Focus on food helps pub group grow turnover

Pub operator the Orchid Group has reported a rise in sales in its latest set of full-year results after switching to a food focused business strategy.

The company, which runs around 260 pubs and bars, saw sales rise 3.7 per cent to £179.5 million in the year to December 31st 2011, with gross margins up by £2.3 million.

The results are the first published by the company following a complete restructuring of its finances, with Deutsche Bank becoming its sole financial backer.

This has allowed Orchid to embark on a £20 million, three-year capital investment programme, which has seen it begin to shift the focus of its wet-led establishment to food-led businesses.

"It has been a significant period of progress for the company, and one that has seen us continue to move forward on every level," Harpers quotes Orchid chief executive Rufus Hall as saying.

He added that food now accounts for over 40 per cent of the group's sales mix, up from 28 per cent in 2006, "reflecting our focus on food-led occasions and recognising changing customer trends".

Despite the rise in turnover, EBITDAR fell to £40.6 million during the year, down from £42.9 million in the previous year.

However, Mr Hall pointed out that this compares favourably with other pub groups at a time when trading conditions have been tough.

Meanwhile, with the firm planning future growth and enjoying a bright start to 2012, it could prove a source of hospitality employment in the future, particularly as the restructuring programme continues to develop.

Mr Hall added that the firm has "continued to perform ahead of expectations for the first three quarters of 2012".

He said: "This performance has been very encouraging given the on-going pressure on consumer spending and the wettest British summer for 100 years.

"This resilient performance is the perfect platform for future growth driven primarily by our recently commenced £20m capital investment programme."

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