Growing North East pub and hotel company the Inn Collection Group has secured a further £23.2m in funding from its owners as it looks to add more properties to its portfolio.
The Northumberland firm had just seven sites when it was acquired by Alchemy Partners back in June 2018 and, on the back of significant funding, it has since boosted its list of leisure venues to 19 in its three key areas of the North East, Yorkshire and the Lake District.
Accounts for the year ended December 2019 now show it has received an additional, multimillion-pound cash injection to fuel further growth, despite taking a hit while the hospitality remains closed as a result of coronavirus restrictions.
The group posted an operating loss of £1.3m on turnover of £13.6m in the period, with the overall loss coming in at £5.036m following a year of investment.
The previous accounts had just covered the six month period after its acquisition the previous June, seeing turnover of £6.2m between June and December 2018, and an operating loss of £153,859.
The accounts also explain how directors have prepared cash flow forecasts covering the next year to March 2022, which also includes a “severe but plausible” downside forecast predicting an end to lockdown this spring, but further enforced lockdowns in November 2021 and January 2022.
During the accounts year the company, based in Alnwick, Northumberland, added a number to its collection, including The Pheasant Inn at Bassenthwaite Lake and The Queens Hotel in Ambleside. Since the year end further properties have been added including The Black Swan Inn at Helmsley, The Swan Inn at Grasmere and others in North Yorkshire, Lancashire and Cumbria.
Despite the challenges of the pandemic the group said it saw growth in sales and earnings from its core established sites, and further growth in overall profit contribution from the opening and development of new, refurbished sites, and that it continues to have strong support from its owners.
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The accounts report shows that, since the 2019 year end, its owners have already provided an additional £21.2m of funds to support its acquisition strategy and in January it committed an additional £2m in working capital.
In their report, directors said: “The management and investors have increasing confidence in the potential of the existing portfolio and potential priority acquisitions. The Covid-19 impact across the business affecting national and global economies has inevitably had a significant impact on progress of business growth and activity.
“Potential newbuild sites and acquisitions are constantly being assessed it is an anticipated that at least one further new build site or acquisition will be completed shortly after normal trading resumes for the group and the sector. The group intends to add a further three to five new sites per year.”
The accounts come as bookings open for the latest addition to the group, the 40 bedroom The Seaburn Inn on Sunderland seafront.
Paul Edwards, CFO at The Inn Collection Group, said: “An encouragingly strong pipeline of further acquisition opportunities has been developed gradually, all at different stages of progress through to near completion.
“The directors have reviewed the strategy of the group in light of the Covid 19 pandemic and are still convinced the current business plan remains on course for maximising investor value. Working alongside our stakeholders at Alchemy Partners and identifying businesses that are a natural fit for the Inn Collection ethos, 'Eat, Sleep, Drink, Explore' the future development of the business model will, we hope, see sustainable growth.
“We continue to value the full support of our bank in ensuring adequate funding of operations in the short to medium term as we look forward to re-opening. We always see our colleagues as our key asset and are working with them to ensure a safe and effective return to welcoming customers.”