W&D `confident' that court will let it buy Mansfield

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The Independent Online
WOLVERHAMPTON & DUDLEY, the country's largest regional brewer, yesterday posted full-year profits up 11.6 per cent and said it remained confident about the outcome of a forthcoming court case concerning its proposed pounds 253m acquisition of Mansfield Brewery.

W&D's agreed bid for Mansfield has been complicated by arguments over whether Mansfield's share-owning trusts have the right to sell their stakes. A High Court hearing to resolve the matter is due to take place in the week beginning 13 December. A spokesman for W&D said: "We would not have gone this far down the line unless we were confident that we would win."

The company's pre-tax, pre-exceptional profit for the year to 2 October was pounds 50.2m. Turnover was up 35 per cent at pounds 415.5m. David Thompson, W&D managing director, said the improvements were due to lowercosts and a drive to increase like-for-like sales. He said: "This is a mature industry and one where there are substantial costs, and we've been taking them out." He added that the integration of Marston, Thompson & Evershed, the regional brewer, which W&D acquired earlier this year, had "exceeded our expectations". Cost savings from the deal areexpected to reach pounds 20m, pounds 3m more than was projected. The Mansfield takeover would yield a further pounds 12m of savings. W&D's like-for-like managed pub sales were up 3 per cent in October and November.

But the company also warned that maintaining margins would be difficult in an unfavourable retailing environment. David Miller, W&D's chairman, said:"Government regulation has added costs through the working time directive, the national minimum wage, and through high business rates."

W&D also announced yesterday its intention to sell 284 mainly tenanted pubs to KUC, owned by Royal Bank of Scotland. The disposal will raise pounds 40m and W&D will use the proceeds to reduce its borrowings.

W&D shares yesterday closed up 26.5p at 566.5p. The group will pay a final dividend of 22.64p a share, up 10.2 per cent from the previous year.