Staffing challenges hit Oakman growth

Oakman executive chairman Peter Borg-Neal has said that staffing challenges and subsequently having to restrict trading has lost the group a further 2%-3% of growth.

In a trading update, he described staff shortages and the impact of inflation as “the biggest challenges we face as a management team”, with inflation in particular expected to impact profit, as well as concerns over “a high degree of uncertainty driven by the wider geo-political issues, such as the war in Ukraine”.

Borg-Neal said: “Accordingly, we have had to slow our opening programme down as we have become a little more cautious."

The three major openings for the group have been the Rose in Wokingham, the Grand Junction Arms in Bulbourne, and the Grand Junction in Buckingham, which the group said have all performed ahead of investment targets. Oakman recently acquired the Hesketh Arms in Rufford, Lancashire, and is set to reopen the Beech House in Watford in September.

Oakman acquired six pubs and the intellectual property of the Seafood Pub Company in early 2021. Since then, four sites have been added under the leadership of Joycelyn Neve and further additions expected over the next 12 months.

For the group’s financial year 2021/22, ending 3 July 2022, the business reported total group sales of £65.1m.

Borg-Neal said: “As with the rest of our sector, we were hit hard by Christmas cancellations, and sales remained soft through to the spring. Recent weeks have been much better and, although the Jubilee week was not as strong as we had hoped for, we have enjoyed buoyant sales over the rest of June.

“These numbers would have been even better but for the continued challenges regarding staffing.”

In the group’s full year accounts for the financial year ending 4 July 2021, it reported net sales of £32.4m and earnings before interest, tax, depreciation and amortisation (EBITDA) of £3.6m.

Chief executive Dermot King added: “These were not the kind of results that I hoped we would produce when looking forward to this year. However, I believe that we proved our resilience and ingenuity as a management team in the way we coped with an unprecedented set of challenges.

“During the periods across the year when we were allowed to trade from April onwards, our sales outperformed the market by 36%. We improved our customer qualitative scores measured by our ‘Feed It Back’ guest opinion score. We strengthened our balance sheet and increased our cash reserves. We even found time to lead the campaign to reopen hospitality – including helping to produce a government information film about Covid-secure operations.

“We continue to look to the future and grow our business despite the complex set of adversities we faced.”

Oakman owns and operates a portfolio of 38 premium pubs, restaurants and hotels across the North-West, the Midlands and Southern England. The Catey award-winning pub group was founded in 2007 and employs more than 1,500 people.

Staffing shortages across the sector have seen restaurants forced to close or restrict trading. The number of hospitality job vacancies hit 174,000 last month and the loss of business resulting from reduced trading is estimated to have cost the industry £21b in lost revenue.