Inflation dents Oakman profits, despite sales lift

The Oakman Group took a £2m hit on its site EBITDA during its last financial year, as inflation diluted the success of its sales increases.

In a recent shareholder letter, CEO Peter Borg-Neal (pictured) said that group sales for the last financial year (to June 2023) were 8% ahead of the prior year at just under £70m. In addition, like-for-like sales for the core Oakman Inns business were up 4.1%.

However, consistent with the wider sector, Oakman’s profits were impacted by inflation, with site EBITDA down from £12m to £9.8m.

Through improvement initiatives to remove complexity and drive business efficiency, Oakman's aim is to increase site EBITDA in the current year by £2.5m and reduce central overhead costs by £1.3m.

"Q1 FY 2023-24 was the most profitable quarter since December 2021," says Borg-Neal. "Furthermore, we are already tracking 10% ahead of the prior year for Christmas bookings. We have also consolidated our corporate structure, which had become unnecessarily complicated since its inception over 16 years ago and this has reduced administration and management overheads."

A growing estate

Oakman employs over 1,700 people across its 42-site portfolio. In the summer, it opened The Journeyman in Gerrards Cross and The George in Ludlow, which the group says are trading ahead of expectations, with weekly sales (net of VAT) in excess of £60,000 and £40,000 respectively.

The company’s pipeline includes two additional sites with planning permission – Bush Hall in Old Hatfield and The Beech House in Epsom, the latter of which won Pub Brand of the Year at the 2023 National Pub & Bar Awards. In addition, lease terms have recently been agreed for Batchwood Hall in St Albans.

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