Thwaites (Daniel) Plc - Annual Financial Report

DANIEL THWAITES PLC

RESULTS FOR YEAR ENDED 31 MARCH 2026

CHAIRMAN’S STATEMENT

The Company has delivered a very strong performance in challenging conditions and has shown that when the stars are aligned our properties are positioned to trade very well. The positioning of our properties towards experience and quality is resonating with our customers.

The year got off to a strong start with a sustained period of sunny weather and the investments that we made last spring, particularly in the inns, meant that trade was brisk. We did increase prices this year to try to accommodate some of the uplift in the cost of employing our teams, which included increases to National Insurance, but we tried to keep these to a minimum. Instead, we have examined how we operate the business and have re-engineered our offer and the way that we operate to try to deliver savings through efficiencies.

As the year progressed our sales momentum was sustained and operating margins improved as the changes made earlier in the year were realised. Our investment in Langdale Chase is maturing as it is now in its second full year of trading and it was pleasing that its profits doubled year on year. The success of our recent investments has encouraged us to step up the investment programme in the coming year.

We were delighted that we were awarded AA Hotel Group of the Year which is a testament to the hard work and dedication of our teams across the business.

Results

Turnover for the year to 31 March 2026 grew by 5% to £127.0m (2025: £120.6m).

Operating profit before property disposals grew by 10% to £13.0m (2025: £11.8m). The earnings per share increased by 5% to 13.6p (2025: 12.9p).

Net Debt on 31 March 2026 was £67.7m (2025: £71.4m), which is a decrease of £3.7m due to strong cash generation from trading and the receipts from the sale of several properties.

The Bank of England base rate fell from 4.5% at the start of the year to 3.75% at the end of March 2026. This reduction is slower than previously forecast and consequently we have seen a gain on our interest rate swaps measured at fair value of £0.4m and our swap liabilities have reduced to £1.2m.

Our historic defined benefit pension scheme continues to show a surplus of £28.3m (2025: £29.7m), consequently the Company is not required to contribute to either the scheme or its running costs for the foreseeable future.

The profits retained for the year together with the cumulative impact of these positive factors on our balance sheet provided a net asset value per share on 31 March 2026 of £4.54 (2025: £4.31).

Several large packages of shares became available during the year and we were able to buy back 2,187,500 shares for an average price of £0.91, a total cost of £2.0m.

Acquisitions, Developments and Disposals

In October 2025 we acquired the lease of the Blue Bell Cider House in Hockley Heath which sits within our tenanted pub business. This is a high-volume canal side pub close to the Bulls Head in Earlswood which is one of our inns.

Capital expenditure was £13.4m (2025: £14.7m), and whilst a reduction from last year was still a sizeable investment to improve the quality and offerings in our properties.

During the year we sold six pubs that no longer met our requirements and four surplus ancillary properties with total proceeds of £3.6m (2025: £2.1m).

Dividend

An interim dividend of 0.95p per share (2025: 0.9p) was paid in January 2026 and the Board recommends a final dividend of 2.8p per share (2025: 2.6p). The Board will keep the level of dividend under review, continuing to assess the level of future dividend in the light of Company performance.

Board

Andrew Stothert stepped down from the Board on 31 December 2025 after seven years as a non-executive director. Andrew has been invaluable in challenging the Board and the Executive Team to look at everything through the eyes of our customer and consider how we communicate with our guests. I would like to thank him for his support and wise counsel over that time.

People

In addition to winning an award from the AA this year, we were also placed first in the Hospitality Awards Learning and Development category, which is well deserved recognition of the progress that we have made in creating development pathways through our business and helping individuals to grow and progress.

The excellent set of results this year has been delivered against the backdrop of a tough trading environment and wider sector challenges that have required us to ask our teams to confront change, which they have risen to admirably. I would like to express my sincere thanks to all of our teams and people across the business who are the backbone of our Company. Your passion and warm hospitality is found in every corner of the Company and is the cornerstone of our success.

I would also like to thank our shareholders; the Company is in a strong financial position and well positioned for the future as a direct result of your ongoing support.

Outlook

 

We have started the year with an early Easter and despite some sunshine it was cool, but trading was in line with expectations. We have invested in several expanded and more permanent outdoor bars and these will help us to handle volume when our pubs, hotels and inns are at their peak.

The situation in the Middle East is creating a lot of uncertainty on several different fronts. Energy costs have soared, and the timing of a resolution is extremely uncertain, following which we expect a period of normalisation. The Company has hedged most of its energy costs for the remainder of this year at rates that were prevailing before the war.

The wider inflationary aspects of the war are yet to emerge, but it is likely that food prices will rise and interest rates may stay higher for longer. We will review pricing and menus as things become clearer but are mindful of providing good value for money. The company has secure long term bank facilities, and all of these are at a fixed rate or are hedged to fixed rates.

This summer we have the football World Cup which we hope will have a positive impact on our pubs.

The ability for people to travel overseas this summer has also been called into doubt due to availability of aviation fuel, which may present an opportunity for a strong staycation season. It seems that the general public are currently sitting on their hands, undecided as to what to do; if there is a burst in domestic activity it is likely to come late. Should that be the case our fantastic collection of pubs, inns, hotels and spas are perfectly placed to be able to capitalise on this.

OPERATING REVIEW

 

Overview

The Company started the year with significant headwinds from increases in employment costs and taxes, and a challenging consumer environment. Fortunately, we immediately encountered an outstanding period of good weather, and Easter fell towards the end of April, which meant that we got off to the best start possible, ahead of expectations.

Investment into our inns was front loaded into the early part of the year, which was beneficial throughout the spring and we also had the benefit of the Buck Inn in Malham, which we acquired in March 2025, and brought into our inns estate.

Entering the summer, we experienced some unsettled weather but fortunately in the key months of July and August nature smiled on us again and we broke sales records right across the business. Langdale Chase saw some outstanding trade and exceeded our expectations.

Trading throughout the rest of the year was largely marginally better than we had hoped and October was a strong month for the managed businesses, with strong half term pickup and operational cost savings from various efficiency programmes feeding through in the hotels.

Much of the summer and autumn was spent trying to help the government to understand that their proposals to significantly increase business rates for the hospitality industry would be disastrous. It was a relief to our pub tenants that pubs were spared the increases when the government changed their minds to raise taxes on them further. This has been helpful in encouraging people to continue to want to run tenanted pubs and our application numbers are strong.

This has been the first full year of using Reputation, which measures the quality of our service in our managed properties. Once we got to grips with it, we saw sustained improvements in our scores across the business and ended the year with most of our properties ahead of their benchmark. This year we will roll the tool out to our tenanted pub estate.

Towards the end of the year, we rebuilt all of the websites across the company, tweaking our branding and bringing much better customer functionality to our online booking system. We believe that the new sites, which are far more visually appealing will help to promote direct sales and reduce online commissions.

We continued to make some major investments to every area of the business although perhaps a little less than in the previous year. As a result, disruption from closure reduced over the course of the year and the investments that we did make on the whole exceeded their targeted returns.

Financial results

Turnover for the year was £127.0m, (2025: £120.6m), an increase of 5%. The operating profit for the year was £13.2m, (2025: £12.2m) and the profit before tax, which benefited from a mark to market gain on interest rate swaps was £10.6m (2025: £9.8m). Net debt reduced to £67.7m, (2025: £71.4m) a decrease of £3.7m. At the year end the Company had banking facilities of £82.5m, giving headroom to its debt facilities of £14.8m.

Pubs and Inns

Understanding our Pubs

Our freehold estate of tenanted pubs numbers 193 properties. We continue to recycle capital into new, more attractive tenanted and managed pub opportunities, where there is the potential to invest and add value. We actively dispose of pubs that we do not believe have a long-term future with us.

Our pub estate encompasses community locals to destination food led pubs in both rural and town centre locations, ranging geographically from Cumbria to the Midlands, and from North Wales to Yorkshire.  

We have been operating tenanted pubs for a long time, and we have a strong reputation for our well-established approach. We strongly value our reputation as a partner of choice, acting with integrity, and focusing on investing alongside proven operators to expand and improve the premises with a focus on establishing good quality food offerings. Where the property has the scope, and we believe the demand exists, we support the development of letting bedrooms. We have an estate of high quality, sustainable businesses with multiple income streams that can generate attractive cashflows.

Our tenanted pubs are a mature business, looking to deliver returns at least in line with inflation. They tend to be heavily influenced by the weather and are subject to the vagaries of the British summer.

Pubs performance

The turnover of our tenanted pubs once again grew year on year by 1%, with EBITDA and operating profit both growing by 1% on the previous year.

Uncertainty around tax increases, particularly business rates, had proved an impediment to people entering the industry, however the mid-year U-turn by the government eased fears and we saw an uplift in the number of people enquiring about running their own pub.  

The number of pubs that needed to be re-let started the year at 15 and ended the year at 13. Our vacancy rate of about 6% in materially better than the overall pub industry and reflects our reputation in the north as a company that is run to traditional family values.

We continue to develop our WayInn franchise agreement and have some very successful pubs running on this model. Approximately 5-10% of the estate is run on this model which flexes over time as our customers can switch between this, and a more traditional tenancy agreement.

Beer volumes decreased by 1% year on year with wines and spirits up by 1% and soft drinks 2% up. Tenanted pub sales decreased by 1% and gross margin fell by 0.3%, largely because of the continuing strength of Guinness sales, which makes us lower margins. Gaming machine income has continued a good run, up 6% year on year and we continue to focus on machine penetration and switching to contactless payments for pool tables. A new factor in the marketplace has been the rise of online linked and automatic darts boards which have proved to be very popular where we have added them to the overall offer, as they drive both increased visits and dwell time.

We had a quieter year of investment into the tenanted pubs with just seven mid-spend schemes. Transformational schemes were delivered at the Brown Cow, Chorley, Swan and Cemetery, Bury and Wagonmakers, Bury. These schemes are delivering us strong returns and give us confidence to continue with our strategy.

In October we acquired the lease on The Blue Bell Cider House, Hockley Heath which is a high-quality addition to the estate. We do not usually take on lease liabilities, but this pub is in a fantastic canal side location where we believe we can add value and generate a strong return on investment.

Understanding our Inns

We own and manage a growing portfolio of inns, and we will continue to look to expand this segment of our business in the future through the acquisition of high-quality properties in outstanding locations.

Our Inns are positioned at the premium end of the market, they have a busy bar at their core, a home cooked food offering and high quality, comfortable accommodation – they focus on providing outstanding hospitality and offer an attractive and more personal alternative to the mid-market hotel chains.

This segment of the market has performed strongly over the past few years and is positioned for continued growth as customers look for something special that is authentic and honest, delivered by operators who can provide a quality experience consistently.

Inns performance

The inns have had another good year of growth with sales increasing by 8% on the previous year. A continuing focus on our outdoor areas saw our drinks sales increase by 12% and our food sales by 7%.

Last year we put additional focus onto our food offer, which has led to changes in the size of our menus, with a tighter core menu and specials delivered on a more frequent rotational basis. This has been effective at increase spend per head and food margins.

Our investment programme in the inns mainly was timed for the start of the year with large spends at Bulls Head, Earlswood, Royal Oak, Keswick and Toll House, Lancaster. Later in the year we also refreshed the Lister Arms in Malham. There were some stand out performances across the inns this year and records were broken across the board. An increase in EBITDA of 10% reflected some very strong performances.

We continue to look for new properties to add to the inns, whilst there are many properties on the market, we remain highly selective.

Understanding our Hotels & Spas

We own and operate ten hotels which are spread across England. Our hotels are positioned towards the premium end of the market, and most have leisure and spa facilities. In recent years we have invested in them to amplify the individual character of each hotel in its local area, supported by a great food and drink offering with local nuances. Our vision, like our inns, is to create a collection of interesting, characterful contemporary hotels, that are the best in their local area.

Hotels & Spas performance

Turnover increased by 6%, driven by a strong increase in room occupancy, which increased year on year by 6%, overall rooms yield increased by 7% as we adopted a conservative approach to rooms pricing in a price sensitive market. Overall, our rate strategy during the year was successful.

Our spas and health and beauty treatments are playing an increasingly important role in the success of our hotels and allow us to differentiate our offering from the competition. The far-sighted investments made into our spa facilities are now sought after in a market with a customer base that is becoming increasingly focused on wellness.   It was therefore pleasing that this area of our hotels posted very strong year on year growth of 14%. The investment made into the Solent Hotel & Spa pool hall last autumn has been a great success and played an important role in the overall growth rate with sales there up 45% year on year and still growing.

Langdale Chase Hotel on Lake Windermere has continued to receive fantastic reviews and a growing following. Once more it was listed in the Times Top 100 Hotels in the UK, up four places year on year at number nine. The hotel is trading strongly and is very popular, the team are to be congratulated on the overall experience which is leading to exceptional Reputation scores, strong repeat business and EBITDA more than doubling year on year.

During the year we invested approximately £0.6m in delivering solar panel schemes at Aztec Hotel & Spa, North Lakes Hotel & Spa and our Head Office. These investments are creating a base load of electricity production that helps to insulate us from the vagaries of the energy market and are delivering returns in excess of 25%.

Summary and future developments

The Company has delivered a very strong set of results in the circumstances and strong top line growth, which when coupled to operational initiatives to mitigate increases in the cost base has converted into a strong operating profit growth of 10%. The Company is a good position to consolidate the gains made over the last year and is financially strong.

We have plans in the coming year to step up our investment programme, however we are keeping a very close eye on developments in the Middle East and the impact that may have on our customers propensity to spend and will adapt our plans accordingly.

The first month of our financial year has not been as strong as last year, and the weather has played a role in this. However, the diversified and well invested nature of our Company means that we have some excellent opportunities open to us to continue to grow.

 

Financial Review

Results

Turnover for the year ended 31 March 2026 increased by 5% to £127.0m (2025: £120.6m), whilst operating profit was 8% higher at £13.2m (2025: £12.2m).

The measurement of the interest rate swaps at fair value resulted in a gain in the profit and loss account of £0.4m (2025: £1.2m).

Profit before taxation for the year was £10.6m (2025: £9.8m).

Business Review

The key issues facing the Group are covered in the Chairman’s Statement and Strategic Report. The KPIs used by the Group to monitor its overall financial position can be summarised as follows:

The principal non-financial indicators monitored by management are:

Pubs and Inns

Utility consumption, health and safety incidents, beer volumes, customer ratings and tenant recruitment.

Hotels

Utility consumption, room occupancy rates, customer ratings, health and safety incidents, spa memberships and wedding and event numbers.

Interest rate swaps measured at fair value

The Group holds derivative liabilities in the form of interest rate swaps for £45m which are recognised as a financial liability.   The movement in the fair value of these interest rate swaps during the year resulted in a gain in the profit and loss account for the year ended 31 March 2026 of £0.4m (2025: £1.2m).

Interest payable

Net interest payable increased to £4.7m (2025: £5.3m) due to lower debt levels and lower interest rates.

Taxation

There is a tax charge of £2.8m on the profit for the year, an effective rate of 26.4%.

Earnings per share

Earnings per share of 13.6p (2025: 12.9p).

Dividend

An interim dividend of 0.95p has been paid and the Board recommends a final dividend of 2.8p per share, which will make a total of 3.75p for 2026 (2025: 3.5p). The dividend is payable on 31 July 2026 to shareholders on the register on 3 July 2026.

Cash flow and financing

The Group’s net borrowing decreased by £3.7m, from £71.4m on 31 March 2025 to £67.7m on 31 March 2026 due to cash generated from operating activities.

The Group has £40.5m of long-term debt, £31m of bank loans and cash balances of £3.8m on 31 March 2026. The Group has three-year revolving credit bank facilities of £40m which were renewed in December 2025.

The long-term debt reduced from £45m to £40.5m during the year as the first amortisation of £4.5m was paid in December 2025. The next amortisation of this debt is due in December 2026 which is less than twelve months from the date of approval of the balance sheet and therefore shown within current liabilities on 31 March 2026.

Pensions

The defined benefit pension scheme had a surplus, before tax, of £28.3m on 31 March 2026 which was a decrease of £1.4m from the surplus of £29.7m, before tax, on 31 March 2025.

The Group did not pay any contributions into the scheme during the year, and the scheme paid all its administration costs.

Property

During the year we sold six pubs and four ancillary properties for a total of £3.6m generating a profit against book value, after disposal costs, of £0.2m.

In line with our accounting policy, 20% of our properties were subject to a formal revaluation, and additionally an internal valuation review was carried out on the rest of our property estate.   This resulted in an increase in the total value of our property portfolio of £2.4m, of which £2.8m was added to the revaluation reserve and £0.4m deducted from cost and charged to the profit and loss account.

Treasury policy and financial risk management

Treasury policies are subject to Board approval. All borrowings are in sterling and comprise a mixture of fixed interest loans and facilities carrying SONIA related floating rates. The Group has interest rate swaps for £45m where it is committed to pay the difference between SONIA and fixed interest rates. On 31 March 2026 a financial liability of £1.2m (2025: £1.7m) has been recognised in respect of these interest rate swap contracts.

Going Concern

On 31 March 2026 the Company had total borrowing facilities of £82.5m, which were made up of the long-term loan of £40.5m, revolving credit facilities of £40m, and overdraft facilities of £2m. When compared to net debt of £67.7m on 31 March 2026, this gave headroom of £14.8m.

The three-year revolving credit facilities were renewed in December 2025.

The Company has generated positive operating cashflows over the period, which has allowed it to invest £13.4m in capital projects during the year, whilst comfortably meeting its banking covenants. Financial modelling shows that it is expected to be cash generative and meet its banking covenants for at least the next twelve months from the date of signing the financial statements.

The directors therefore have a reasonable expectation that the Group has sufficient resources to continue in operational existence, and meet its liabilities as they fall due, for the period of at least 12 months from the approval of these financial statements. Accordingly, the directors continue to adopt a going concern basis of preparation of these financial statements.

 

Kevin Wood

Finance Director

17 June 2026

 

 

 

 

 

 

 

 

EXTRACT FROM AUDITED FULL FINANCIAL STATEMENTS FOR THE YEAR ENDED

31 MARCH 2026

 

 

GROUP PROFIT AND LOSS ACCOUNT

 

 

  Basic and diluted earnings per share                   13.6p     12.9p

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  DANIEL THWAITES PLC

 

 

 

 

 

 

 

DANIEL THWAITES PLC

 

GROUP CASH FLOW STATEMENT

For the year ended 31 March 2026

 

 

 

 

 

 

 

 

 

 

Note

 

The full Annual Report and Accounts 2026 are available on the website: www.thwaites.co.uk