Pub operator the Orchid Group has reported an increase in sales of 3.7% in its first set of financial results published since the company was refinanced earlier this year.
Turnover at the group, which runs around 260 pubs and bars, was up to £179.5m for the year to 31 December 2011, with gross margins up by £2.3m, despite increases in alcohol duty and VAT.
In February, Deutsche Bank became the sole financial backers of the company, with banking facilities agreed to January 2015.
Orchid chief executive Rufus Hall said that the restructuring had placed the company on a firmer footing. "The management team now has the operational and financial resources to make capital investment in the core estate and to churn under-performing pubs," he explained.
"With the new financial structure in place, a clear plan, our great customer offer and strong teams, the directors of Orchid are confident the business is well positioned to deliver sustainable growth over the next few years."
The financial restructuring of the company is enabling Orchid to undertake a £20m capital investment in the company over the next three years, which will help move wet-led pubs to food-led offerings. Food currently accounts for 40% of Orchid's sales, up from 28% in 2006.
Hall said the strong annual results reflected the company's continued investment in people. "The most important part of our business is our people," he added. "We work hard to create a demanding but enjoyable environment for our teams where they feel valued and motivated, and are provided ample opportunity to develop and progress."
By Janet Harmer
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