Camerons Brewery, the North East brewer and pub operator, is eyeing expansion for its Head of Steam pub chain, as it targets key cities in the North, South West, and potentially London after a buoyant trading year.
The Newcastle-founded brand, acquired by Camerons in 2013, has grown its presence across the º£½ÇÊÓƵ to boast 15 sites.
Company director Chris Soley confirmed the growth ambition, saying: "We are looking to develop Head of Steam as a national brand but currently focussing on identifying new sites in York, Manchester, Bristol and potentially London. Trading for Q1 has been robust and in line with our forecasts."
The expansion plan comes as the firm reported steady turnover in the year ended January 2025 at £60.2m, a minor decrease from the prior year's £61.5m. However, operating profit dropped from £1.8m to £1.2m.
A slight dip in sales was attributed to the previous year’s inclusion of half-year returns from a group of 26 pubs disposed of in June 2023 to FB Taverns. Employee numbers also reduced, from 647 down to 610.
A substantial credit balance of £10.6m, listed under exceptional items, is linked to a refinancing of its borrowings last October. The company stated this was "necessary to secure the medium to longer term viability of the business and it has resulted in a much needed improvement to net assets".
In the accounts, Mr Soley said: "The group has performed strongly and continues to increase its Ebitda to pre pandemic levels even with a reduced asset base. The sale of the 26 freehold tenanted pubs in June 2023 enabled the group to significantly reduce its borrowings and interest burden and gearing consequently has been materially reduced.
"The group has performed very well in the year with a significant improvement in Ebitda from £3.9m in the prior year to £4.6m. Both the main divisions of brewing and managed house pubs have traded well."
He noted that brewing volumes had continued to rise compared to the previous year, with slightly better margins due to changes in product mix, with a higher proportion of small pack product being manufactured. He also mentioned that Camerons was continuing to invest in the development of the brewery, having advanced several energy projects as part of plans to achieve its Net Zero Targets, including the installation of solar panels on its warehouse roof.
The group's portfolio comprised 45 pubs, a reduction of two from the previous year's 47. According to Mr Soley, the pubs generally performed well, but he expressed caution regarding the industry's upcoming challenges.
He stated: "We enter 2025 cautiously optimistic despite the headwinds the industry faces due to the labour budget initiatives and in particular the changes to employers' national insurance that take effect in April 2025. We have re-established our strategic expansion actions and are keen to grow our national flagship Head of Steam pub brand alongside our Urban Country Pubs estate."
