SA pubs owner gears up for growth and ASX ambitions
With a $35 million capital raise on the cards, one of South Australia’s most prominent hospitality players is looking to go public and grow its 26-venue-strong portfolio further.
A planned $35 million-plus capital raise will support Duxton Pub’s ambitions to become an ASX-listed hospitality company, placing the SA-based firm before a national investor base.
The company confirmed to InDaily that it is targeting the second half of 2025 for an initial public offering (IPO), which would support the growth ambitions Duxton Pubs’ new CEO Mark Condi has set for the firm.
Established in 2021, Duxton Pubs – based at Stirling – owns 26 pubs and hotels exclusively in South Australia. In the Adelaide metro area these range from Norwood’s The Alma, The Lion Hotel in North Adelaide, and Little Bang Brewery at Stepney.
Outside of the city, the company operates the Port Broughton Hotel, the Woolshed Inn at Bordertown, the Swanport Hotel at Murray Bridge and more.
Duxton Pubs said it has raised about $70 million in capital to date, and its portfolio of assets is worth $230 million.
Some venues are set for upgrades as part of Condi’s plans, but the major rationale for the IPO is to buy more pubs.
“We’re wholly and solely at the moment based in South Australia, which means that we get the leverage of management. We believe that our point of difference is that we’ve got a really good management structure that can manage venues in South Australia really well,” Condi told InDaily.
“You can imagine some of these other bigger groups that are scattered all over Australia – the resources that are required are quite intensive, so it’s a good opportunity to raise money and continue to acquire and improve a lot of our existing assets.”
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Duxton Pubs is currently an unlisted hospitality fund run by SA businessman Ed Peter – the former head of Deutsche Asset Management and chairman of Duxton which also owns vineyards, farms and water rights.
Peter’s other firms – Duxton Farms and Duxton Water – are both ASX-listed companies. Both companies are among South Australia’s Top 100 on the 2024 South Australian Business Index, with Farms coming in at number 63, and Water at 42.
Condi – the former chief executive of Bankstown Sports Group – was appointed Duxton Pubs CEO earlier this year, replacing Peter’s wife Joanna Chronis who was running the firm on an acting basis following publican Brett Matthew’s September 2023 resignation from the company.
An ASX listing would mean national attention for Duxton Pubs but Condi said his focus remained South Australian.
However, he wouldn’t rule out an interstate purchase in the future if it made sense for Duxton Pubs.
“At the moment we’re pretty much focused on South Australia, but in saying that if a group of pubs came up that was available interstate we’d look at it,” Condi said.
“If we got an opportunity to buy a pub in Forbes, there’s probably no value there for us, because to manage that from here is quite difficult. But if there was a group of pubs that became available that had existing structures, then we would certainly look at it, and it’d be up to our investment team to look at the numbers and make sure it would add value.”
Asked why east coast investors would consider throwing funds behind a purely South Australian hospitality play, Condi said the appetite for businesses in the state is rising thanks to a more positive perception the state has developed.
“I’ve come from New South Wales – 35 years in New South Wales – and I’ve been to Adelaide a number of times for conferencing, and this is the first time that I’ve actually lived here,” he said.
“I think South Australia is a jewel. Certainly, you pick up the papers on a daily basis and see the investment that’s happening in South Australia.
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“There’s value in South Australia and value in the hospitality business, so I think we’ll get a lot of interest and that will continue to grow.”
Venues set for further upgrades
Duxton Pubs acquired the Cremorne Hotel on Unley Road in 2021 and splashed cash on giving it an updated look and feel.
Now, the firm is going to build a cocktail bar upstairs called 1854 – named after the year the pub was first opened. The new offering is set to open at the end of November.
“From what it was to what it is now, it’s a pretty special venue,” Condi said.
“We have some space upstairs and we’re not spending a huge amount of money but this space is not utilised and the venue managers are really engaged at that site.”
A cocktail bar upstairs at the Cremorne Hotel will be named after the year the pub was founded: 1854. Photo: Supplied.
The Port Broughton Hotel is another Duxton Pubs site that’ll enjoy some new amenities.
Condi said the “amazing venue right on the water” benefits from peak season crowds, so Duxton Pubs will station a food truck at the site through summer.
“We’ve also purchased a shipping container that will be permanently located there,” Condi said.
“It allows us to open it up at peak times – long weekends and that peak season – and it becomes a bar and we can just shut it down in the off-season.
“It allows us to meet the needs of a very busy community for those two months.”
The CEO is optimistic about the group’s future, acknowledging that the hospitality sector is in a rough patch, dealing with rising costs and lower consumer spending.
“We feel them, there’s no doubt. I think everyone feels them, whether it’s power, wages, all those sorts of things, an imbalance with people spending a bit less. Food is generally the same but people are probably buying slightly less alcohol,” Condi said.
“But we have the benefit of trying to get efficiencies across the group, so we can negotiate quite well.
“We’re currently looking at renegotiating our power – hopefully, that will provide us savings across the group. That’s a competitive advantage, where a pub out in Whyalla for example might have to negotiate that power individually, whereas what we can do is put it on the group and negotiate it – hopefully – better.”
