Burtonwood Breweries: Traditional pub fayres well

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The Independent Online

In an industry dominated by well-financed national groups, some might call Burtonwood Breweries, a Cheshire-based pubs chain, small beer.

Large groups such as Punch, Nomura and Pubmaster are carving up the pubs and bars market – with around 13,000 pubs between them.

But while the Rat & Parrots have clawed it out with the Slug and Lettuces and All Bar Ones, Burtonwood has been quietly carving out its own niche, focusing on traditional community pubs. Today, the company has 431 tenanted pubs and a further 41 managed pubs, covering an area from Leicester, via Blackpool, to North Wales.

Unlike many of its larger rivals, Burtonwood has stubbornly eschewed town centre pubs and bars – and the trend towards theme pubs. Its premises are the antithesis of flashy chain branded properties – with a focus on individual pubs, offering the company's own cask ale and a different guest ale every month.

Burtonwood's customers typically live within walking distance of their local – and the focus is very much on community.

"Other people think they invented community pubs but you have to develop them, you can't just build one," says Burtonwood's managing director, Lynne D'Arcy. "We don't have a have a prescribed formula. Pubs are different things to different people. We don't have a set offering."

It's an approach that has served Burtonwood well, helping the company to weather what has become a more competitive and cut-throat business.

But the company faces some formidable challenges, not least because leisure industry stocks are among the least sexy in the market, as Miss D'Arcy admits.

"The sector is not particularly popular at the moment," she says. "We were deserted in favour of dot coms. People tend to look at [companies with] much bigger market caps but we've got a good profit track record and good year on year growth."

In spite of the unfashionability of the wider sector in the City, Burtonwood has been bucking the market – with shares hitting an 11-year high of 207p earlier this week on the back of a solid set of results.

The company saw pre-tax profits rise from £6.3m to £7.2m – an increase of 14 per cent, on turnover of £46.7m.

Burtonwood attributes much of its success to focusing on the core business. Because it does not operate on the high street it avoids price wars with larger rivals.

"We're very good at community pubs with a heritage going back to 1867. We've never been trendy so we're not going to go out of fashion," says Miss D'Arcy.

It may not be trendy, but Burtonwood has heritage in spades. Founded by the Forshaw family, the company still has its headquarters on the site of the original brewery in Burtonwood.

The business initially developed a market selling to free houses and local landowners – and later expanded to develop its own estate of pubs.

At the turn of the century, Burtonwood was selling 60 barrels a week and, eager to expand, began supplying working men's clubs in the local area – before branching out further across Cheshire and Lancashire.

By 1939, the company had its own estate of 138 freehold and 96 leasehold pubs – adding a further 51 in 1945, with the purchase of the Caergwrle Brewery Company.

Burtonwood finally went public in 1964, just under 100 years after it was founded. Today, the Forshaw family retains a shareholding in the business – although Graeme Dutton-Forshaw retired in March after 17 years as chairman, with his cousin, Richard Gilchrist taking the hot seat.

But the changing face of the pub and leisure market has forced Burtonwood to adapt. "We've probably had more change in the last 10 years than we have in our entire history. We've had to change to survive," says Miss D'Arcy.

Over the past decade the company has sought to concentrate on the core pubs business as well as reducing its lower margin wholesaling operations.

To this end, Burtonwood has backed out of its hotels and off-license operations, as well as selling its share in the Haydock Park race course.

"We don't want to be busy fools. We're getting back to the profitable side of the business, we don't want turnover for turnover's sake," says Miss D'Arcy.

In 1998, Burtonwood took the radical step of rolling its brewing operations into a joint venture with Thomas Hardy Holdings – a business in which it has retained a 40 per cent stake.

Today, the firm is continuing with a refurbishment programme and is looking to expand. Burtonwood's management remains adamant that it will stick to operating "community pubs" building on the heritage of the last 134 years. But what else does the future hold?

"I think the industry will become more and more polarised between big players and niche players but hopefully there's room for everybody," says Miss D'Arcy. "The big chains can't afford to be as individual as we are."

Leisure may be in flux, but if Burtonwood retains its unique market position and continues to deliver strong results, it won't be calling time for a while.