Hawthorn Leisure acquires 29-pub package from Marston’s
![Growing portfolio: Hawthorn Leisure’s acquisition of 29 pubs from Marston’s has grown its estate past the 700-pub mark](https://www.morningadvertiser.co.uk/var/wrbm_gb_hospitality/storage/images/_aliases/wrbm_large/publications/hospitality/morningadvertiser.co.uk/article/2020/01/27/hawthorn-leisure-acquires-29-pub-package-from-marston-s/3254649-1-eng-GB/Hawthorn-Leisure-acquires-29-pub-package-from-Marston-s.jpg)
The acquisition of 29 Marston’s pubs will see Hawthorn Leisure's estate pass the 700-pub mark after a £17.9m deal for Bravo Inns – the operator of 44 wet-led community pubs predominantly located in north-west England – in December grew its stable to 698 sites. According to its CEO Mark Davies, Hawthorn will integrate Bravo Inns’ portfolio by 1 April.
Hawthorn’s purchase also follows the sale of 137 Marston’s pubs to Chester-based operator Admiral Taverns in November for £44.9m – growing the latter’s estate past the 1,000-pub mark.
Both Hawthorn Leisure and Marston’s declined to comment on the latest deal.
Debt reduction progress
As reported by The Morning Advertiser (MA) in October 2019, Marston’s stated that reducing its net debt by £200m before 2023 was the company’s ‘principal focus’.
What’s more, according to its financial results statement for the 16 weeks to 18 January 2020, the Wolverhampton-based brewer, operator of 1,400 pubs and employer of 14,000 staff has completed or exchanged on £60m of disposals in the financial year to date.
Having originally forecast £40m in disposal proceeds, Marston’s increased its target to £70m in November 2019 with the ideal figure now believed to stand between £85m and £90m.
Discussing Marston’s latest results on 24 January, CEO Ralph Findlay said: “We are making excellent progress on our debt reduction strategy – well ahead of the original 2023 target. Looking forward, greater clarity on the political agenda should positively impact consumer confidence.
“Overall, the economic environment for the consumer looks encouraging with low unemployment and healthy wage growth providing us with increasing confidence the market will grow in 2020.”
According to its latest results, Marston’s recorded a 1% increase in managed and franchise like-for-like sales during the 16 weeks to 18 January 2020.
What’s more, the brewer and operator saw strong festive trading, with a 4.5% sales increase compensating for more subdued trading in the first three weeks of December due to poor weather.
Monitoring the pubs code
Hawthorn, which currently represents around 22% of FTSE 250 real estate investment trust NewRiver REIT, is currently the seventh largest tenanted pub operation in the UK according to its CEO Mark Davies.
Speaking to MA following the announcement of its financial results for the nine months to 31 December 2019 – in which Hawthorn revealed like-for-like EBITDA (earnings before interest, taxation, depreciation and amortisation) growth per pub of 4.9% off the back of “solid” Christmas trading, Davies revealed that the pubco was consistently monitoring its position in relation to pubs code regulations.
“The statutory code is something we monitor regularly and officially monitor on a quarterly basis,” he said. “It excludes our pubs in Scotland – where we're a big investor, we have over 100 pubs in Scotland – and it only relates to leased and tenanted pubs and excludes our free-of-tie and operator managed pubs.
“We're not far off 500. We are currently monitoring that and, while we're already applying the voluntary code, if at any point we were to be captured by the statutory code in the next 12 months, we’re ready for it."