Profits halved for Old English Inns

Pre-tax profits at Old English Inns halved during the year ending 1 April, down from £5.9m to £2.8m. The company is blaming the fuel crisis, foot-and-mouth, floods, and general bad weather for the drop.

Turnover for the period increased to £70.4m, compared with £69.5m for the previous year. Accomodation accounted for £15.5m and food and drink for £53.6m

Chairman Eric Walters described the results as "disappointing".

"First was the fuel crisis in September, which resulted in a considerable number of cancellations," he said.

"This was followed by some of the worst flooding in the country for over 20 years, which resulted in six of our businesses being closed for up to two weeks and a further two until the spring of this year."

Foot-and-mouth had a "major effect" on the company's results, he continued: "While the effect of this disease in now reducing, it has had a significant impact upon the many of the rural communities in which we trade. We estimate that up to 80 of our businesses in rural locations (more than 60% of the core estate) have been directly affected."

Old English Inns operates 139 outlets in total, of which 94 are inns with rooms. There are 1,914 bedrooms in total, with average revenue per available room (revpar) of £21.67, up from £19.12 in 2000. Overall occupancy for 2001 was 58%, and average room rate was £37.52.

During the year, Old English bought two new properties, the 40-bedroom Royal Hotel in Ross-on-Wye, Herefordshire, for £900,000 and the 40-bedroom Millers hotel in Sibson, Leicestershire, for £1.7m.

The company also identified 35 "non-core" pubs for disposal, of which the first 25 were sold by 1 April for £13m.

Walters said that despite the difficulties faced during the year, business for the coming months is looking more promising: "The current trading conditions remain challenging. But we are confident that, once the countryside and all associated amenities have been officially re-opened, the momentum we witnessed at the end of last year will return to the business.

"The reduced number of tourists this year is a concern but, at this time, it is very difficult to quantify the potential effect."