Admiral reports ‘significant progress’ with debt pay-back

28-Feb-2013 - Last updated on 28-Aug-2024 at 11:07 GMT

Admiral Taverns was refinanced in November 2009 under the auspices of Lloyds Banking Group

Two-and-a-half-years after Admiral Taverns was hit by the recession, the tenanted pub group has reported a ‘robust’ performance for the 52 weeks to May 2012, disposing of 259 sites for £48.8m and spending £8m on capex to put the business ahead of its agreed refinancing plans.

Turnover per pub up increased by 8.7 per cent while EBITDA was up £96.2m after Admiral reduced its estate by 17.4 per cent. As a result, the group’s debt has been reduced by £196m since November 2009, when it was refinanced through Lloyds Banking Group.

Admiral was recently acquired from Lloyds by an affiliate of private investment firm Cerberus Capital Management with the new owners 'keen to maintain the positive momentum' of the pub group.

In a statement released earlier today, Admiral’s executive chairman Jonathan Paveley said: “Admiral Taverns is focused on becoming the UK’s best operator of tenanted, freehold community pubs. This means concentrating entirely on a sector and style of traditional pub which has been widely derided by many commentators and competitors in recent years.

“The well-documented problems affecting some such pubs are partly the result of changing local economic and employment dynamics, some government and local authority policies, but also often a lack of investment and management attention from successions of owners.

Rising profits per pub

“We have set about investing in our community pubs, working with our licensees and recruiting the best management and staff we can to deliver enhanced support effectively to our licensees.

“We have been delighted by the results of this strategy as they began to be evidenced in the year to 26 May 2012, both in terms of financial performance against budget, which we exceeded by 11 per cent, rising profitability per pub owned, and return on new capital invested.

“But what really pleased us most of all was the dramatic improvement in our licensees’ perception of us and our people – particularly our business development managers – as evidenced by independent industry research.”

Alongside this growth and investment strategy, Admiral has been pursuing a financial deleveraging and non-core pub disposal strategy. The principle attributes of pubs identified for disposal are that they are low-income-generating (for both the licensee and Admiral), are let on short-term agreements, and are generally positioned in poor locations.

'Take any opportunities'

Pub disposals left the business with a pub estate comprising 1,222 houses, helping the group to reduce its debt by £52m to £171m at May 2012, compared to £223m a year earlier.

Commenting on Admiral Taverns’ outlook for 2013 and beyond, Paveley concluded: “The company is in a strong position to withstand the difficult economic environment affecting the UK consumer, and we are now very well capitalised to take any opportunities that may present themselves going forward.

“Investment projects are performing very well and we have a strong pipeline of planned schemes, the number of closed pubs is at a record low and our letting of pubs on long-term agreements is also very healthy.

“We have, I believe, the people to build greater success in the future and we look forward with great anticipation.”