Older format pubs dent Yates's profits

The pubs group Yates told a tale of two halves yesterday with sharply contrasting performances in different parts of the estate in the six months to September.

While the refurbished outlets grew sales by 1.7 per cent and the Ha!Ha! brand was ahead 6 per cent on a like-for-like basis, the old unimproved outlets slumped 16.9 per cent.

Comparable sales for the whole group slipped 5 per cent and are running 4.4 per cent down in the early stages of the second half.

Yates has refurbished 80 of the 130 sites and Mark Jones, the chief executive, said a further 20 would be transformed from faux Victoriana to 21st century formats by the year end. He said each makeover cost between £180,000 and £200,000, including £40,000 worth of media equipment, and involved closing the outlets for at least a week. Mr Jones intends to sell 11 poorly performing outlets unsuitable for treatment. He has negotiated the sale of five already.

Turnover was down from £77m to £74.9m in the 26 weeks to 28 September and pre-tax profits, excluding £5.9m worth of exceptionals on disposals, slipped from £4.7m to £4.6m. Simon Larkin, a leisure analyst at its house broker ABN Amro, cut his full-year profit forecast from £10.3m to £9.7m. He said: "There is certainly no sign that the level of the competition on the high street is diminishing."

The shares slipped 2.5p to 100p. Although they have doubled on bid speculation since April, the rally ran out of steam at 117p in August.