27th Sep 2006 07:01
Wolverhampton& Dudley Breweries PLC27 September 2006 27 September 2006 The Wolverhampton & Dudley Breweries, PLC ('W&DB') Pre Close Trading Update In accordance with its usual practice the Board of W&DB PLC reports on tradingfor the 51 weeks ending 23 September 2006. Preliminary results for the 52 weeksto 30 September are due to be reported on 1 December 2006. Trading Performance for the year to date is in line with our expectations, with goodsummer trading overall. In Pathfinder Pubs, which comprises 457 managed pubs, total like-for-like salesduring June and July were up 6.7%, benefiting from good weather and the WorldCup. Trading since the end of July has continued to be ahead of last year. Totallike-for like sales in the second half of this financial year were 3.7% ahead oflast year and 2.4% ahead in the 51 week period. We have made excellent progresswith our new-build pubs in Pathfinder Pubs, and have a good pipeline of sitesfor development in 2007. The Union Pub Company will comprise 1,898 tenanted pubs following theacquisition of Celtic Inns in March 2006 and on completion of the transfer of 93pubs from Pathfinder Pubs during the second half of the year. Average profit perpub is estimated to have increased by approximately 5% in the 51 week period. Our recent sponsorship of the England Cricket Board ("The ECB") reflects WDBBrands' increasing focus on premium ale - through Marston's Pedigree, Old Empireand Jennings Cumberland Ale. We have increased our share of the premium alemarket, and performed in line with the standard ale market. Pensions We are in the process of a carrying out a triennial valuation of our finalsalary pension scheme and, although the valuation is not yet finalised, weestimate pension costs charged to the profit and loss account will increase byaround £2 million from next year. Share buy-backs During August we purchased around 904,000 shares at a total cost of £11.8million which have been placed in treasury. Our conservative financing allows usto continue to consider acquisitions or future share buy-backs whilst retainingan efficient balance sheet. Outlook Detailed plans are in place in preparation for the smoking ban in England andWales, which is due to come into force during the summer of 2007 or earlier. Ourinvestment plans, both in managed and tenanted pubs, are well advanced. Over 85%of our pubs have gardens, patios or some form of outside trading area, allowingus to target opportunities and reduce risk. We expect that higher energy prices and a 6% increase in the minimum wage levelwill impact our overall cost base by around £5 million next year. We remaincautious on the outlook for consumer spending given recent increases in domesticenergy costs, historically high levels of consumer debt, and some upward pressure oninterest rates. We continue to seek to mitigate the impact of cost pressuresthrough efficiency and cost reduction initiatives. Our integrated business model provides us with wider investment opportunitiesand increased operational flexibility. The Board remains confident that ourstrong balance sheet, conservative financing and strong cash flow will allow usto continue to target further investments meeting our return on capitalcriteria. Enquiries: The Wolverhampton & Dudley Breweries, PLC Hudson SandlerRalph Findlay, Chief Executive Andrew HayesPaul Inglett, Finance Director Nick LyonTel: 01902 329516 James White Tel: 020 7796 4133 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Marstons