NewRiver REIT’s third quarter company update has confirmed Hawthorn Leisure’s integration is on track to complete by the end of the month.
Pub occupancy for the real estate investment trust company remains high at 98.9% (Sep 2018: 98.6%); 671 pubs now account for 22% of total portfolio.
Funds from operations are set to benefit from £2m of the £3m synergies identified at the time of Hawthorn’s acquisition.
This includes £1.7m announced in H1 secured through supply contract renegotiations and further £0.3m unlocked in Q3 – the remaining £1m will follow in 2020’s financial year.
Hawthorn Leisure’s portfolio is trading well; like-for-like EBITDA per pub was up 0.8% in Q3, and up 4.3% in the two weeks to 31 December 2018; and beer volumes were up 10.2% in two weeks to 31 December 2018.
The company opened its first community pub in a NewRiver shopping centre – the Keg & Kitchen at The Ridings shopping centre, Wakefield – operated by Hawthorn Leisure; early trading performance has been encouraging and other opportunities across the wider portfolio are under review
“The integration of Hawthorn Leisure is on track to complete later this month, and we have made excellent progress towards realising the £3m of synergies identified at the time of acquisition, as well as leveraging Hawthorn Leisure’s pub operating expertise across our wider retail portfolio,” comments Allan Lockhart, chief executive of NewRiver.
“NewRiver’s portfolio of wet-led community pubs now accounts for over 20% of our total assets, adding further diversification to our income streams.
“We are confident that our focus on the resilient sub-sectors of food and grocery, discounters, value fashion, health and beauty, and community pubs is the right strategy as evidenced by the solid Christmas trading performance recently reported by our key occupiers.”