28th Sep 2005 07:01
Wolverhampton& Dudley Breweries PLC28 September 2005 28 September 2005 The Wolverhampton & Dudley Breweries, PLC ('W&DB') Trading Statement In accordance with its usual practice, the Board of The Wolverhampton & DudleyBreweries, PLC ("W&DB") has issued the following trading update prior toentering its close period at the end of the current financial year to 1 October2005. Trading Trading over the summer period has been satisfactory and ahead of last year,notwithstanding the benefit of Euro 2004 in the comparable trading period. In the 51 weeks ended 24 September 2005, total like-for-like sales in PathfinderPubs were 2.8% ahead of last year. Like-for-like sales in The Union Pub Companywere 2.8% ahead of last year for the same period. In W&DB Brands, brewed beervolumes increased by 5.2% (excluding non-owned brands), including a 14.8%increase in premium ale. Across the Group, margins are ahead of last year despite significant costincreases, and the results for the year as a whole are anticipated to be in linewith our expectations. Acquisitions The integrations of Burtonwood (acquired January 2005) and Jennings (acquiredMay 2005) were completed as planned, and the trading contributions from theseacquisitions have met our expectations. As previously stated, anticipatedsynergies of £3.0 million per year from Burtonwood have been increased to atleast £3.5 million per year. The targeted synergies of £2.0 million per yearfrom Jennings will be slightly exceeded. We announced that our offer for English Country Inns became unconditional on 15September 2005, and the integration of the 14 managed pubs is underway. Refinancing and pension fund contribution The Group refinanced its debt in August 2005, replacing existing debentures andbank debt with an £805 million securitisation and a £250m bank facility. The newfinancing structure provides greater flexibility for acquisitions, increases theaverage maturity of the Group's debt and also reduces the cash cost of debt bysome £5 million per year. As previously indicated, a one-off contribution of £29 million has subsequentlybeen made to the final salary pension scheme, reducing the aggregated FRS17deficit across all Group schemes to approximately £30 million (after tax). The overall effect of these transactions will be to reduce interest charged inthe profit and loss account by approximately £1.5 million per year. Thisincludes the £5 million cash saving from refinancing, interest on the one-offpension contribution of £29 million, and the fact that historical non-cashdebenture fair value accounting adjustments will no longer be required followingthe refinancing. Licensing Having completed premises licence applications in respect of all of our pubs, weanticipate that all hearings and the requirements for personal licences willhave been successfully dealt with by 24 November 2005, the date for theimplementation of the new licensing regime. The majority of pubs in our estatehave applied for modest extensions to opening hours. Outlook The regulatory and cost issues affecting our industry have been challenging, andremain so. In the coming financial year, staff costs will increase by some £2million as a consequence of the higher minimum wage, and we expect energy coststo rise by over £5 million as a result of energy prices which are at least 50%ahead of last year. Additionally, a more challenging consumer environment iswidely reported. We aim to continue to offset rising costs by improving productivity,demonstrating the strength of our business model and the benefits of operationalflexibility. This includes the potential to transfer smaller managed houses totenancy, with 19 pubs currently being transferred to The Union Pub Company fromPathfinder Pubs. We have a strong balance sheet and relatively conservative gearing which enablesus to consider acquisition opportunities as they arise in a consolidatingsector. The Preliminary Results for the year ending 1 October 2005 will be announced on2 December 2005. Commenting, Ralph Findlay, Chief Executive, said: 'The growth of the business isbeing driven by a combination of organic development and the successfulintegration of recent acquisitions. Our focus on good quality freeholdcommunity pubs, high retail standards and popular beer brands places us in agood position to benefit from the changes that are taking place in theindustry'. ENQUIRIES: The Wolverhampton & Dudley Breweries, PLC Hudson SandlerRalph Findlay, Chief Executive Andrew HayesPaul Inglett, Finance Director Nick LyonTel: 01902 329516 Tel: 020 7796 4133 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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