Butcombe Group announces results for year ending January 2025

Butcombe Group Delivers record results and strong start to new financial year as Growth and Premium Strategy drives Market Outperformance

London, 15th May 2025: Butcombe Group, a leading privately owned premium pub operator and brewing group with sites stretching from Mayfair in London to St Aubin in Jersey, is today reporting results for the year ended 25 January 2025.

 Full Year Financial highlights 

  • Record revenues of £149m versus £144.4m in the previous year
  • Managed pubs strongly outperformed the sector with like-for-like revenue of +7.8%.
  • Enhanced EBITDA margins across the group, with 150 bps improvement in the managed estate
  • 7.4% growth in underlying group EBITDA and 8.1% growth in Divisional EBITDA

 Operational and strategic highlights 

  • Continued investment in our estate with ten pub investments during the year
  • Embracing changing consumer trends:
    • Investment in menu development with all day brunch, small plates, sandwiches and classics
    • Improved all day offer with breakfast the fastest growing mealtime
  • Harnessing the power of our data and loyalty:
    • Customer segmentation and personalisation growing visits and spend
  • Rollout of Butcombe Boutique Inns, our premium room offering, to ten sites during the year, and one since period end, driving encouraging results
  • Brewing and Drinks achieved 8.4% growth in the UK Free Trade, our largest drinks channel

 Q1 Trading Update (ending 26th April 2025) 

  • Managed pub LFL of +11.1%, with growth in all three categories of Food (+10.3%), Drink (+13.3%) and Accommodation (+5.3%)
  • Our loyalty programme gives us significant advantage in the market with loyalty sales continuing to grow and now making up 22% of our total sales
  • Good spring weather has also provided an early benefit for our external spaces, with around 40% of our covers now outside
  • The Punch Bowl in Mayfair has just been named London’s Best Pub 2025 by lifestyle guide Muddy Stilettos, underscoring the exceptional quality and appeal of our premium pub offering

 

Jonathan Lawson, CEO of Butcombe Group, said:

“We are delighted to report another strong year across all divisions of Butcombe Group. We have delivered record revenues and sector-leading like-for-like growth of 7.8% in our managed pubs, a clear indication of our continued operational strength and effective strategic investments. This result is especially pleasing considering the strong comparatives we faced against last year.

We have made substantial progress in harnessing our data and loyalty capabilities, which have significantly enhanced our customer understanding and engagement. With loyalty transactions across our managed pubs now representing 22% of total sales and a greater percentage of our like-for-like growth.

Encouragingly, we’ve carried this momentum into the new financial year, achieving impressive Q1 like-for-like sales growth of 11.1%, underpinned by strong performances in food (+10.3%), drink (+13.3%), and accommodation (+5.3%). Notably, we delivered our highest-ever trading day on Mother’s Day, surpassing our previous record set on Christmas Day, further highlighting the strength of our proposition.

The Brewing and Drinks division was broadly flat versus last year in Q1, once again the UK Free Trade performance lead the way growing by 8% vs LY, with online ordering now adding a further service provision to our customers and driving basket spend. The success of Goram IPA Zero, our award-winning low alcohol IPA has encouraged us to develop Tall Tales Pale Ale Zero, a refreshing Pale Ale that will be perfect for the summertime.

While we remain mindful of the ongoing inflationary pressures and changes to National Insurance contributions that impact the broader hospitality sector, we are confident in our strategy. Our continued focus on premium segments, operational efficiencies, and customer-centric innovation positions us strongly for sustained EBITDA growth and margin enhancement through the rest of the year.”

 

A strong year, with sector leading LFL’s, 7.4% growth in underlying EBITDA and improved margins.

It has been another strong year for Butcombe Group with encouraging revenue and EBITDA growth, sector leading LFLs in our managed estate, further progress in our Brewing and Drinks business and important developments in areas that will provide future growth such as accommodation, mornings, loyalty, data and AI. We also grew year-on-year EBITDA margins across the group, with 150 bps improvement in the managed estate, which is a notable achievement and reflects our balanced approach to driving sales and delivering improved levels of profitability.  Once again, we have seen the strength of our Group’s geographic and channel diversity which enables us to leverage the scale of the business whilst also delivering to our local market needs.

We are fundamentally a people business, and we should start with a massive thank you to our incredible teams across our fantastic business. We now employ 1,855 people, more than double the number of people we employed in 2019 and firmly believe that delivering a strong customer experience starts with the colleague experience and we have continued to invest strongly in this area. The result has been a 22% improvement in retention across the Group and high levels of engagement, achieving a place in the Worlds Happiest Places to work index. This improvement in people retention and development has driven the managed pub Reputation score to over 800 with 3 pubs now in the 900s.

Managed Pubs

It is immensely encouraging to report sector leading LFL performance of +7.8%, even more impressive considering this was up against LFL growth of +6% in the preceding year. Food was undoubtably the standout performance at +12.1%, well supported by growth in drink +4.7% and accommodation +3.8%. On food we have seen the benefit of staying close to emerging customer trends both in terms of menu development and day part offers. Our menus now offer fantastic choice and freedom for our customers, who can choose from all day brunch, small plates, sandwiches and classics such as our delicious homemade pies, great vegan options and outstanding steaks from matured grass reared beef. We’ve also recognised the changing trends of when people choose to eat, with growth in customers eating out for breakfast, offering us another great opportunity to welcome new customers to our amazing pubs. The majority of our pubs and inns are now open for breakfast and trading all day on food. In drink we have seen a positive reaction to the enhancement of our wine lists where our good, better, best approach to our lists offers some outstanding entry price wine, building up to some prestige marques in the most premium of our pub locations.

Our accommodation business continues to mature and to increase its value to our business, accounting for 14.5% of our UK Managed sales and we are clear in our strategy of wanting overnight guests to eat and drink with us too. We have progressively invested into our managed estate over the last six years and continued that in 2024 with six major investments and four smaller ‘sparkle’ schemes. The roll out of Butcombe Boutique Inns has continued and the proposition has currently launched in 11 Inns with wonderful feedback from our customers and really encouraging results. We have further investments targeted this year which will see more Pubs join our Butcombe Boutique Inn offering and believe that ultimately 20 of our inns will belong in this format.

Data, Loyalty and AI

Our loyalty programme gives us significant advantage in the market to use our data to build customer segmentation and loyalty. We have 44% of till transactions in the Channel Islands and around 15% in the UK being tracked. We are using AI and machine learning to perform customer segmentation and significantly enhance personalisation enabling more targeted marketing and communication resulting in increased returns.

The wider UK economic environment, notably following the 2024 budget, has introduced significant increases in labour-related costs, such as higher employer National Insurance contributions and rising National Living Wage rates. These pressures make it essential for businesses, especially in hospitality sectors, to embrace efficiencies through technology, particularly AI and automation, to minimise passing increased costs onto customers.  There are a number of areas where there is an opportunity for us to deploy AI and Machine Learning, these include:

  • Food order predictions in Managed Pubs: Accurately forecasting demand using historical data, seasonal trends, and external factors to optimise stock and reduce waste.
  • Wholesale drinks demand forecasting: improved forecasting accuracy to better manage inventory, reduce shortages and excess stock, and enhance profitability.

Brewing and Drinks and Tenanted Pubs

Our Brewing and Drinks business delivered a highly respectable performance, despite the inclement weather, with a notable achievement in the UK Free Trade, our largest drinks channel, which saw growth of +8.4% vs the previous year.  Our strong range of own brewed beers, highly trained sales teams, dedicated fleets delivering fully consolidated deliveries combine to offer an exceptional service to our Free Trade customers and from this year we have now added the additional facility of online ordering. We are also encouraged by the increased distribution that our brands are now seeing in the major supermarkets and convenience stores with Tesco recently listing Goram IPA Zero in 73 stores. In the Channel Islands we continue to see growth opportunities and work with the support of some of the best drinks brand brands in the market. As a result, we are seeing an increased number of our high value customers signing up for three- and five-year deals which enables us to provide the best value and service possible.  All of this enabled us to achieve both growth in EBITDA vs LY and EBITDA Margin progression.

The Group has continued to focus on the brand development of its three flagship beers, Butcombe Original, Tall Tales Pale Ale and Goram IPA Zero. Both Butcombe Original and Goram IPA Zero have had a creative refresh to help drive more standout on the bar and on the shelves. Events and sponsorship such as the Bristol Balloon Fiesta, Bath Half and Maverick Races has driven activation of the brands with extensive sampling and customer engagement, helping to further raise the profiles of the three brands. Butcombe Original is now the South West’s favourite cask beer; Tall Tales Pale Ale has continued to show significant growth and Goram IPA Zero has continued to feature as our customer favourites with the most 5-star reviews of all our beers.

Tenanted pubs continue be a core part of our strategy as we focus on driving volume in the larger more progressive pubs, working closely with our tenanted partners, which includes targeted capital investment. Tenanted pubs saw a slight reduction in total EBITDA, due to last year’s disposal of nine dilutive sites, but was ahead by +3.8% on an average EBITDA per pub basis.

Environmental, Social and Governance

The ultimate goal of the Group is to grow the business in a sustainable manner which has a positive impact on regional and local communities and their environment. The Group continues to support and build new relationships with local charities, sports clubs and groups local to our pubs, to allow us to become a hub for each individual community, culminating in the Group’s annual Community Week.

Current trading and outlook

We are encouraged by the start to the new financial year, particularly in our managed pubs, delivering LFL of +11.1% in Q1 (ending 26th April 2025), with growth in all three categories of Food (+10.3%), Drink (+13.3%) and Accommodation (+5.3%). Given the uncertain consumer environment, it is an inherent strength to our business that we are focused on more premium customer segments in both the UK and the Channel Islands. We have also seen an increasing impact from areas of growth that we started to focus on last year, including mornings, events and occasions and particularly loyalty which we believe has played a crucial role in strong LFL and our outperformance versus the market. The quarter has seen us deliver our highest ever single day in managed pubs on Mother’s Day, breaking the previous record set on Christmas Day 2024 and the spring sunshine that we experienced in March and April has given  us an early benefit from our external spaces, with around 40% of our covers now outside, with a new app launching in May to assist in service delivery, sales and productivity.

The Brewing and Drinks division was broadly flat versus last year in Q1, once again the UK Free Trade performance lead the way, with online ordering now adding a further service provision to our customers and driving basket spend. The success of Goram IPA Zero, our award-winning low alcohol IPA has encouraged us to develop Tall Tales Pale Ale Zero, a refreshing Pale Ale that will be perfect for the summertime.

The cost base of our business has clearly come under further pressure following last year’s budget and specifically the lowering of the NI threshold is something that we see as unwarranted and an action that discourages growth, investment and employment. We came into the year with a number of initiatives and projects aimed at improving the efficiency of our P&L and these are helping to offset the impact these cost increases and we are confident in our ability to deliver strong EBITDA growth in managed pubs this year and improvements in EBITDA margin.

 

Full report can be viewed by clicking here

 

 

 

– ends –