Luke Johnson-backed London pub chain blasts ‘irrational’ business rates system

A London pub chain chaired by serial entrepreneur Luke Johnson , on Friday warned that rising costs from business rate hikes will be a “significant challenge” for the firm.

Draft House, which has nine London boozers including the Birdcage in Bethnal Green, estimates rent rises and new rates bills could add around £240,000 to its annual overheads from next year.

Founder Charlie McVeigh said: “The rates system is irrational and penalises pubs. It means we will not be expanding at a pace we originally wanted.”

He added that the pubs group was also having to factor in increases to the National Living Wage.

Losses at the business reached £32, 371 in the year to October 30, compared to a profit of £10,583 a year earlier. It said the opening of three new pubs contributed to the loss. But stripping out one off costs, underlying profit rose to £783,991 from £633,576.

Turnover jumped 27% to £7.8 million, helped by sales of Camden Pale Ale and burgers.

The company was founded in 2009.