A pub chain chaired by serial restaurateur Luke Johnson has warned that the new business rates system will hold it back from expanding at the pace it wants to.
Charlie McVeigh, founder of Draft House, told The Evening Standard: “The rates system is irrational and penalises pubs. It means we will not be expanding at a pace we originally wanted.”
Draft House has nine sites in London and estimates its rent rises and new rates bills could stack up an additional £240,000 in overheads from next year.
According to the report, the firm warned of a “significant challenge” from rising costs, including the increases in National Living Wage which come in this year.
The business made a loss of £32,000 last year, compared to a £10,500 profit the year before. This was partly attributed to the opening of three new pubs. But stripping out one off costs, underlying profit rose to nearly £800,000 from just over £600,000.
Draft House posted an increased turnover over 27% (to £8m), which it attributed to strong sales of burgers and Camden Pale Ale.