Thwaites serves up higher first half profits

DANIEL Thwaites, the Lancashire brewer and hotel and pubs operator has defied the tough consumer market to post higher half year sales and profits.

The Blackburn-based group said the results for the six months to the end of September were “encouraging” given the “very challenging” economic backdrop.

Turnover rose 8% to £70.9m and operating profits by 3% to £7.6m.

Chairman Ann Yerburgh said Thwaites has continued to invest in its pubs with £1.3m spent at 32 sites in the half year and a similar sum ear-marked for the next six months.

Eight pubs from the “bottom end” of its estate were sold, with the proceeds reinvested in the purchase of three “high quality” pubs.

Thwaites announed in July it is planning to move to a new brewery in Blackburn, and had agreed an outline deal with grocer Sainsbury’s for it to buy the existing Star Brewery site.

Mrs Yerburgh said the project is expected to take between three and four years to complete.

Looking ahead she said: “We are pleased with the progress we have made over the last six months, but we have certainly felt the impact of relentless duty increases, the burden of regulation to our pubs, high cost inflation and government  spending cuts, particularly in the North West.

“We remain cautious about the on-going impact of these on our business.”

Thwaites, which is listed on the PLUS market said its free trade business,  Thwaites Beer Co, had made a good start to the year, and that sales of its brands are continuing to grow in national pub groups, particularly the Wainwright beer, where volumes increased by 8% in the period.

The company’s pubs benefitted from the good weather in April and May and the extra bank holiday for the Royal Wedding. Overall, operating profits for Thwaites Beer Co. and Thwaites Pubs increased by 2% to £5m.

Operating profits in Shire Hotels & Spas and Thwaites Inns of
Character also crept up, from £3m to £3.1m, with the hotel market seeing only small increases in occupancy and food and beverage sales, while the  residential conference market is still “very fragile”, Mrs Yerburgh said.

The interim dividend was pegged at 1.1p per share.