Butcombe delivers resilient growth

The business, which spans pubs, inns and brewing across the UK and Channel Islands, has credited its success to a well-balanced mix of performance across divisions, attention to detail and a steady hand on the tiller. The post Butcombe delivers resilient growth appeared first on The Drinks Business.

May 22, 2025 - 11:15

The business, which spans pubs, inns and brewing across the UK and Channel Islands, has credited its success to a well-balanced mix of performance across divisions, attention to detail and a steady hand on the tiller. Close-up of a bartender pouring a draught lager beerThe business, which spans pubs, inns and brewing across the UK and Channel Islands, has credited its success to a well-balanced mix of performance across divisions, attention to detail and a steady hand on the tiller.

Butcombe Group has rounded off a buoyant year with underlying group EBITDA up 7.4% to £13.8 million for the 52 weeks to 25 January 2025. It was the group’s managed pubs that stole the spotlight. These achieved an 18% rise in EBITDA to £13.5 million, with like-for-like sales in the UK up 7.5%. Food was the star of the show, up 12% year-on-year. The Channel Islands pubs proved equally sprightly, posting an 8.5% lift. Margins moved in the right direction too, helped by a 150 basis point improvement in the managed estate. Accommodation continued to be a solid earner, contributing 14.5% of UK managed pub revenue. The Butcombe Boutique Inns concept, now rolled out to 10 sites, drew “wonderful feedback” and is slated for further growth. Menus were kept sharp with brunch, small plates and classic British fare all featuring. Wine lists were refined with a tiered approach that lets guests trade up or stay grounded. “We’ve recognised the changing habits of when people choose to eat,” said chief executive Jonathan Lawson, pointing to rising breakfast trade and longer dwell times.

Beer and business as usual

The Brewing and Drinks arm added a further £0.3 million to the pot, bringing EBITDA to £7 million. UK Free Trade sales rose 8%. Goram IPA Zero continues to make inroads, now stocked in 73 Tesco stores and a non-alcoholic version of Tall Tales Pale Ale is set to follow. Despite soggy weather, the business managed to hold its ground thanks to strong own-label offerings, well-drilled sales teams and the addition of online ordering. EBITDA margin edged up to 11.2%. The tenanted side of the business was trimmed for strength, with nine pubs sold over two years. This brought overall EBITDA down to £4.8 million, but average EBITDA per pub climbed by 3.8%, reflecting a sharper, more productive estate. Butcombe’s customer data is beginning to pay dividends. Till transactions tied to its loyalty scheme reached 44% in the Channel Islands and 15% in the UK. AI and machine learning are being quietly deployed to forecast demand, tailor messaging and fine-tune operations. Lawson noted this was particularly important “following the 2024 budget,” which raised labour costs significantly.

Estate revalued, confidence renewed

An independent revaluation of the group’s 122 pubs saw their worth climb to £204.1 million, a 12% increase since 2022. Meanwhile, Butcombe generated £10.3 million in operational cash, reduced net debt by £2.3 million and invested £8.5 million into the estate, including six major pub overhauls. Butcombe remains fixed on becoming carbon neutral by 2030. Carbon emissions fell 16%, helped by a move to REGO-backed electricity and a charming circular economy initiative: spent grain from the brewery now feeds cows whose milk becomes the cheese served in Butcombe pubs.

A strong start to the new year

First quarter trading in FY26 has been encouraging. UK managed pubs rose 11.1% LFL, with drinks up 13.3% and food up 10.3%. Mother’s Day became the group’s best-ever trading day, surpassing even Christmas. Early spring sunshine also helped, with nearly 40% of seats now outdoors. A new service app launches this May. Lawson offered warm praise for his teams: “We now employ 1,855 people, more than double the number we employed in 2019. We firmly believe that delivering a strong customer experience starts with the colleague experience.” Staff retention improved by 22%, and the company earned a spot in the World’s Happiest Places to Work index. With steady investment in people, product and digital nous, it appears to be a business keenly aware of both its past and its future.