Peter Borg-Neal, CEO of Oakman Inns & Restaurants, has issued a précis of activities over the last year, priorities, and the resulting progress of Oakman Inns & Restaurants.
Three key priorities:
- To attract a senior colleague to the business to share the ever-increasing workload
- To sort out financing (after five years of rapid expansion and growth it needed re-thinking)
- To get new acquisitions open
All three priorities, he announced, have been met over the last seven days.
New Executive Director to join in February
Joseph Evans (pictured above with Peter Borg-Neal) is currently Financial Controller of Whitbread Hotel and Restaurant Division, and will be joining Oakman Inns as a Board Director in February. In his thirteen years at Whitbread he has gathered a huge range of experience and has been instrumental in the success of that business. He currently leads a team of 110 people in the division which has an annual turnover of c£1.4bn, profits of c£320m, net assets of c£3bn across 1,500 locations, around 25,000 employees, and is growing by 10% new space every year and is making payments of c£1bn per annum.
“The fact that he is leaving such a major post to join us for the next part of his career is testament to the esteem with which Oakman Inns is held across our industry and the very exciting future we are building towards. Joseph shares my vision of building a ‘best in class’ business that can deliver a tremendous outcome for investors, employees, suppliers and customers alike.”
£5.5 million fund raising round completed
Despite an unsupportive bank, Oakman started looking for funds in April 2012 and received a number of offers from private equity sources. However, none reflected the fundamental value of the business and, despite the pressure, Mr Borg-Neal was determined not to sell out too cheaply. The decision by The Government in the 2012 Autumn Statement to extend the Enterprise Investment Scheme provided the opportunity that was needed and, in February 2013, a new EIS fund-raising round was launched.
The initial target was £4.5 million but, due to impending acquisitions, this was upped to £5.5 million. The entire sum was finally realized on 29 November. All the funds taken in are either straight-forward equity or shareholder loan notes. In addition, all existing loan note holders agreed to novate their agreements for another three years.
This leaves the business with a strong balance sheet with around £7 million of equity, £3.9 million of shareholder loans, and only £1.2 million of bank debt (all of it secured via EFG and freehold property).
“We believe the value of the business, net of debt, is around £15 million and our freehold property alone is worth over £7 million. Going forward, we will look to gradually leverage the value of that freehold property whilst maintaining a cautious approach to debt.”
£3½ million investment opened in Abingdon-on-Thames
The sixth Oakman Inn – The Beech House in Beaconsfield – opened earlier in 2013 and has proven an instant success, smashing its targets. The £800k investment there was however dwarfed by the £3.5m costs associated with the acquisition and development of The Crown & Thistle in Abingdon-on-Thames.
At times this has looked like an acquisition too far, given the funding challenges and the very intricate (and expensive) nature of the development project. However, due to the amazing support of the investors, the project was completed and the end result is stunning. It is very early days from a financial perspective, but the initial numbers look very exciting.
In conclusion
Peter Borg-Neal writes in conclusion:
“2013 has been simultaneously brilliant and difficult, fun and scary! But to be recognized as ‘Pub Company of the Year’ at the Eat Out Awards, voted by industry peers as the ‘Pub Company of the Year’ at the R200 Awards and given recognition by The Sustainable Restaurant Association makes it all so worthwhile. As I write, I have just been told that we have also been nominated in three categories at next year’s Publican Awards.
“I would like to end by thanking Mike Smith, our Chairman, all our Non-Executive Directors, our shareholders and most importantly all of the Oakman team. They are a hugely talented group of people and I feel very lucky to have the honour of working with them all.”
About Oakman Inns & Restaurants
Founded in 2007 by its CEO, Peter Borg-Neal, Oakman Inns & Restaurants established the concept of the ‘modern public house’ by successfully transforming historic buildings into contemporary spaces which complement their traditional foundations.
Their portfolio of eight properties comprises three in Hertfordshire (The Akeman, Tring; the Red Lion, Water End and the Kings Arms, Berkhamsted); three in Oxfordshire (The Old Post Office, Wallingford, The Blue Boar, Witney and The Crown & Thistle, Abingdon); two in Buckinghamshire (The Beech House, Beaconsfield and The Cook & Fillet, near Aylesbury).
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