UK: The Wolverhampton & Dudley Breweries’ sales has been ahead of last year
The Wolverhampton & Dudley Breweries, Plc ('W&DB') announced on September 28 that its trading over the summer period has been satisfactory and ahead of last year, notwithstanding the benefit of Euro 2004 in the comparable trading period. In the 51 weeks ended 24 September 2005, total like-for-like sales in Pathfinder Pubs were 2.8% ahead of last year. Like-for-like sales in The Union Pub Company were 2.8% ahead of last year for the same period. In W&DB Brands, brewed beer volumes increased by 5.2% (excluding non-owned brands), including a 14.8% increase in premium ale.
Across the Group, margins are ahead of last year despite significant cost increases, and the results for the year as a whole are anticipated to be in line with our expectations.
Acquisitions
The integrations of Burtonwood (acquired January 2005) and Jennings (acquired May 2005) were completed as planned, and the trading contributions from these acquisitions have met our expectations. As previously stated, anticipated synergies of £3.0 million per year from Burtonwood have been increased to at least £3.5 million per year. The targeted synergies of £2.0 million per year from Jennings will be slightly exceeded.
“We announced that our offer for English Country Inns became unconditional on 15 September 2005, and the integration of the 14 managed pubs is underway.”
Outlook
W&DB said: “The regulatory and cost issues affecting our industry have been challenging, and remain so. In the coming financial year, staff costs will increase by some £2 million as a consequence of the higher minimum wage, and we expect energy costs to rise by over £5 million as a result of energy prices, which are at least 50% ahead of last year. Additionally, a more challenging consumer environment is widely reported.
We aim to continue to offset rising costs by improving productivity, demonstrating the strength of our business model and the benefits of operational flexibility. This includes the potential to transfer smaller managed houses to tenancy, with 19 pubs currently being transferred to The Union Pub Company from Pathfinder Pubs.
We have a strong balance sheet and relatively conservative gearing which enables us to consider acquisition opportunities as they arise in a consolidating sector. The Preliminary Results for the year ending 1 October 2005 will be announced on 2 December 2005.
Commenting, Ralph Findlay, Chief Executive, said: ‘The growth of the business is being driven by a combination of organic development and the successful integration of recent acquisitions. Our focus on good quality freehold community pubs, high retail standards and popular beer brands places us in a good position to benefit from the changes that are taking place in the industry’.
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