Brewer toasts foresight on rising energy costs with record sales
Salford-based brewer and pub retailer Hydes has bounced back from the ruinous pandemic with record sales and an increase in profits for its 2023 financial year.
The family-owned independent business, which is celebrating its 160th anniversary this year, delivered turnover of £34.1m for the year ending April 2, 2023, despite challenging economic conditions. This latest record turnover is up £5.8m on 2022’s figure of £28.3m.
The £2.1m pre-tax profit for the period compares with £1.9m in the same period last year.
Hydes, with its brewery in MediaCity, was formed in 1863 and supplies beers to wholesalers, pub companies and other brewers throughout the UK and a pub retailing estate of nearly 50 pubs across the North West of England and North Wales.
Soaring inflation, high energy costs, a tight labour market and rising interest rates all contributed to extremely difficult trading conditions for the hospitality industry as a whole. Decisions made in previous years to fix energy costs until 2024 and enter long term contracts with major suppliers ensured the family-run business was shielded from some of the worst financial impacts of inflation.
Accounts filed at Companies House also show that the brewery was impacted by significant cost increases in food and consumable goods. Staff recruitment, particularly in kitchens, also presented a challenge, resulting in higher payroll costs across Hydes’ managed pub estate.
The latest results saw an operating profit of £2.2m, the same as 2022. While operating profit for 2023 increased marginally, the previous year had significant government support in the form of grants and rates relief (£1.2m) plus VAT reductions on food and soft drinks, linked to measures to lessen the impact of the pandemic on the hospitality industry.
According to non-executive chairman, Richard Lancaster, the foresight to fix energy costs and negotiate long term supplier contracts allowed the business to limit sales price increases throughout the year.
Throughout the year Hydes continued to invest in its estate. The Jolly Thresher in Lymm and The John Millington in Cheadle Hulme both underwent extensive refurbishments.
The Jolly Thresher performed strongly throughout the year, exceeding all expectations, while the sales performance following the John Millington refurbishment project has been exceptional.
Further investments were made at various other sites including the Sam Brooks in Sale, The Golden Lion in Rossett and Alfred’s in Macclesfield. All managed public houses in the estate are now fully Hydes branded.
In October 2022, Hydes completed its first freehold acquisition since September 2015, purchasing the former police station in Heswall.
Named after the architect of the original building, The Harry Beswick, has seen more than £3.6m in investment and is currently undergoing an extensive renovation ahead of its opening as a premium pub and dining venue in November this year.
Two disposals from the tenanted estate took place during the year with the Carlton Tavern in Chester sold to existing tenants for £175,000 and The Eagle Hotel in Buxton sold for £170,000.
Richard Lancaster said: “In a year marked by unprecedented challenges in the hospitality industry, Hydes has demonstrated remarkable resilience, innovation, and customer loyalty, resulting in a record-breaking turnover in its 160th year of operation.
“This significant achievement not only highlights the brewery’s commitment to delivering exceptional products and services but also underscores its integral role in the communities it serves. Investment in our pubs and our people is top priority and this will continue apace throughout the next financial year.
“Significant turbulence remains with inflation still high, interest rates expected to rise further and staff recruitment still proving to be a major headache. However, our achievements over the past 12 months have paved the way for future growth. We enter the new financial year with strong trading momentum and confidence that we will continue to deliver on our strategy.”
He added: “Hydes has a strong portfolio of sites which are all in excellent condition and trading well, a brewery producing increasing volumes across a range of quality beers and a dedicated and capable workforce throughout its pubs and at head office.”
Hydes operates nearly 50 pubs ranging from Lancaster in the North to Stoke-on Trent in the Midlands and across to North Wales including a wide selection of premium dining destination outlets, craft style bars and traditional community pubs.