Rising profits cannot satisfy Eldridge Pope

Pub company Eldridge Pope last week said that it was disappointed with its profits - even though they went up - and would take a "careful" look at costs in 2003.

In the 12 months to 30 September, the group recorded a 4.5% increase in turnover to £69.6m, compared with £66.6m in 2001. Pre-tax profit rose by 3.3% to £6.3m, against £6.1m a year earlier.

Eldridge Pope said that, although business had grown in the past year and its performance was in line with analysts' expectations, the level of profitability was "disappointing".

This analysis was partly because a slow-down in consumer spending and fewer tourists had affected the group's performance in the second half of the year. Like-for-like sales for the year as a whole declined by 1.1%. In the second half of the year, like-for-like sales plunged by 4%, after an increase in the first six months.

Chief executive Mike Johnson said: "We have pursued a policy of carefully controlling costs and maintaining margins rather than chasing unprofitable sales."

He said that the company remained positive about long-term prospects for the food, accommodation and entertainment sectors of the pub business that it was targeting for growth.

"However," he added, "in today's tough market conditions, we are continuing to take a prudent view on capital expenditure and cost control."

Eldridge will allow itself just £8.7m of capital expenditure in 2003, compared with £13.6m in 2002. Most of the money will be spent on refurbishment.

by Samantha McClary