Pub chain shrugs off tough trading

British company Pubs’n’Bars today posted a 2% rise in profits but warned that proposed changes to drinking laws and rising energy costs were fuelling uncertainty in the sector.

The London-based group, which has 64 unbranded pubs, said half-year profits of £531,000 (€776,700) represented a positive start to the year as trading conditions remained tough.

The improved performance for the six months to June 30 was driven by a change in strategy to give landlords greater control over their pubs.

A total of five outlets were transferred from management to tenancy during the period and this improved margins at a time when sales fell by 1% to £7m (€10.2m).

The group runs 24 tenanted pubs and has 40 under the control of managers, while its Community Taverns joint venture with Bank of Scotland puts it in charge of a further 32 outlets.

Chairman Mike Mealey said: “The board is pleased with the first-half performance when compared to many others in the sector.”

Pubs groups are gearing up for the UK's new Licensing Act, which will hand responsibility for licensing pubs, night-clubs and off-licences to local councils when it comes into force next year.

The act also offers landlords the chance to sell alcohol 24 hours a day, but Pubs’n’Bars said none of its outlets would stay open around the clock.

Price changes announced by energy companies were also creating uncertainty in the sector and threatened to increase the group’s power costs by 40%.

At the same time, operators were alert to the possibility of a smoking ban in pubs after parallel legislation was passed in Ireland last year.

Despite the unpredictable outlook, Mr Mealey said the group was “actively seeking new acquisitions and opportunities”.

Shareholders are in line to receive an increased dividend of 0.75p, up from 0.5p a year ago.