Brewhouse & Kitchen reports operating loss after year of heavy investment

UK pub chain Brewhouse & Kitchen posted an operating loss of more than £500,000 in its 2018 results, but has been recognised by the London Stock Exchange as “one of the fastest-growing” SMEs in the country, after a year of heavy investment into its workforce and estate.

Photo: Brewhouse & Kitchen

Brewhouse & Kitchen has been listed in the LSE’s annual “1000 Companies that Inspire Britain” report.

The report, which is now in its sixth year, features  small and medium-sized businesses from a diverse range of sectors and regions, “reflecting the entrepreneurial drive seen across the country”, according to LSE.

Over two-thirds of the companies appear in the report for the first time, while six firms are making their fifth consecutive appearance. Other beer businesses that made the list this year include Brewdog, Innis & Gunn, importer Cave Direct, and

CEO Kris Gumbrell (Photo: B&K)

London-based chain The City Pub Group.

The brewpub chain’s chief executive, Kris Gumbrell, said, despite challenges, “the brand has evolved and adapted to maintain it’s place at the head of a market that sees the continued rise of Craft Beer.”

Overall average annual revenue growth of the 1000 UK companies featured in the report was 108%, up from 70% in 2018.

Brewhouse & Kitchen also posted its annual results for 2018 to coincide with the report. Although sales hit £14.1 million in the year to September 2018, with overall growth of 21%, it reported an operating loss of £532,200.

The loss came after a number of new hires in 2017, a spokesperson told db, as well as the acquisition of its first hotel site last year; the three star Beechwood Hall in Worthing.

Brewhouse & Kitchen plans to open its first hotel later this year, with another three to open over the next 18 months, according to an emailed statement.

The company moved back into the black in 2017 with a pre-tax profit of £575,000, up from a loss of slightly over £672,000 the previous year.

In 2017, the brewpub chain brought its finance system in-house, appointing a new financial controller and management accountant. A number of new roles were also created at the business including an operations director, food operational support team, brand trainer and head of recruitment.

The company, founded in 2013, is the UK’s largest brewpub operator with 13 venues of its own, as well as nine franchise brewpubs it operates and supports. Some 19 of its sites have opened in the last four years alone.

Gumbrell said that last year “the board felt it was time to step back, invest into our systems, consolidate and re-enforce the core team. We now have the largest and most established Brewpub business with the UK market.

He said that producing craft-positioned beer “is now built into the core UK pub offering to various degrees, so it is essential that we maintain our competitive edge of leading the market for innovation, craft beer retail and a ‘best in class’ experience business.”

“We have focused and invested in growing this part of our business and we continue to explore new ideas to develop this essential part of our offering.”