Hawthorn, the community pub division of NewRiver, has in excess of £250m available for acquisitions and has more than doubled its planned capex spend in its third quarter, investing a total of £9.4m.
In its latest trading update for the quarter up until December 31 the 700 estate pub company said that it invested a total of £9.4 million on 270 pub projects, increasing its average spend per project by an estimated 60% and also added an extra 61 sites to its investment programme.
The company says that it has been engaging closely with pub partners to ensure they can access Government support schemes, particularly local support grants and the Job Retention Scheme. The goodwill generated from our engagement has been reflected in an 87% retention rate for pub partners who were tenants of Hawthorn at 31 March 2020, and and that they are confident that the vast majority of its pubs will emerge from the current restrictions in a strong position.
The completion of £2.7 million of non-core pub disposals since 30 September 2020 further demonstrates liquidity and confidence in the long-term prospects of community pubs as an asset class.
The company has also continued to improve the quality of the portfolio with selected capex projects resumed and 86% of the portfolio invested in during the last lockdown..
Hawthorn CEO, Mark Davies, said:
“The Great British Pub Sector – which serves so many communities around the UK – is under real pressure, and we at Hawthorn will continue to do all we can, working closely with industry colleagues and the BBPA, to get the Government to listen to our concerns and provide our Pub partners with the support they so desperately need to survive this latest Lockdown.
“Hawthorn’s overwhelming priority is to protect our people and to protect our pubs. We’re continuing to support our Pub Partners to help them stay afloat and to ensure that they can thrive again and bounce back when their pubs reopen. We more than doubled our planned CAPEX spending for the quarter, investing a total of £9.4m on 270 projects, increasing our average spend per-project by almost 60%, and adding an extra 61 additional sites to our investment programme with a clear focus on outdoor scheme investments and creating more capacity. We also expect to acquire more pubs in 2021. Hawthorn is a dynamic, ambitious company with a proven track record of acquiring Pub portfolios, and we have circa £250m of cash and available liquidity to the business, with additional funds available when required. We remain bullish about the role that community pubs will play in people’s lives once lockdown is lifted. We urge the Government to provide us with a clear roadmap for reopening, and ensure significantly more financial support is urgently prioritised, particularly on business rates and Vat to ensure these vital community establishments can survive.”