Grosvenor builds on profits after payoffs

GROSVENOR Inns, the Slug & Lettuce independent pub and wine bar operator, increased pre- tax profits by 12 per cent to pounds 854,000 in the year to 31 May, after a pounds 159,000 exceptional charge to cover compensation for loss of office to two former directors, writes Terence Wilkinson.

Grosvenor's shares rose by 10p to 148p.

Operating profits from continuing operations rose by 37 per cent to pounds 1.1m on a 12 per cent gain in sales to pounds 9.1m and there was a pounds 128,000 contribution from acquisitions.

In February, Grosvenor launched a pounds 5.2m rights issue to buy four pubs in Essex and Hertfordshire from C H Webster and two loss-making Hedgehog pubs in Hove and Southampton from David Bruce, formerly of Bruce's Brewery and a director of Grosvenor since last October.

Tim Thwaites, chairman, said trading was stronger than a year ago, particularly in food, but most acquisitions and redevelopments were too late to influence last year's results. A substantial improvement is expected this year.

Due to extra shares in issue, earnings per share showed no change at 7.4p but they rose from 7.4p to 8.5p before compensation costs paid to Peter Whitehead, a founder director, and Bob Edmunds.

With a final of 2.5p against 2.25p the total dividend goes up by 12 per cent from 4.25p to 4.75p.