Slug slows down despite record year

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The Independent Online
UNEXPECTED costs of two pub openings and difficult trading last year forced pubs operator Slug and Lettuce to slow its expansion programme, the company said yesterday.

Opening bars at Bristol and Winchester had cost more than expected, the group said, while its northern pubs had incurred first-half losses.

This, together with a sales droop due to the football World Cup and poor weather last summer, saw the group pull out of a number of sites, cutting planned numbers from nine to six. It is now setting stringent criteria for new bars and plans to open four or five this year, mainly in the South, with some in the North, Scotland and Wales.

But the group, which operates 30 Slug and Lettuce pubs, said overall the year had been a record, with excellent second-half trading.

This helped to push pre-tax profits in the year to 31 May to pounds 2m, up from pounds 757,000 in the previous period. Turnover was pounds 26.4m, up from pounds 22.7m.

Tim Thwaites, the chairman, who is to retire this year, said: "I believe this year has demonstrated the strength of the Slug and Lettuce concept. "Despite a slow start, the business recovered well and has gone on to produce the highest returns the group has ever recorded."

Its northern bars in Leeds, Nottingham, Manchester, York and Harrogate had done particularly well, pulling into the black in the second half, helped by a late licence at the Manchester site.

The group's first venture into Scotland saw success in Glasgow, and plans are in preparation for expansion in Scotland.

Food saw an overhaul, with shorter menus and brunch and snacks piloted, helping sales in the area rise by 53 per cent.

The company said this year had begun well, with comparable sales up by 10.4 per cent in June and July.

The group will maintain its final dividend of 3.35p, making a total dividend of 6.375p.