Update on Liberation Group trading performance

Today we provided an update on trading over the last three months and outlined some ambitious investment plans for the year ahead. The full details are below.

Jonathan Lawson the CEO of Liberation Group commented ‘’It is extremely pleasing to see all of our channels and geographies recovering strongly since reopening and achieving growth on 2019.  These 13 weeks see our largest sales volumes over the whole year so it is great to be delighting so many customers over such a critical period for us, with the quality of our food offer, our accommodation and our OBV keg products making huge contributions to our growth.  But in the longer term there are still many challenges for the sector and for us specifically, with recruitment and supply chain issues causing additional costs and lost opportunity.  There are also headwinds to come in the future UK tax regime – we continue to lobby the government to convert the temporary VAT reliefs into a permanent reduction and to abolish the inequitable system of business rates.”


Audited financial statements for the year ended 30th January 2021 show both Pubs and Drinks Divisions achieved positive EBITDA with an improved liquidity position and a stronger balance sheet.

The Group operates 55 Managed and 64 Tenanted pubs and inns and On and Off Trade distribution businesses across three geographies, under the Liberation brand in Jersey and Guernsey and under the Butcombe brand in England.

The Group has traded extremely strongly across all channels to market and all geographies over the 13 weeks ended 28th August.  All trading information compares this period with the equivalent 13 weeks in 2019 unless stated otherwise.

Like for like Managed pubs across the group overall have achieved sales growth of 2% with exceptional growth in the UK pubs of +26% offset by declines in the Channel Islands.  Growth in the UK Butcombe pubs was generated from sales of Food (+52%) and Rooms (+83%) as the UK pubs benefitted from being well positioned for the post-reopening consumer trends towards premiumisation, local food and drink and staycations.

The Tenanted pubs demonstrated the value of diversified channels to market, generating 8% growth in volumes to like-for-like tenancies with Jersey and Guernsey outperforming the UK.  Our tenants were supported with rent discounts during the COVID lockdowns and reopening’s to ensure they were in a robust position to recover from the pandemic.   All tenants’ rents were moved back to 100% of contracted levels in all three geographies by June.

The group’s M&A strategy is targeted primarily on UK food-led managed pubs with accommodation focused on the south west, including Butcombe’s Bristol heartland, the Cotswolds and the south coast.  The 21 pubs acquired from Wadworth and Co in December 2020 have performed ahead of expectations since reopening. We have an investment strategy for each pub and have so far developed six of the acquired pubs. Pleasingly, the strong performance has been in both the developed sites and uninvested sites, reflecting the combined benefit of consumer demand and the strength of our food and drink offer. The acquired pubs added 143 rooms which have contributed to accommodation revenue growing to 14% of UK Managed pubs total revenue.

The Drinks Division has seen a strong bounce back of On Trade sales in all three geographies, and continued growth of the Off Trade and other channels.  Sales of the Liberation Quality Drinks business in the Channel Islands have been 14% higher led by the Off Trade and the B2C website and retail shop in Jersey which has achieved exceptional growth of 53%. Future growth in the drinks division will be accelerated by Liberation Quality Drinks securing a contract with Diageo to distribute its products across the Channel Islands.  The UK Butcombe drinks business has far exceeded expectations since reopening, simultaneously achieving a record number of recurring Free Trade customers per month at a record average spend per customer.  Including the volumes achieved in the fast-growing 3rd party contract brewing and packaging business, overall volumes in Butcombe were up 11% led by OBV keg volumes up 84% and OBV Bottled volumes up 41%.

The Group is implementing ambitious capital investment plans, taking confidence from the recent strong trading and the group’s positioning to benefit from the continuing recovery in consumer sentiment.  Over 30 development projects are planned for the next 12 months, encompassing the existing and newly acquired Managed pubs, Tenanted businesses and distribution facilities and breweries.  The most significant investments will see development into food-led pubs and inns including into the estate of 250 rooms.

Today the Group has also released its audited financial statements covering the year ended 30th January 2021. These accounts highlight the benefit of the geographical and channel diversification of the group, with the Pubs & Inns and Brewing & Distribution divisions achieving positive EBITDA of £0.7m and £1.7m respectively despite the impact of the COVID-19 pandemic reducing turnover by 23% to £68.3m.  Strong working capital improvement and proceeds from the disposal of underperforming assets offset the underlying EBITDA loss of £0.8m and exceptional costs of £1.7m to achieve positive cash flow generation before capex investment and acquisitions. Furthermore, the funding of the acquisition of pubs from Wadworth and Co by our supportive shareholder, Caledonia Investments, increased the strength of our balance sheet. Net external debt of £38.5m at January 2021 is consistent with January 2020, but the value of freehold assets increased £27.3m to £128.1m.   Group CFO Simon Hope commented “The focus of everyone in the Group on the importance of cash yielded obvious results in the year to January 2021 and this has continued during the first half of the current financial year.  We enter the second half with stronger liquidity than at the end of January and we are well placed to fund our ambitious development plans and M&A strategy when the opportunities arise.”