Pubs 'n' Bars says smoke ban preparations in place

Pubs 'n' Bars, which recently bought out Community Taverns and now operates 98 pubs, has announced its results for 2006.

Operating profit was up 11.4% to £2,330,127 and pre-tax profit for the year was £1,068,113 up from £1,094,387 in 2005.

A statement issued this morning read: "During the year we sold two pubs and examined a large number of possible acquisitions, most of which did not fit our criteria. "However, since the year-end we have completed the purchase of Moorgate London Limited, which has an estate of seven freehold pubs leased to individual operators, for a total consideration of £6,639,500 including the assumption of £4.3 million of bank indebtedness.

"We have now also completed the acquisition of Community Taverns Limited for a cash consideration of £2,450,000 to be satisfied by bank borrowings.

"Community Taverns was formed in 2003 as a joint venture between Bank of Scotland Integrated Finance and Pubs 'n' Bars.

"We invested £750,000 and became a 15% shareholder whilst managing the 25 pub estate for an annual fee of £480,000.

"The acquisition of the Community estate which comprises one freehold and 24 leasehold pubs will safeguard the annual management revenue of £480,000 and contribute positively to group revenues."

The group said it is ready for the smoking ban with only nine of its pubs not having a new smoking shelter - however its preparations have come at a cost.

The statement read: "As is well known, the ban on smoking in pubs will take effect from 1 July and there is little doubt that, initially, we and our competitors will be badly affected by loss of both bar sales and machine income. To alleviate the situation we have initiated a programme of creating attractive covered areas with lights and heaters outside every pub in the estate where space is available. "So far, we have installed 30 smoking areas and will have completed our installation programme in good time for the start of the smoking ban.

"We will only have 9 pubs without a dedicated outside smoking area.

"The cost, however, has not been insignificant and we estimate that we will spend a total of £300,000 on the shelters and ancillary equipment. As this expenditure may be considered freehold and leasehold improvement we have arranged suitable bank finance. Hopefully, in the longer term, the ban may help improve pub attendances by encouraging non-smokers and their families to visit pubs."