After selling their brewery a while back(*) Burtonwood have now decided to sell off all of their pubs, it seems. (*) they sold the brewery to Thomas Hardy Brewing, who aren't based in Dorset (or even Devon, like O'Hanlon's!) & don't brew Thomas Hardy Ale!) Confused yet? cheers MikeMcG from
The Wolverhampton, England-based company will offer 550 pence a share for Burtonwood, an operator of 460 U.K. pubs, Chief Executive Ralph Findlay said. Full-year profit rose 26 percent, Wolverhampton & Dudley also said.
British pub companies are consolidating to help cut operating costs and strengthen bargaining power with brewers as Britons increasingly choose to drink at home and as the government prepares to ban smoking in pubs that serve food. Wolverhampton & Dudley agreed in June to buy Wizard Inns Ltd., a pub operator in southern England, for 89.9 million pounds.
``The U.K. market is mature and is experiencing regulatory and cost pressure, which makes it difficult for small operators to grow,''
43-year-old Findlay said in an interview. ``Consolidation will continue within the industry, and it's a process we'll continue to be interested in.''Shares of Wolverhampton & Dudley rose 8.5 pence to 955.5 pence at 8:30 a.m. in London. The stock has gained 25 percent this year, beating the
23 percent increase by the 18-member FTSE 350 Leisure & Hotels Index. Burtonwood stock climbed 32.5 pence, or 6.3 percent, to 545 pence.Central England
The bid is 43 percent higher than Burtonwood's share price on Nov. 26, the last business day before the company said it was in talks that may lead to a takeover. Wolverhampton & Dudley may sell as many as 3.87 million new shares for Burtonwood shareholders as part of an alternative to the cash offer.
The pubs leased out by Warrington, England-based Burtonwood are mostly in northwest and central England and northern Wales, while the Wizard Inns outlets are in southern England, Findlay said. The acquisition will save Wolverhampton & Dudley 3 million pounds a year in operating and distribution costs, he said.
Annual net income at Wolverhampton & Dudley climbed to 48.4 million pounds, or 65.9 pence a share, in the year through Oct. 2 from 38.5 million pounds, or 52.5 pence, in the prior period, Enterprise Inns Plc, Britain's biggest pub owner, this week posted a 29 percent gain in second-half profit after taking control of Unique Pub Co.
Wolverhampton & Dudley, like competitor Mitchells & Butlers Plc, is selling more meals and increasing non-smoking areas at its traditional pubs in residential areas to attract families as Britons cut back on beer drinking.
Smokers
The owner of the Bostin' Local pub chain now gets about 30 percent of its sales from food, up from 17 percent three years ago. As much as 80 percent of its outlets have outside facilities for smokers, Findlay said.
``While `wet sales' offer higher gross margins, the introduction of food works as a channel for introducing families into the pub,'' James Dawson, an analyst at Charles Stanley in London, wrote in a note to investors before the earnings were released. Dawson has an ``accumulate'' rating on the stock.
Mitchells & Butlers, the owner of U.K. pub chains All Bar One and O'Neills, said this week second-half profit climbed 9.5 percent after it sold more food and wine at its pub restaurants. Like Wolverhampton & Dudley, food also accounts for about 30 percent of Mitchells & Butlers' sales.
The pub company's roots date back to 1875, when the Banks family started brewing in Wolverhampton. By 1890, the family had linked up with the Thompson family, brewers in nearby Dudley, and Charles Colonel Smith's Fox Brewery in Wolverhampton.
To contact the reporter on this story: Gabrielle Monaghan in Dublin ________________________________________________