SA Brain profit hit by slow economy

SA Brain, the Cardiff-based brewer and pub operator, has blamed the slow economic recovery for causing its results to fall behind target for the year to 25 September 2010.

Profit after tax, but before dividend was £1.5m, down from £6.4m in 2009, although the firm said the previous year's results benefited from the sale of its free-trade division to Heineken in 2009.

The company said its restructuring process after the sale caused turnover to fall £3.8m to £99.3m.

When free-trade sales are removed, turnover on a comparative basis rose by more than £8m (9%), according to accounts filed at Companies House.

Own-ale volumes fell 13%, against the company's estimate of a 10% decline across Wales as a whole, and 8.9% across Britain.

SA Brain cited "challenges in the free-trade sector and the smooth ale market in general".

The period also saw a cut in profit contribution from its managed and tenanted/leased pub divisions.

Managed pub like-for-like sales were up 1.5%, or around £400,000, with growth driven by food sales at 16 sites. The figure would have been 2% if trade hadn't dropped in the last quarter, Brains said.

Rental income in the tenanted/leased division, which was "particularly affected by the slowdown in consumer spending", fell by around 5% and tenants have been supported by a "range of measures, including increased discounts".

These factors, along with "significant investment in building repairs", caused a "sizeable reduction in contribution" from the division.

The firm is targeting flat volumes and profit improvement for the year.

Chief executive Scott Waddington said the company is "cautious" about trading in 2011, particularly in the first six months.

It will "continue to focus on controlling costs within the business," he added.