Leading community pub company Hawthorn has today unveiled plans to list on the stock market as a standalone quoted business, heralding the return of a tenanted and leased pub group to the London stock market.
The parent group NewRiver REIT has announced that it will explore the potential for an IPO of Hawthorn following a strategic review, a process that would see the pub group launched out as a separately-listed company.
Such a move would enable Hawthorn to continue to build on its mission of becoming the number one community pub company in the UK, and pave the way for investors to be able to buy and trade shares in the 700-strong pub group in the coming months.
The work to explore an IPO comes after an industry-wide independent study of pub licensees found that Hawthorn was both the highest-rated pub company, and the best for providing support during the Covid-19 pandemic of any national group. It follows a year of unprecedented and industry-leading support from Hawthorn for its Pub Partners.
Mark Davies, who has been Chief Executive Officer of Hawthorn since 2019 and has been instrumental in driving NewRiver’s pub operations since 2013, will lead the IPO (Initial Public Offering) opportunity. Mark also sits on the board of the BBPA, and has been Chief Financial Officer at NewRiver for 12 years, and in leading this new chapter for Hawthorn, will step down from the NewRiver board in due course.
Commenting on the opportunity, he said: “This is a tremendously exciting and important moment for Hawthorn and represents the next phase in the development of the company.
NewRiver is, and has been, a strong custodian of this business, helping to build one of the UK’s leading community pub companies, and enabling us in the past 12 months to provide industry-leading support to our Pub Partners and Operators.
“This is the right time to be exploring the IPO opportunity. After building this business over the course of eight years, the NewRiver board has concluded that Hawthorn can grow faster as an independent company and continue to drive towards our shared ambition of making Hawthorn the number-one community pub company in the UK.”
In addition to its tenanted and leased pubs, which account for the majority of the Hawthorn business, the group also has a well-established, successful and scalable Operator-Managed division, which accounts for around 20% of the estate.
The news comes as many of Hawthorn’s Pub Partners and Operators reopen after several months of temporary closure. The group estimates that around 60% of its pubs have reopened this week after the easing of restrictions on outside trading, with the balance expected to reopen when indoor trading is permitted.
During the period of temporary closure, the focus has been on continuing to protect and support Hawthorn’s pubs. Since March 2020, the business has provided £8m of financial support to Pub Partners and Operators. This represents industry-leading support, which was recently recognised in the results of KAM Media’s ‘Licensee Index’, the leading operator sentiment tracker for the UK licensed and tenanted pub sector.
Hawthorn’s overall rating in this index – 8.5 out of 10 – was the highest of all national pub companies, and in the area of Covid-related support specifically, Hawthorn scored 9.2 out of 10, again the highest amongst the national pub companies. These results demonstrate the significant goodwill and overall strong relationship the group has with its Pub Partners.
With a focus on well-located community and suburban pubs, the Hawthorn estate is well placed to benefit from consumers working from home and using their local services and facilities. Hawthorn expects its pubs to lead a strong bounce back, as seen in the summer of 2020 when on re-opening Hawthorn pubs outperformed the UK pub sector.
Davies, a founder-director of both NewRiver and Hawthorn, added: “As many of our Pub Partners and Operators get back to doing what they do best this week – running brilliant community pubs – we are delighted to be sharing this news.
“We look forward to continuing to build the Hawthorn business, to returning to growth and to exploring opportunities to support more pubs and more Pub Partners. In many ways nothing will change and it is business as usual, and our focus will continue to be on building the very best community pub company, with industry-leading support and a people-first approach.”