Summer wash-out hits Thwaites’ profits

BREWER and pub operator Daniel Thwaites said the wettest summer for 100 years hit sales at its premises as it reported a fall in half year profits.

The Blackburn-based group reported flat sales for the six months to September 30 of £71.1m (2011: £70.9m) in what chair Ann Yerburgh said had been a “very challenging period”. Pre-tax profits fell from £4.6m to £3.7m.

The historic brewer, which as well as pubs as a small hotels business, said it was cutting jobs at its Blackburn base, and had ear-marked £400,000 for restructuring  costs as 16 jobs, including four compulsory redundancies were made.

Mrs Yerburgh said: “Our performance has been adversely impacted by the very wet weather conditions which have had a significant effect on our summer trading.

“We continue to act decisively in response to the current market conditions and we are committed to creating a prosperous and sustainable business for the future.”

She said the company’s planned relocation to a new brewery had dented contract volumes, which had forced the cost cutting exercise. The group said it had paid £9m to settle £40m in interest rate swap contracts, which had reduced  borrowing costs.

The settlement of the swaps and the share buyback has resulted in net debt increasing to £62.7m from  £45.8m last year.

Thwaitess said operating profit in its the Beer Co and Pubs had falledn 20% to £4m in the first half.

Mrs Yerburgh said: “The continued poor weather has particularly impacted on seasonal pubs in rural and seaside locations, and free trade supply to sporting clubs, as many cricket, golf and other sporting fixtures have been cancelled.”

Despite the challenging trading conditions the company invested £600,000 in 19 pub refurbishments , while it bought three good quality tenanted pubs and have sold seven pubs from “bottom end” of its estate.

Operating profit in the Hotels and Inns division was unchaned at £3.1m.  The group invested £2.3m in the first half of the year on revamping facilities of its premises.

Looking ahead Mrs Yerburgh said: “We continue to work with Sainsbury’s and Blackburn with Darwen Council to plan for the development of our existing Brewery site and are carrying out feasibility studies on potential new sites.

“We remain positive about our medium term prospects and are taking actions to underpin them in the second half of the year.”