Oakman Inns and Restaurants has got the year off to a flyer by revealing that it has completed the acquisition of The Royal Foresters, a former Beefeater and Premier Inn in Ascot.
The chain is paying £3.6m for the site and will begin developing a 10,000 square foot Oakman Inn with rooms in the spring. It expects the venture to be completed in the autumn at a cost of £3.5m.
The Royal Foresters is the most significant development in Oakman’s portfolio to date and one that CEO Peter Borg-Neal has had his eye on for some time.
“I admired this site when I was at Whitbread and have coveted it ever since. It is a huge investment for us but we are confident that we have the skills to get strong returns from our investment,” he said.
The news comes as audited accounts for the year ending April 2016 show that Oakman grew turnover by 53% to £19m last year, with like-for-like sales up 6%.
Average sales per core Oakman site continued to exceed £30,000 net per week, while site EBITDA grew by 39% to £3.08m. Group EBITDA more than doubled to £794,000.
Current year trading continues to be strong with like-for-like sales to the end of Q3 up 4%.
The group also enjoyed an excellent Christmas with the four-week trading period ending Sunday 1 January 2017 generating a 30% rise in total sales and 7% increase in like-for-like sales. Average sales per site over the 15 fully developed Oakman Inns was £182,334.
In addition to The Royal Foresters site, Oakman has submitted a planning application to convert a freehold, former nursing home in Olney and contracts have been exchanged for the freehold of 10 Akeman Street in Tring with the intention of allowing the company to extend its current flagship site.
In financial terms, the company has also agreed terms for a £7m senior debt and growth capital facility, as well as initiating a private fund-raising of a further £10m via the Oakman Bond with £5.9m of the total already raised.
The board has also been strengthened with the appointment of John Leslie as non-executive director. Well-known throughout the hospitality industry, the former Intertain CEO was a board colleague of Peter Borg-Neal at Allied Domecq in the 1990s.
Mr Borg-Neal said: “The current year is going exceptionally well and we are considerably ahead of our budget for the year. We saw some choppiness with respect to sales at the beginning of Q3 but a stellar performance over Christmas has got us back on target. I am personally delighted that John has joined our board. He is a long-time friend whose wisdom and strength would be an asset to any board.”