Hawthorn, the community pub company, provided a brief company update today as part of parent company, NewRiver REIT’s Q3 update.

All of our community pubs in the UK are temporarily closed due to lockdown restrictions, so once again, our focus has been on protecting Hawthorn’s financial position and supporting our pub partners throughout the closure period so we can bounce back quickly on reopening, as we demonstrated in July 2020. Our team has been engaging closely with pub partners to ensure they can access Government support schemes, particularly local support grants and the Job Retention Scheme. The goodwill generated from our engagement has been reflected in an 87% retention rate for pub partners who were tenants of Hawthorn at 31 March 2020.

Over the past nine months, our pub partners have demonstrated their resilience in challenging circumstances, and we are confident that the vast majority of our pubs will emerge from the current restrictions in a strong position. The completion of £2.7 million of non-core pub disposals since 30 September 2020 further demonstrates liquidity and confidence in the long-term prospects of community pubs as an asset class.

We have also continued to improve the quality of the portfolio with selected capex projects resumed and 86% of the portfolio invested in during the last lockdown. Aligned to this we are seeing a resurgence in demand for new convenience stores around the UK. With lots of surplus land in our pub portfolio and good road visibility locations in neighbourhoods around the country we are well placed to benefit from this.

The community and suburban location of our portfolio is well placed to benefit from consumers working from home and using their local services and facilities. This was clearly evident in the summer of 2020 when Hawthorn outperformed the UK pub sector and we believe this can be achieved again when restrictions are relaxed later this year. Our teams are currently preparing to bounce back and reopen our pubs in April 2021 and, should Government guidance align with this, or allow an earlier reopening, we are optimistic about the trading prospects of Hawthorn in the new financial year.

Hawthorn CEO, Mark Davies, said:

“The Great British Pub Sector – which serves so many communities around the UK – is under real pressure, and we at Hawthorn will continue to do all we can, working closely with industry colleagues and the BBPA, to get the Government to listen to our concerns and provide our Pub partners with the support they so desperately need to survive this latest Lockdown.

“Hawthorn’s overwhelming priority is to protect our people and to protect our pubs. We’re continuing to support our Pub Partners to help them stay afloat and to ensure that they can thrive again and bounce back when their pubs reopen. We more than doubled our planned CAPEX spending for the quarter, investing a total of £9.4m on 270 projects, increasing our average spend per-project by almost 60%, and adding an extra 61 additional sites to our investment programme with a clear focus on outdoor scheme investments and creating more capacity. We also expect to acquire more pubs in 2021. Hawthorn is a dynamic, ambitious company with a proven track record of acquiring Pub portfolios, and we have circa £250m of cash and available liquidity to the business, with additional funds available when required. We remain bullish about the role that community pubs will play in people’s lives once lockdown is lifted. We urge the Government to provide us with a clear roadmap for reopening, and ensure significantly more financial support is urgently prioritised, particularly on business rates and Vat to ensure these vital community establishments can survive.”  

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