Scott Waddington, chief executive of Welsh brewer and pub operator Brains, has described 2010 as a “year of consolidation” after major structural changes in the previous 12 months, including the sale of its freetrade business – as the company reported like-for-likes are up 7% in the first three months of this year.
Brains’ operating profit was up 50% on the previous year at £4.2m in the year to 30 September 2010, but that dramatic rise was also accounted for by the restructuring.
Waddington said Brains’ managed pubs delivered an additional £400,000 of food sales during the year.
He told Wales Online: “We were encouraged by our performance up until the end of June, but the combination of poor summer weather and the slower than expected recovery of the economy resulted in a slowdown in trading during the final quarter, leaving our year-end outcome slightly behind our target.
“However the investments that we have made in our brand, pubs and people have ensured that we have continued to perform at least in line with the market, with our managed house like-for-like sales comparing favourably with figures reported by other pub operators.
A 1.5% rise in managed house like-for-like sales during the 2010 financial year was driven mainly by a growth in food.
The company invested in 16 redevelopments, including the Pheasant near Bridgend, the Rose and Crown, Porthcawl, and the Duke of Wellington, Cardiff.
Waddington said: “Success at these sites has given us the confidence to further invest. Major 2011 projects include the Ty Mawr, the Heath and the Culverhouse, all in Cardiff, and the Boathouse in Bath.”
Waddington indicated that the tenanted portfolio of 140 pubs had been particularly badly hit by the squeeze on consumer spending triggered by a fall in disposable incomes.
“This year we will continue to invest in the estate and support tenants with various measures, including expertise to help them develop their food offers,” he said.
Brains premium bottled ale sales were up 12% on the previous year.
He said: “We have done well with a number of grocers, but we have the opportunity to grow distribution – particularly with Tesco outside of Wales. It is all about growing distribution in the right way.”
In the period since results, Waddington said that trading had been surprisingly good, apart from the hit at the end of 2010 caused by the spell of extremely cold weather.
He said: “In the current year the first quarter – up to Christmas – was better than we thought it was going to be, then we got hit by the snow, We got some of it back in January, because a lot of Christmas parties got cancelled but were re-booked. For the half year, like-for-likes to the end of March we are up 2.1%, and in the quarter our like-for-likes are up 7%
“I believe we have been at least holding our own in a difficult market, particularly when we have restructured, We have taken a conscious decision to grow the business moving forward and I think that decision is proving to be the right one. In the new financial year in particular we have continued to see good financial results compared to the wider market. I think that justifies what we are doing and the investment we are putting in.”
