Daniel Thwaites, the Lancashire brewer and pub operator, has reported a slight rise in pre-tax profit for the six months to 30 September 2011, during what it described as another “very challenging period” for the economy and the consumer. Pre-tax profit for the period rose from £4.4m in 2010 to £4.6m, while turnover increased 8% on the previous year to £70.9m. Operating profit climbed 3% to £7.6m. It said that trading across its 350-strong tenanted pub estate benefited from good weather in April and May and the extra bank holiday for Royal Wedding. The group completed 32 investment projects during the period at a cost of £1.3m, with a similar programme in place for the rest of the year. During the year the group disposed of eight bottom end pubs, at prices “broadly in line with net book value”. However, this generated a loss after disposal costs of £200,000. The proceeds from the sales were reinvested in the purchase of three “high-quality” pubs. Beer volumes declined by 4% over the six months in its core pub estate, but the group said this represented “a significant improvement” on declines experienced in recent years. Overall, operating profits for its beer division and its pubs increased by 2% to £5m on the back of a rise in volumes. Operating profits across its Shire Hotels and Thwaites Inns of Character division increased slightly to £3.1m (2010: £3m). The group said that the hotel market continued to “recover slowly from recession, with small increases in occupancy and food and beverage sales”. It said: “The residential conference market is still very fragile, and we have suffered significant food and utility price inflation, which has been difficult to recover." Net debt for the group increased to £45.8m (2010: £42.8m) on investments. It said that proceeds from the sale of its brewery site to Sainsbury’s would help to fund the construction of a new brewing facility. The search for a suitable site for a new brewery is underway and it anticipates that the move will take between three and four years. Chair Ann Yerburgh 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. “We have a strong balance sheet and the facilities to capitalise on acquisition opportunities as they become available. As I have said before we will continue to be selective in those and ensure that we wait to acquire high-quality assets which will create long term shareholder value.”