Expansion is key to success for Wolverhampton & Dudley

26 May 2006
Expansion is key to success for Wolverhampton & Dudley

Weaker consumer confidence, higher energy and employment costs and the risks presented by the impending smoking ban have not impeded growth in any of Wolverhampton & Dudley Breweries' trading divisions, the company's interim results reveal.

Chairman, David Thompson attributes the success to a strategy of acquisition and organic expansion, with the company's pub estate now numbering 2,358 mainly freehold pubs. Acquisitions have included The Union Pub Company's purchase of 70 pubs from Celtic Inns in March, with seven new pubs added to the Pathfinder portfolio in the first half-year period.

"This expansion has enabled us to reduce purchasing costs significantly and spread out overheads, as well as increase our trading geography across England and Wales," said Thompson.

Results for the 26 week period ending 1 April show an increase in turnover of 9.2% to £281.4m. Underlying operating margin also increased, by 23.6%, despite cost pressures across the business; cash-flow from operating activities increased by 72.2% to £99.2m.

"Our acquisition strategy and the flexibility of our business model have enabled us to respond effectively to rising costs and regulatory change. Operating margin increased despite the impact of an extra £1m of employment costs as a result of the higher national minimum wage and the rise in electricity and gas prices which increased costs by £3m in the first half-year," said Thompson.

Dealing with future pressures, including the smoking ban, due to be implemented in England in summer 2007, will involve investment and flexibility, he added.

"We will have invested £8m in patios, gardens and shelters by the end of this financial year," he said. "We have clear plans to invest a further £12m in the next financial year and expect to be well prepared to neutralise risk and maximise opportunities."

By Matthew Batham

Get your copy of Caterer and Hotelkeeper every week -

The Caterer Breakfast Briefing Email

Start the working day with The Caterer’s free breakfast briefing email

Sign Up and manage your preferences below

Check mark icon
Thank you

You have successfully signed up for the Caterer Breakfast Briefing Email and will hear from us soon!

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.


Ad Blocker detected

We have noticed you are using an adblocker and – although we support freedom of choice – we would like to ask you to enable ads on our site. They are an important revenue source which supports free access of our website's content, especially during the COVID-19 crisis.

trade tracker pixel tracking