Brakspear Feels Impact of Covid in Financial Results

J T Davies & Sons, the parent company for Henley-based pub operator Brakspear, has felt the impact of the Covid restrictions and pandemic with turnover reported as £19.4m for the year ending 27 December 2020, a decrease of 45% compared to 2019.

All 125 pubs, restaurants and inns were forced to close three times during the year totaling four months in 2020 and operating under trading restrictions while open. The third closure lasted from the 26 December 2020 until 12 April 2021 so will impact the 2021 results.

Because of these forced closures the company reported a loss (before tax) of £221k for 2020, the first reported loss since JT Davies bought Brakspear in 2007. In comparison the profit before tax in 2019 was £6.38m so a decline of 103%.

Turnover did bounce back when pubs could open due to an excellent summer trading period last year plus Government support including the Coronavirus Job Retention Scheme, business rates discount, the retail and hospitality grants and the Eat Out To Help Out initiative.

In March 2020, the Egypt Mill in Nailsworth was acquired, boasting 28 ensuite bedrooms as well as a large private waterside garden, a large events space and two working waterwheels inside. The Crown at Nuffield, Rose & Crown in Henley, the Lamb in Crawley near Witney and the Black Boys in Hurley were all sold during the year, with sale proceeds available for future acquisitions for both their tenanted and fledging managed business.

The impact of the pandemic is still being felt by the company like others in the industry and Tom Davies, CEO, has concerns “Whilst 2020 was a very unexpected year and we’re glad it’s behind us, the impact of the pandemic is still being felt. All our pubs closed for the first three and a half months of this year and operated under restrictions for a further three months. Sales bounced back when we were allowed to reopen in April and we were optimistic about the year ahead.

During our peak trading summer months with all restrictions lifted, we were challenged with significant staff shortages and price rises, as well as supply chain and logistical issues, which are perhaps a consequence of Britain leaving the EU. We anticipate facing these challenges for many months to come.”

Davies added “Our Government now seem determined to risk the hospitality industry’s recovery with an anti-immigration policy towards hospitality staff and others. My understanding of Brexit was that controlled immigration that supports our economic growth would remain. Current policy risks halting the UK’s recovery when VAT and business rates are returning to pre-pandemic levels. Taxes are rising with National Insurance and corporation tax leading the way whilst energy prices are at an all-time high.

The Government expect us to increase productivity which is extremely difficult in our service-based people-led industry. Wage inflation will inevitably lead to price increases which will hit customers’ pockets.”