The director of a leading North East leisure group has warned how industry tax increases are impacting investment within its portfolio.
Vaulkhard Group owns and operates a vast number of bars, restaurants and event spaces across the region, including Newcastle venues Bealim House – home to its head office – Castro’s, Bar Luga and Redhouse, as well as Keel Tavern in Sunderland, The Diamond Inn in Ponteland and popular coffee houses Blake’s in Newcastle and Central Bean in Morpeth.
Now, with less than a month to go before the Autumn Budget, chief executive Ollie Vaulkhard has used the accounts to highlight the huge tax burden placed on his company and the wider industry. It comes as the company posts a jump in turnover and profit in 2024, reflecting additional income from new additions to the group, including Wylam Brewery and its attached events business.
Turnover jumped 19% to £18.9m, while operating profit jumped 79% to £1.61m. A breakdown of turnover shows sales from its Newcastle gin distillery, based in Bealim House, grew to £263,283 from £223,713. Employees numbers, meanwhile, rose from 327 to a monthly average of 382.
Within the accounts, Mr Vaulkhard highlighted the amount of revenue taken in taxes each year.
He said: “The continuing challenges within the sector have been widely documented and despite this challenging trading environment the group recorded a 19% increase in turnover to £18.9m and an increased Ebitda to £1.8m. During the year the group has continued with its strategy of acquiring freehold trading sites and repositioning the group trading portfolio in line with group strategy.
“In January 2024 the group acquired the freehold property of Grey Buildings on Grey Street in Newcastle, acquired Ninkasi Pubco Limited, an events space and pub business within the city centre of Newcastle, and bought the assets of Wylam Brewery to add the brewing of beer to the group’s portfolio. The figures reflect almost a full year of trade for the business.
“The group also disposed of two leasehold trading sites and a non-trading freehold property during 2024 in line with the strategic plans of the business.
“Post year end the group has also acquired the freehold of Barluga, a site that the group has traded for over 20 years, on Grey Street in Newcastle.
“The directors are acutely aware of the constant challenges imposed on the industry with additional wage and NI costs being the latest cost increase to the sector. The group employs over 375 people in the North East of England and any Government-imposed increase in employment costs materially affects the business and ultimately impacts the amount of reinvestment that can be made into the estate.
“As has been documented in the press over recent months, the hospitality sector continues to be a large contributor to Ƶ taxation. During the year the group made payments of over £3.5m to HMRC through VAT, PAYE, Corporation Tax and Duty payments. In addition to this a further £0.5m was paid in business rates.
“The board constantly reviews the impact of these additional cost pressures and reacts where possible to ensure that the business remains competitive.”
He added: “Because of this continuous review the board believes that, as we approach the final quarter of FY25, the group is well placed to overcome these challenging market conditions and overall increase in costs.
“The repositioning of the portfolio in recent years and investment into the group’s trading properties gives the board confidence as we look toward 2026 and beyond.”
