Community pub company of over 700 sites, Hawthorn was profitable and cashflow positive in the first half of its financial year, despite the significant disruption of the pandemic. In other news, the group will be now known as Hawthorn rather than Hawthorn Leisure.
Financial highlights for HY21
• Underlying Funds From Operations (UFFO) of £9.3m (HY20: £26.4m)
• IFRS loss after tax of -£92.3m (HY20: -£21.3m) mainly due to non-cash reduction in portfolio valuation
Operational performance for HY21
• Completed disposals of £50.2m, at a blended NIY of 6.7% and 6% discount to March 2020 valuation
• Collected or alternative payments agreed on 92% of Q1 and 94% of Q2 retail rent due
• Retail occupancy of 96.2% (31 March 2020: 94.8%); Pubs occupancy of 98.0% (31 March 2020: 97.0%)
• Completed 504,700 sq ft of new lettings and renewals across the retail portfolio at only a 2.7% discount to March 2020
• Strong bounce back in like-for-like performance in our pub portfolio since reopening on 4 July 2020
Community & Suburban Pubs have proven to be very resilient and sustainable, bouncing back quickly after the first national lockdown. The business returned to profitability within four weeks of pubs reopening.
Relationship and trust with pub partners: Hawthorn provided £3.8m of Rent Support in the half year, and 97% of Partners & Operators say Hawthorn has met / exceeded expectations.
Continuing to invest and support partners: Hawthorn is investing £7.5m in CAPEX this year, and pulling its 2021 programme forwards, where possible.
Hawthorn’s Partners and Operators continue to adapt to meet the needs of their communities: 86% of Partners invested in their pubs during the 1st National Lockdown.
Thanks to the dedication and preparedness of its team, Hawthorn’s pubs were able to reopen safely from the beginning of July, outperforming the wider market. Hawthorn is confident that with the experience gained, the company be well-placed to return to profitability and normalised levels of trading when restrictions eventually end.
CEO Mark Davies (pictured) said, “Despite the obstacles facing the hospitality sector, Hawthorn remains a strong and stable business: occupancy is high, our community and suburban pubs were well-placed to bounce back after reopening in July, and we remained profitable in the first half of our financial year.
“With further challenges imminent and in the shape of local lockdowns, our priority is to support and protect all of our people, protect the business and plan for the future. We will continue to support our Pub Partners and Operators, and we will use the next three months to invest in the business so it’s stronger than ever when restrictions begin to lift in spring next year.
“Throughout the pandemic, our teams have been incredible, providing our Pub Partners and Operators with support, reassurance and somebody to talk to. We’re enormously proud of our company culture, the community of people we work with and the pubs we operate. Our ambition is to be the number one community pub company, and next month we will rebrand to Hawthorn: The Community Pub Company, putting our purpose right at the heart of our business for everybody to see.”