Greenalls defies hotel downturn

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The Independent Online
GREENALLS has resisted the depression afflicting the hotel, restaurant and brewing industries, bringing in profits minutely ahead of last year's, against the expectations of a number of City analysts.

Group pre-tax profits rose by pounds 300,000 to pounds 64.4m in the year to 30 September. Operating profits from pubs, which contribute 70 per cent of group earnings, rose by 6.1 per cent to pounds 47.5m.

Greenalls spent pounds 10m buying 39 pubs from Allied-Lyons, pursuing its goal of becoming a national leisure group, not a regional brewer. Beer volumes continued to fall, but turnover of food sold in pubs was up by 10 per cent.

The deal with Allied-Lyons extended its estate beyond the north of England and the Midlands to the northern Home Counties.

Improving facilities at Premier House, the catering inns and restaurants firm, cost pounds 16m. Andrew Thomas, chairman and chief executive, said like-for-like sales at Miller's Kitchen, one of Premier House's most important businesses, were up 15 per cent. Room rates had held at pounds 26.

A 33.5 per cent rise to pounds 4.5m in operating profits from off-licences included eight months' contribution from the 187 Blayneys shops bought in last year. Mr Thomas said turnover would be flat if stripped of that acquisition.

This year's Ryder Cup golf tournament, to be held at the Belfry, may boost De Vere, the luxury hotels business, where room rates fell by 7.6 per cent and operating profit by 8 per cent. 'We're prepared to cut the room rate at, say, the Belfry on a Sunday night,' Mr Thomas said. 'The guest will buy dinner, drinks and he may even buy a load of golf sweaters from the shop.'

Fully diluted earnings per share were 28.2p, up by 7.6 per cent. The 11.8p dividend was up by 7 per cent. Year-end borrowings were pounds 209m. They fell to pounds 123m after the rights issue. Pro forma gearing is 14.5 per cent. A reduction in the value of the group's six US hotels, which are up for sale, led to a pounds 14.9m extraordinary charge.

The shares rose 5p to 359p before slipping to 346p at the close.