Investment Column: Yates needs wine weather

YATES BROTHERS, the fast-expanding chain of wine bars, is hoping for a fine summer and not too much distraction from the World Cup to help maintain its impressive progress. In the year to March, pre-tax profits rose by 30 per cent to pounds 13.6m, though this includes exceptional profits on disposals. Like-for-like sales actually rose 2 per cent in spite of price cuts aimed at attracting business. However, most of the growth comes from new outlets, up from 61 to 87 in the period.

Retail space grew by 40 per cent and the first of a new food and drink chain, dubbed the Ha Ha Bar & Canteen, opened in Bristol in February. A further 25 outlets are planned in the current year and the group remains on course to reach its ambitious target of 200 in four years' time.

Analysts expect profits of around pounds 15.5m for the current year, rising to pounds 19.5m by March 2000. That puts the shares, which slipped 16p to 542.5p yesterday, on a forward earnings multiple of 27, falling to 22. Demanding, but Yates deserves the rating.