Sarumdale, the south east-based multiple pub operator, has begun scaling back its estate after reporting a dip in profit for the year to 31 March 2011. The firm has surrendered its four Punch leasehold pubs and one freehold since May following a review of its sites, said managing director Rodney Hall. It leaves Sarumdale with 15 pubs; 14 freeholds and one lease with Wellington Pub Company. Another two freeholds have also been placed on the market. Full-year profit for the company fell 6.5% to £26,363, although profit before tax was up 43.1% to £85,688 and operating profit increased 7.7% to £577,700. Turnover fell 3.5% to £5.976m. Hall said the company chose to surrender its four Punch pubs after rents became “totally uneconomic” after a changes in demographics in east London, where the sites are based. He said the pubs’ traditional customer base of workers had moved away with the development of the Olympics site. Sarumdale has no core number of sites in mind as it scales back its estate, said Hall. “It’s a question of the quality [of the pubs] and we are reviewing that constantly.” Sarumdale said it was “satisfied” with the results “against a backdrop of difficult trading conditions generally and, in particular, the continuing introduction of further bureaucratic burdens and red tape”. Hall highlighted two particular bugbears with the current tax and regulatory regime. Firstly, the “substantial uplifts” in business rates that were calculated before the economic downturn, along with delays in securing rate relief. And secondly, employment regulations that he said means the company can’t dismiss staff who take long-term sick leave as soon as they secure their job. “It’s very much stacked against the employer,” Hall said. Sarumdale said a review of the capital allowances available to the group had been carried out that “will result in a reduction of future years’ corporation tax payments”. The firm reduced its debt by £425,322 in the year, leaving net debt at 31 March of £7,475,835.