Pub consolidation hits profits for Brulines

Demand for Brulines beer dispense monitoring equipment has been hit by the rapid pace of pubs changing hands.

Comprehensive Business Services (CBS), which owns the systems, is carrying out a strategic review after a fall in profits.

However, it believes that orders have been deferred and will build again once the current string of acquisitions has settled down.

Chief executive Derrick Collin said: "In the short term, the continued consolidation and merger activity in the pub industry has resulted in a delay in some of our major customers' order patterns, and trading continues to be difficult."

Pre-tax profits for the year to March 31 were down by 18.7 per cent to £960,000, although sales were up by 2.7 per cent to £3.43m.

With the Brulines electronic draught information systems in over 4,000 pubs, penetration of the on-trade increased to seven per cent. Three operators now have it across their whole estates while another six pub groups are trialling it.

CBS was also affected by the cost of both strengthening the management team and restructuring the business to prepare it for expansion.

Chairman Bill McCosh, who is also chairman of Tom Cobleigh and was formerly head of Mansfield Brewery, joined last year after the departure of chairman Henry Edwards and his son, non-executive director Tony Edwards. Mr McCosh admitted current trading remained difficult, especially over the past six months when Whitbread, Bass and Scottish & Newcastle have been selling pubs.

He said: "We expect that in the future the company will be dependent on fewer but larger contracts with customers whose order requirements will vary. The pattern of orders will continue to be irregular and, for this reason, a business review has been implemented to establish the most appropriate business model for the company."

He said CBS had looked at a number of acquisitions but none had proved to be suitable for the company's future growth.