Thwaites finds cheer in improved profits

FAMILY-owned brewer Daniel Thwaites said that it was beginning to see the benefits of a restructuring exercise undertaken in recent years as it announced a seven-fold increase in pre-tax profits to £7m.

Sales at the Blackburn-based company fell by 6.3% to £126.7m which the firm said was a consequence of a decision to sell its Stafford Hotel, to transfer some managed pubs to tenancies and to pull back from some “marginal third-party brewing contracts”. The stronger pre-tax figure was due partly to weaker comparatives in 2010, when a revaluation of its estate led to the firm incurring an exceptional charge of £18.2m.

However, chairman Anne Yerburgh hailed the growth in its underlying profitability, stating that like-for-like sales in its pub estate grew by 6.8% “as a result of investment in our pub estate, the growth of our beer brands in national pub groups and tight control of costs”.

Its Hotels and Inns division made an operating profit of £5.7m compared with £7.1m last year, although that included a £1.6m exceptional gain from the sale of the Stafford Hotel.

On a like-for-like basis, operating profits were up 3.6% which it said was due to higher occupancy rates and operational gains.

The company also said that it had managed to reduce its net debt from £48.8m to £40m, and that a final dividend payment of 3.36p, meaning that its total payout to shareholders during the year would be the same as last year’s £2.8m.

Yerburgh said this was a level which the board felt was “appropriate in these times of continuing economic uncertainty.”

The firm has also undergone a rebrand after taking “a long hard look at the way we are presented in the marketplace”.

“We have reviewed our corporate branding and made some changes to present a more consistent image,” she said. “This revised branding was launched in March 2011, and will be rolled out this coming year.”

She added that the company had continued to trade well during the first quarter of 2011, but remained cautious due to the impact of higher inflation rates and potential public sector job cuts.

“We have a low level of debt, with the funds to invest in our existing properties and to purchase additional pubs and inns as those opportunities arise,” she said.

“We are actively looking for opportunities but will continue to be careful where we invest.”