W&D trading cheers pubs sector

Wolverhampton & Dudley Breweries, the Midlands-based pub company, defied the consumer slowdown yesterday with a 14 per cent rise in first-half profits and strong current trading.

Wolverhampton & Dudley Breweries, the Midlands-based pub company, defied the consumer slowdown yesterday with a 14 per cent rise in first-half profits and strong current trading.

Fears that the slowdown in consumer spending was spreading from retailers to pub and restaurant groups were sparked by a profits warning from Whitbread last month.

Ralph Findlay, the chief executive of Wolves, conceded: "The retail data would indicate that there is some kind of slowdown. The outlook is weaker than it was six months ago. Our own experience is that the community pub model is a very resilient model."

He said the company had performed consistently well through previous economic cycles.

Wolves became the third pubs group this week to brush aside fears that the market had been cooling off in recent months. Enterprise Inns and Mitchells & Butler, Britain's two biggest pubs groups, also gave upbeat trading updates while admitting that conditions were getting tougher.

Unveiling a 13.6 per cent rise to £36m in pre-tax profits for the 26 weeks to 2 April, Mr Findlay said trading over the Easter weekend and since the end of the first half had been good.

Like-for-like sales rose 3.1 per cent in the first half from a year ago at the group's 537 Pathfinder Pubs, which include its Pitcher and Piano chain. The 1,610-strong Union Pub Company division, which leases its venues to tenant landlords, saw sales growth of 3.2 per cent.

Volumes of the group's own-brewed beer increased 4.3 per cent, far outperforming the beer market, which was down by over 5 per cent. Premium beers, such as Marston's Pedigree and Old Empire ale, were 13.9 per cent ahead while standard ale, including the Banks's and Mansfield brands, did less well, rising a meagre 0.2 per cent.

Mr Findlay said the group was focused on increasing market share of its own brands, rather than acquiring other brands. The company hopes to benefit from a growing interest in speciality beer.

Last year the company hit the acquisition trail, first snapping up the 63-strong Wizard Inns estate and then Burtonwood Breweries with 460 pubs. Both purchases are now fully integrated.

Wolves announced yesterday that it had completed its £45m acquisition of Jennings Brothers, the Lake District ale producer. The deal brings the group 128 tenanted pubs, making it Britain's third-biggest pubs group with 2,275 venues.