Jennings profits climb 13.5 per cent thanks to Lakeland pubs estate

Jennings Brothers, the 175-year-old Lakeland pub owner and brewer of Cumberland Ale, yesterday proved that pubs are still popular despite a glut of profits warnings in the sector.

Jennings Brothers, the 175-year-old Lakeland pub owner and brewer of Cumberland Ale, yesterday proved that pubs are still popular despite a glut of profits warnings in the sector.

Mike Clayton, the managing director of the AIM-listed brewer, yesterday gave thanks to his decision to get rid of Jennings' estate of managed pubs in 2002. Its 126 remaining pubs are leased and tenanted, where individual landlords run the business, thereby reducing operating costs for the group.

"If we had not done what we had done, we would not have been immune from the gloom that is affecting others, particularly in the high street. We did not have the critical mass to make managing pubs a success," he said, adding that Jennings was also benefiting from its rural locations in the North of England.

Eldridge Pope, JD Wetherspoon and Regent Inns, which operate managed pubs on the high street, all issued profits warnings last week amid fierce competition and price-cutting to win town-centre trade.

Jennings, which is based in Cockermouth, Cumbria, yesterday said full-year profits rose 13.5 per cent, with turnover up 14.7 per cent to £11m. Its pubs business accounts for 64 per cent of the company, and operating profits per pub have increased 9 per cent on a like-for-like basis.

The companysaid its brewing business is also growing, with volumes of its local ales up 7.5 per cent. Volumes of its main brand, Cumberland Ale, were up 24 per cent despite a declining market for traditional ales.

Mr Clayton predicted further consolidation in the pubs sector, but said Jennings' success would ward off potential buyers. It has been seen as a takeover target because of its small, regional position.

Shares in the company yesterday rose nearly 4 per cent to 252.5p as investors took heart from its first full results, after deciding to focus on leased and tenanted pubs.