City Diary 16 July

St Austell sees 13% fall in profitability​

Cornish brewer and retailer St Austell has reported a drop in pre-tax profits to £7.4m in the year to 27 December 2008 compared to £8.5m the year before. Turnover rose for the year by £793,000 to £86.7m. The company said trading conditions, particularly at the year end, proved the toughest for decades and are unlikely to change in 2009.

"We experienced a second summer of appalling weather and our bad debts increased

significantly, affecting results at the year end. "Sales of our own draught beers rose 10% on 2007 and our packaged beers increased by 27%. Tribute sales were up 18% and now account for 68% of our total volume brewed. National sales contributed significantly to this increase with turnover up 32% on 2007."

The company has exited the keg bitter market, ending production of Duchy Bitter and Cornish Cream, but continues to keg Ratler Cider, which saw sales increase by 67% in 2008, for the Cornish Cyder Farm. The company acquired two pubs during the period - the Old Success at Sennen Cove near Lands End and the Castle Inn at Lydford on the edge of Dartmoor in Devon. It sold three sites - the George & Dragon, Bodmin, Victoria Bars, Newquay, and its Hayle depot. There was an £823,000 profit on the sale of the two pubs. St Austell said it hoped the weak pound and better weather than last summer would encourage greater numbers of people to holiday in the south-west.

£48m loss for Tattershall​

Tattershall Castle Group, the managed pub company owned by private equity firm Alchemy, received a further £15m in loans from its equity owner after its last financial year when it recorded a loss of £48.4m.

Turnover for the company, headed by David Ford, dropped to £105.3m in the year ended 31 August 2008 compared to £116.4m the year before.

Losses at TCG included an impairment charge of £27.5m. Tattershall restructured at the start of its current financial year, transferring 114 of its pubs to new legal entities covering distinct market segments - Bars, Inns, Pubs and Taverns.

TCG Acquisitions is left to run 36 of the original sites in the wake of the restructure.

The company said: "This new structure is proving operationally effective, with better management focus on each market segment. The operating loss from continuing operations for the year was £3.4m (2007: £1.8m).

During the year the company has benefited from the waiver by group companies of debt totalling £46.7m."

During its most recent financial year, the company completed the refurbishment of 17 sites and completed the planned disposal of six. The company had nine sites permanently closed after deciding it was uneconomic to trade them. TCG reported average weekly sales per site were £14,100 compared to £14,800 the year before. Rent to sales stood at 18.9% (17.7% in 2007) and Ebitda to sales before HQ costs stood at 5.8% (7.4% in 2007). It said it had taken steps to reduce costs and beef up operational management in the current year.

Whitbread puts work to tender​

Pub operator Whitbread is putting work out to tender on a job-by-job basis for the first time and has warned contractors to slash their margins, according to Construction News. The company has switched from awarding year-long fixed-priced deals to contractors to putting individual jobs into a tender process.

Whitbread construction director Alex Flach told CN: "We have some incumbent contractors who have done a great job for us. But the rest of the industry is desperate

for work. Those who do work for us will not be on the same rates and margins they were six months ago.

"In the current market, who knows what the going rate is and we have to test that. We are putting individual jobs out for tender, which we did not used to do."

Whitbread's £200m capital investment between March 2009 and March 2010 will see 40 Brewers Fayres and 30 Beefeaters refurbished and 10 existing Whitbread sites converted into Taybarns venues.

Strong trading by Britvic​

Britvic has unveiled "particularly strong trading" throughout its third and fourth quarter. The company has reported total revenues of £249.1m for the 12 weeks to 5 July 2009, an increase of 5.9% on the previous year.

For the full 40 weeks to 5 July 2009, total revenue increased by 6.1% to £732.3m. In the UK, Britvic materially outperformed in both the carbonates and stills markets. Britvic's strong brand presence in the betterperforming stills categories, notably Robinson's squash and Fruit Shoot has led the volume growth.