Willie Lees results show pressures facing pubs
Family owned brewer JW Lees has filed accounts with its highest ever turnover of £88m, but in a sign of the inflationary pressures on the business, profits were down by 56% to £3.5m.
Managing director William Lees-Jones said the recent years have been a rollercoaster for the business, headquartered at Middleton Junction, and put the dent to profits down to “rising costs of energy, significantly reduced government support and increased levels of investment in the business.”
He said: ‘It feels like we’ve been on a rollercoaster since 20 March 2020 when Prime Minister Boris Johnson ordered all UK pubs to close – sadly some pubs have never recovered but we are now seeing steady growth in all three parts of the JW Lees business.”
But he was also critical of present government policy towards hospitality and called for a number of “simple things” that would ease the burden on the business, notably rates reform and alcohol duty.
“The government says that it recognises how important the hospitality sector is but needs to start to think differently about how it invests in the sector. There are so many simple things that government could do, including the long-promised root and branch review of business rates and fairer rates of both alcohol duty and VAT, which are among the highest in the world. The current year’s challenges include continued high energy costs and inflation; we are also starting to see the impact of the Alcohol Duty Review which came into effect in August,” he said.
He also bemoaned the lack of opportunities to acquire sites. “We are about to embark on a major investment programme in our brewery, as we approach our 200-year anniversary in 2028 as well as adding a number of new bedroom blocks to our existing pub estate.
William Lees Jones
“Our brewery in Middleton Junction is at the heart of the JW Lees business, with Managed Houses, Pub Partners and Free Trade all working together to build the JW Lees brand in the North West.”
The 1,525 employee company now plans further investment following the pandemic, lockdowns and a self-imposed freeze on capital expenditure, with the JW Lees estate now back on a five-year rolling refurbishment programme.
The company has also invested heavily in its 134-strong estate during the year to the end of March 2023 spending £8.9m on refurbishing its properties across 23 schemes including over £500,000 at The Rain Bar Manchester, and also at The Elizabethan Heaton Moor, The Anglesey Arms Menai Bridge, The Lancashire Fold Alkrington, The Boat House Chester, The Spring Inn Rochdale, The Stanneylands Hotel Wilmslow and The Trearddur Bay Hotel in Anglesey.
The company’s 47-strong Managed House division is now operating 346 bedrooms, with bedroom sales now representing 20% of the company’s managed house turnover.
No new pubs were acquired during the year, although The Pointing Dog in Cheadle was bought from Marston’s plc in June 2023. Two pubs were sold: The Railway & Linnet in Oldham and The Holland Arms in Anglesey, generating £332k book profit.
The business had year-end cash balances of £10m and a revolving bank credit facility of £15m from NatWest, which means that the company has £25m at its immediate disposal to invest, with the funds marked for new pub acquisitions.
The company pension scheme had a net asset surplus at year-end of £7.8m (2022: £5.1m).
New board directors include Simon Townsend, former chief executive of Ei Group plc, who joins the main board as a non-executive director in April 2023, while Dave Espley has joined the JW Lees Management Board as its Director of Property.
William Lees-Jones’s son Louis also joined the company in April 2023, the first member of the seventh generation of original founder John Lees to join the family company. He has worked in hospitality outside the business after graduating from the Ecole Hotelière de Lausanne in 2018 and has since worked at the Peninsula Hotel Paris, The Four Seasons Hotel Kyoto, The Pig on the Beach Hotel in Dorset and D&D Restaurants’ 20 Stories in Manchester before joining JW Lees as Openings Manager.
