While like-for-like sales headed downwards, the group says there are signs the trend here is reversing.
Since the year end, Yates has adopted an aggressive pricing policy in the pursuit of market share. And despite the price campaign, margins are improving.
Meanwhile, Yates's development plans for its flagship wine lodges, Watling Street Inns and Ha! Ha! Bars & Canteens, are ahead of schedule. The group is to spend around pounds 45m this year on organic expansion. Peter Dickson, chairman, is also looking to acquire a chain of licensed premises to expand the Watling Street concept.
Analysts upgraded forecasts on yesterday's numbers. Morgan Stanley Dean Witter expects full year pre-tax profits of pounds 16.7m and earnings of 21.8p per share, putting the shares, up 10p yesterday, on a forward p/e ratio of 15.
For a leisure company, the rating is steep, but Yates has some of the best quality pub assets in the industry which are beginning to show their worth. The swing of the pendulum is heading upwards. Buy.Reuse content