entirely” stopped employing agency kitchen staff. They added that inflated prices for ingredients such as butter and oil were beginning to fall.
The board said it had seen 4.7% like-for-like growth at the group’s managed portfolio of around 80 pubs on the UK mainland, which stretches across the South West to London, during the first quarter of its current financial year. This was driven by a 13.9% like-for-like rise in its accommodation business.
Growth levels were similar for the nine months to January, while directors said average earnings before interest, taxes, depreciation, and amortization at the firm’s 58 tenanted venues was almost £95,000 per pub during the full year to January - up from pre-pandemic levels of around £90,000.
The company added that volume levels for its brewing business were also rising, up by more than fifth during its last full-year, with one of its signature drops Butcombe Original now a top 10 UK cask ale, and number two in the South West.
Liberation said it had now completely integrated the 22 pubs it had taken on at the end of last year in a combination deal with Cirrus Inns at the back end of last year.
Chief executive Jonathan Lawson said: “Looking forward, the outlook for the rest of this year remains uncertain given the stubbornly high inflation rates, rising interest rates and the resulting impact on consumers' disposable income. But we have been cautiously encouraged by the start of the year and are confident in the quality of our business, offer and above all our teams.
“All markets and channels offer us the opportunity to grow market share and our work over the last few years places us in a strong position to seize these opportunities. Targeted investments have already commenced, and we have a clear pipeline of internal investment opportunities available to us, including additional rooms.”
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