North East brewer and pub business Camerons Brewery says it is ready to reestablish expansion of its flagship Head of Steam brand after a successful trading year.
The business, known for its Strongarm, Motorhead and Tooth and Claw brands of beer, has published accounts for 2023, a year in which it sold off 26 tenanted pubs to London firm FB Taverns in an £8.25m deal. Despite seeing a significant drop in the number of pubs it trades from – from 75 to 47 – CEO and director Chris Soley said its estate performed well, especially in city centres where more workers are returning to offices after working from home post-pandemic.
The group, which was founded in 1865, chalked up turnover of £61.5m, only slightly down on the £62m posted in the year before, while Ebitda was £4.3m, up £1.5m on the prior year. Operating profit increased substantially, from £382,050 to £1.84m, and pre-tax losses narrowed from £5.5m to £547,660. Employee numbers dropped from 715 to 647.
Last month, following the year end, Camerons successfully refinanced its debts, writing off £11.2m of debt while also extending facilities of £15m to December 2026, which it said “forms a secure firm and certain platform, and growth can now therefore be accelerated”.
Writing in the accounts, Mr Soley said: “The group has performed very well in the year with a significant improvement in Ebitda from £2.8m in the prior year to £4.3m. This was even more impressive given that the current year only included six months trading of the 26 freehold tenanted pub estate (Project Lion) that was sold on 30 June 2023.
“Brewing volumes have continued to increase, as has margin, due not only to the uplift in volumes, but also because of the group being able to fully pass on cost increases it experienced in the latter part of the prior year. Pubs have performed well against a difficult economic back drop; our now largely managed estate has traded robustly, and it is pleasing to see our bigger city centre venues enjoying the extra footfall arising from more employees returning to their respective offices to work rather than from home.”
The Hartlepool based company now has 45 pubs, having sold its tenanted portfolio and also exited two Bar Soba leases. One freehold pub has been sold since the year end and two more units are expected to be sold before the end of this year.
Mr Soley welcomed the finance deal in the accounts, which he said would now ramp up growth plans, especially of its Newcastle-found Head of Steam brand, which it acquired in 2013. The pub brand has grown from a portfolio of seven 11 years ago to locations across the North East and beyond.
He added: “This is a transformational transaction for the business and has resulted in £11m of debt reduction, and as a result, net debt to Ebitda has materially reduced from 5.9 times to a projected 2.7 times by December 24. This significant reduction of write down of our debt, which results in much lower debt service costs, means the group is excitedly looking forward to returning to growing both its brewery and pub operations
“We are now able to reestablish the strategic expansion of our national flagship Head of Steam pub brand alongside our Urban Country Pubs estate, which was borne out of the acquisition of the Leeds Brewery pubs. We continue to invest in the development of the brewery including increasing our small pack capabilities and have a number of energy projects in process to support our route to net zero including the construction of a substantial solar panel array on our warehouse roof.”
