Cains reports £2.8m loss after Honeycombe takeover

By Ewan Turney

- Last updated on GMT

Related tags: Smoking ban, Consumer confidence, Time, Term

Cains reports £2.8m loss after Honeycombe takeover
Cains has reported a £2.8m loss for the fourteen months to 28 October 2007 following its reverse takeover of Honeycombe Leisure. The loss was in...

Cains has reported a £2.8m loss for the fourteen months to 28 October 2007 following its reverse takeover of Honeycombe Leisure.

The loss was in line with expectations but the Liverpool based brewer and operator warned the smoking ban and reduced levels of consumer confidence will have a "significant"​ impact on business in the short term.

It completed the acquisition of 92 pubs from Honeycombe Leisure, including 25 freeholds and 67 leaseholds, in June last year.

"The acquired Honeycombe business had a recent history of loss making and during the initial post acquisition period we have been concerned with taking greater control of the business and establishing tighter controls upon which to build a successful operation for the long term,"​ said chairman Roy Morris.

"It is inevitable that it is going to take time to turn the pub business around."

Retail sales on a like-for-like basis at its 109 pubs were down 11% with drink sales down 11.5% and food down 7.6%.

"Contributing factors to this downturn include the introduction in July of the smoking ban, the poor summer weather and a fall in consumer confidence,"​ he said.

"This compares with 2006, which benefited from the football World Cup and excellent summer weather."

However, total brewing sales increased by 7% on an annual like-for-like basis.

The brands division increased by 1%, the contracts division increased by 7.4% with retailing falling by 1.8%.

Sudarghara Dusanj (pictured​), Cains Beer Company chief executive, added: "We remain cautious about the outlook for 2008 and are aware that the smoking ban and reduced levels of consumer confidence is going to have a significant impact in the short term to the business.

"However we are confident that a non-smoking environment will, in the medium and long term, result in growth in both bar and food sales."

Related topics: Other operators

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