Thwaites begins pub trawl

BLACKBURN-based brewer Thwaites is on the acquisition trail after buying two pubs from The Watwerways Pub Partnership earlier this month.

Chairman Ann Yerburgh said that Thwaites was now “actively looking to make additional acquisitions” again after reducing its debt burden and refocussing its efforts on higher-value pubs.

Net debt reduced to £42.8m (£53.4m), and the firm said that it had sold off 16 pubs at “the bottom end of our pub estate” for their book value of £4m.

Operating profits at the family-run brewer, whose shares are listed on the PLUS market, increased by 7% in the first half of the year to September 30 despite a £10.8m drop in sales to £65.4m.

Yerburgh said that the reduction in sales was “an expected consequence of the decisions we made to sell the Stafford Hotel, transfer our managed houses to tenancies and to withdraw from some marginal third party brewing contracts”.

The sale of Stafford Hall generated £77m last year – £14.1m of which was booked as profit.

Thwaites said that trading in its pub estate remains challenging, with like-for-like beer sales down by around 9%.

“We are continuing to support the operators of our tenanted pubs to see them through this difficult period and are investing in our properties to raise standards
and support their offering,” said Yerburgh.

Volumes increased in its free trade business by 2% as a result of extra efforts made to develop the business. Overall profits for the brewery and pub estate were up 19.5% to £4.9m, which was partly due to lower utility costs.

Operating profits in the hotels business dropped by £1.1m to £3m, but last year’s figures included a £1.6m contribution from Stafford Hall. Thwaites said that profits on a like-for -like basis in the division increased by 20%.

“The hotel market has begun to see some recovery in discretionary corporate and consumer spending, which has resulted in improved occupancy rates, although room rates remain under pressure,” said Yerburgh.

The firm has maintained its interim divident payment of 1.1p.

Yerburgh said: “We remain extremely cautious about the trends for consumer spending as a result of the cumulative effect of duty increases in the past few years, the lingering effects of the recession and continuing uncertainty regarding the impact of the Government’s spending review and impending public sector cost cutting.”