Profits boost for Charles Wells
Bedford-based Charles Wells has reported annual operating profits up nearly eight per cent for 2010, the last full year the group benefitted from its Corona Extra distribution contract before losing the agreement to brewing giant Molson Coors.
Charles Wells said total turnover the year to September 2010 grew 1.7 per cent to £231m, with operating profits up 7.9 per cent at £11m.
The group's pub estate, comprising 251 tenanted sites, saw earnings before interest, tax, depreciation and amortisation (EBITDA) up 15 per cent. The estate benefitted from a £25m investment programme rolled out during 2009.
Wells & Young's Brewing Company (W&YBC), the group's brewing joint venture with London pub operator Young & Co, saw EBITDA level at £11m, with total beer sales reported to be up 0.8 per cent.
In France, Charles Wells' seven managed pubs saw sales up 19 per cent.
Group profits before tax came in at £9.3m, versus £3m the previous year which saw a write-down of its distribution centre.
Paul Wells, Charles Wells' chief executive, said 2010 had seen the group integrate 31 pubs acquired the previous year and the opening of four refurbished sites. This, he said, helped push up EBITDA per pub by 15 per cent.
"We have delivered these improved profits despite a year of challenges from the economy and a declining beer market. An operating profit of £11m is a strong performance and is a reflection of everyone's hard work," he said.
"These are the last results with a full year of contribution from Corona Extra. We are proud to have built this brand from 50,000 cases in 1995 to a peak of five million," Wells said.
In addition to losing the Corona deal, the group also witnessed the end of its 30 year-long relationship with Red Stripe, which it both brewed and distributed. The brand is now controlled by Diageo.
Wells said W&YBC had launched two new beers to the UK market during 2010: Young's London Gold, the third permanent Young's beer, and Mongoose Premium Beer, aimed primarily at the Indian restaurant market.
"We also signed a distribution agreement with the Spanish brewer Grupo Damm to import, market and distribute their flagship Estrella Damm premium lager," he added.
The brewery boss said he hoped Chancellor of the Exchequer George Osborne would be mindful of the role pubs play in their local economies and go easy on the industry in the forthcoming Budget.
"Pubs can only take so much, and we are in danger of losing hundreds of great pubs because of the tax burden placed on them. Pubs are at the absolute heart of their communities and part of the fabric of UK society," he said.
