E-Malt.com News article: 2400

Great Britain's Wolverhampton & Dudley Breweries Plc is on the prowl to buy more pubs after first-half trading met expectations, the country's biggest regional brewer said on March 25, according to Reuters’ report. The brewer of Pedigree, Banks's and Mansfield beers and owner of around 1,600 pubs said its debt re-financing had cut borrowing costs and given it 150 million pounds ($273 million) to fund acquisitions.

Chief Executive Ralph Findlay said the extra finance could be used for buying pubs in a industry likely to throw off "short-term opportunities" or to buy back shares. "The refinancing gives us scope to make acquisitions up to 150 million pounds, and we could raise more given our relatively low debt gearing," said Findlay in an interview.

Findlay declined to comment on targets, but Deutsche Bank's 620-strong Laurel Pub Company is likely to come to the market this summer for around 500 million pounds while W&D's old target Eldridge Pope may come back within its sights. W&D approached Eldridge privately in 2003 about a takeover but the offer was rejected.

W&D is likely to want to buy pubs in local communities, where it is already very strong, which attracts greater customer loyalty than some high-street rivals which are more exposed to slowdowns in consumer spending and changing fashions.

The 114-year-old central England brewer reported a 2.8 percent growth in like-for-like sales from pubs in its managed 450-strong estate for least two years during the 25 weeks to March 20 in a trading update at the end of the first-half.
Some big pub refurbishments led to a slight slowdown from the like-for-like sales rise of 3.1 percent in the 16-week period to January 17, and a 3.6 percent increase in the group's previous financial year up to end-September 2003.
"The group is currently enjoying a burst of growth which means the short and medium term for the company looks fine," said analyst Nigel Popham at broker Teather and Greenwood.

W&D's shares rose 0.9 percent to 862-1/2 pence by 1005 GMT. They have outperformed the FTSE 100 index by 35 percent over the last year and by nearly 100 percent since fighting off a hostile 513p a share bid from Pubmaster in August 2001. The group added that its 1,150 leased and tenanted pubs saw like-for-like sales up 5.2 percent in the latest 25 week period, and it described trading at its beer business as satisfactory.

The company added that its overall group margins were in line with the previous year despite increased pressures from higher pension costs, wages and insurance. The group's first-half results are due on May 21.


26 March, 2004