Brewhouse and Kitchen narrows FY losses as margins improve
Directors still warned that pressures from rising costs and weak investor appetite have forced a rethink of expansion plans
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Brewpub operator, Brewhouse and Kitchen, has reported a full-year operating profit of £189k, up from a £675k loss the prior year, despite facing a “challenging” trading environment.
While the company’s turnover dipped slightly to £16.3m for the year ended 28 September 2024, down from £16.7m in the year before, shareholders’ equity rose to £14.7m, from £13.9m, and its gross profit margin stood at 77%.
According to Brewhouse and Kitchen’s filings at Companies House, sales and EBITDA remained broadly flat year-on-year, with trading cash flow positive and the group’s cash position “strong”.
However, directors still warned that pressures from rising costs, weak investor appetite, and incoming legislation under the new Labour government have forced a rethink of expansion plans. A £4.1m rights issue launched during the period raised only £1.2m.
The board stated in its Companies House filing: “It became clear that investor appetite for the pub sector was by no means strong. The sharp increase to National Insurance contributions amounts to nothing more than a punitive tax on employers and jobs; and therefore a break to growth.”
As a result, the company said it would focus on conserving cash while assessing the impact of higher National Insurance and national minimum wage rates introduced in April. Price increases and head office restructuring have been implemented in response.
Brewhouse and Kitchen is continuing with plans to convert its Southbourne site into a brewpub with 14 hotel rooms, pending planning approval. It is also repositioning smaller high street venues into its craft house format, removing micro-breweries and adding street food and delivery options.
In the first 35 weeks of the current financial year, like-for-like sales rose 2.5%. The group also secured a new £4m five-year loan facility with LHV Bank and extended its existing loan with Barclays Bank.
Despite ongoing headwinds, the company said it remained confident in its long-term prospects, citing its largely freehold estate, experienced team, and readiness to grow when conditions improve.
