Turnover for the c80-strong firm dipped 1.1% to £7.3m.
Chairman Nicholas Tucker said heavy repair costs in the year, combined with additional costs directly linked to dealing with “a small number of problematic houses”, account for the reduced profitability. Operating profits fell from £1.4m to £1.2m in the year.
Despite this, the company saw gross margins and rental income hold up “extremely well”.
Tucker said that despite only applying to pub companies with more than 500 tied leaseholds and tenancies, it’s “inevitable” that the effects of the proposed statutory code for the pubco/tenant relationship “will be felt by all companies in the sector”.
“We have worked to our own voluntary code since December 2010, and have always taken great pride in the positive relationship that has always existed between the company and our tenants,” he said.
Tucker added: “The Government has also chosen not to act to remove the beer duty escalator about which I spoke at last year’s Annual General Meeting. As a result we can only anticipate further above-inflation duty increases.
“Despite the expectation that trading conditions will remain difficult, perhaps for years to come, the key to our future success will continue to be the result of the strong relationships between head office and our landlords and landladies.”