Against a background of new developments — including new collaborations with Iron Maiden and Help for Heroes — Frederic Robinson Ltd says it is ploughing profits back into the business.
The Stockport-based family business, which recently celebrated its 180th anniversary, says a variety of internal and external factors has affected profitability.
Increased investment in 2017 had an impact upon the bottom line, however underlying performance remains strong, with like-for-like in managed pubs up 15.6 % and tenanted up 3.1%.
In line with its strategy, Robinsons has continued to invest heavily in the refurbishment of both its tenanted and managed estates, spending around £9.7m in 2017.
Also that year, it completed the disposal of 27 pubs and carried out significant investments at 31 pubs, resulting in a transformed estate.
Robinsons, one of the oldest independent brewers and pub operators in the North West, owning over 260 pubs, has increased its turnover during the year ending December 31, 2017, by 4.2%, to £71.2m. Profit before tax fell by 19% to £3.1m.
The year saw strong sales, with further managed house openings and full year trading of recently invested sites, coupled with higher overall operating costs and record levels of investment in tenanted and managed pub estates. As a result, operating profits reduced to £1.2m (£2.6m in 2016).
Managing director (pub division), William Robinson, said:“Although there is still a lot of work, and a long way to go, we have a clear vision and a solid strategy for both our tenanted and managed pubs.
“In addition to our long-term strategy to invest in our pubs, to ensure we maintain the high standards we are setting, we will also continue to develop our exceptional licensee support package, be that through projects such as the Greener Retailing research project we carried out in association with The Centre for Enterprise at MMU, the group purchasing arrangements we have created over the past ten years, the apprenticeship and training programmes we have developed to support our licensees, digital innovation to drive loyalty and footfall, or more recently the review of the role of our business development managers.
“These are all intended to support sustainable growth for the future prosperity of the company.”
Robinsons remains encouraged by the progress it has made with its brands and the continued success of its partnership with Iron Maiden and the Trooper brand. The extension of this led to the creation of Light Brigade; a golden English ale developed in support of Help for Heroes.
Six pence of each pint and five pence from each bottle sold will be donated to help the thousands of servicemen and women who live with complex wounds and injuries — both physical and mental — to regain their purpose in life.
Managing director (beer division), Oliver Robinson, said: “Despite strong sales across all our business, margins continue to be challenging in all areas of the business as we continue to see above-inflationary cost increases. We continue to work closely with our suppliers and customers to make sure where possible we minimise any increase to our very loyal customer base.
‘Challenging and competitive market’
“We operate in a challenging and competitive market, where customers want both value and quality, but we have adapted well to changes in brewing demand and styles as we re-invigorate our beer strategy and offer greater variety and choice for our customers.
“Our range of excellent quality beers won no less than 20 esteemed awards in 2017, and our brew house had its busiest year since we opened it in 2012. Trends in the beer market are dictating that a greater number of beers and styles are required to satisfy our customers, and consequently an increase in 60-barrel brew lengths have been requested rather than the traditional 120-barrel brew lengths.
“Over the past three years, we’ve also been working hard to implement an ambitious growth plan for free trade, off trade, wholesale and export, which appears to be paying off. Total volume in external sales again hit a new high, with the increase in volume coming from the Off Trade and Free Trade.
“Own brands continue to grow and were supported by the joint venture we have with the Co-op. Trading proved more challenging in national sales due to a nationwide decline in the cask beer market and some historic customers focusing on their own brands rather than supporting a portfolio of guest ales. Export also proved challenging in what has become a crowded market.”
Oliver added: “We are evolving with the market and our craft beers, such as Beardo and Mojo, are proving a great conduit to expand our portfolio within the off-trade and help us drive our core packaged brands.
“Our seasonal beers offer us range and variety, and our ‘white label’ beers offer a point of difference to our tenanted, managed and free trade cask customers. Our own range of craft keg is evolving, but our focus remains on our core cask brands.”
