Charles Wells sees profits bounce back

07 January 2011 by
Charles Wells sees profits bounce back

Charles Wells has seen its pre-tax profits bounce back to £9.3m for the year to September 2010, up from £3m in the previous year.

The company, which has 251 tenanted and leased pubs, also indicated that EBITDA (earnings before interest, depreciation and amortisation) per pub had risen 15% following a £25m investment in 2009. Twelve pubs were sold and four were reopened following refurbishment.

In Wells and Young's Brewing Company, EBITDA - before exceptional costs - stayed at £11m, with total beer sales up 0.8% in a declining market. But the results do not include the departure of Corona Extra, which the company brewed under licence, from December 2010.

Meanwhile, the company's John Bull managed pubs in France, which now number seven sites, saw sales rise 19%.

Chief executive Paul Wells said: "We spent the year integrating the 31 pubs which we purchased in 2009, and we reopened four refurbished pubs. This led to the EBITDA per pub increasing by 15%, which reflects the steady improvements in the quality of the estate.

"We launched two new beers to the UK market - Young's London Gold, which is the third permanent Young's beer, and Mongoose Premium Beer, a beer primarily for the Indian restaurant market and one which reflects our expertise at brewing Indian beers. We also signed a distribution agreement with the Spanish brewer Grupo Damm to import, market and distribute their flagship Estrella Damm premium lager.

"Wells and Young's focus is of course cask beer, and this year has seen national advertising and significant marketing investment across our core range of cask beers Bombardier, Young's, Courage and Eagle.

"Further afield, both Wells and Young's export division and the John Bull Pub Company contributed well to group profit. Export grew by 3.3% and although we are continuing our focus in established markets such as Canada and France, we are also seeing promising growth in developing markets such as Sweden and Russia. The John Bull Pub Company, the group of pubs in France, opened its seventh site and reverted all the French sites to managed pubs.

"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.

"The duty escalator is still a major concern for the industry and with the VAT increase to 20% now in place there are significant increased pressures on the Great British pub. Last year I urged the chancellor to realise the vital role played by pubs in their local economies - and I do the same this year. 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."

Charles Wells acquires nine Punch Taverns pubs >>

Charles Wells buys 17 tenanted pubs from Punch >>

Charles Wells appoints operations director >>

Charles Wells provides further support for licensees >>

By Neil Gerrard

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