Charles Wells profit dips but international sales soar

By John Harrington , 18-Dec-2012

Related topics: Company & City News

Charles Wells, the brewer and pub operator, has reported a 10% fall in pre-tax profit to £6m in the year to 29 September as the impact of losing income from beer brands Red Stripe and Corona was felt.

The company – which also announced the appointment of group finance director Justin Phillimore as MD of Wells & Young’s Brewing Company and Andrea Holton of DHL as its new HR director – saw income rise £1m to £189m with EBITDA up 4% to £17.4m.

Its pub arm Charles Wells Pub Company sold 22 pubs in the period and bought four. Turnover dropped 4.9% but the higher quality of the estate meant EBITDA per pub grew 3.8% and like-for-like sales increased 1.2%.

Charles Wells said the four new sites were integrated with “minimum disruption” as all four licensees ran other Charles Wells pubs.

EBITDA in its John Bull managed pub arm in France is close to Euro1m. Operating profits in the division grew 38%. An eighth pub – the King Arthur in Lyon – was acquired and the company said it “remains on target to achieve an estate of 16 pubs by 2016”.

The period was the first in which the company had no benefits of its previous contacts for Red Stripe and Corona. The firm said it mitigated the decline with the acquisition of the McEwan’s and Younger’s brands in October 2011.

“The brewing company now owns 80% of its brands, as opposed to 2005 when the portfolio consisted of 80% licensed brands, and grew owned beers by 2.1% in the financial year,” the company said. “International sales recorded another year of double-digit sales growth and an increased margin growth, up 27.7% on the year.”

Sales at Charles Wells’ wine company, Cockburn & Campbell, grew 6%, with wine volume rising 2.8%, which it said was in an on-trade market declining 5%.

Paul Wells, chairman of Charles Wells, said: “Our performance this year has been in line with expectations and we have invested for the future through acquisition of beer brands and high quality pubs in the UK and France.

“Our international sales and pub operations have demonstrated that growth is possible at home and overseas, despite the difficulties of the global economy and our wine company has also delivered excellent growth.

“It’s good to see that so many licensees who run a Charles Wells brewery pub are outperforming the market and within our core estate we have seen some exceptional achievements. Our support packages have helped us to attract some of the highest calibre licensees and help them be successful in their pub and this has contributed to lifting the average length of tenure over six years.”

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