UK's Wolverhampton & Dudley Breweries Plc served up strong Christmas sales as its pubs in residential areas continued to weather a slowdown in consumer spending growth better than high street rivals, Reuters released on January 23. The brewer of Pedigree and Banks's beer and owner of just over 1,600 pubs said sales at managed pubs open more than a year rose 3.1 % in the 16 weeks to January 17, in line with trading after the first eight weeks of the financial year.

Like-for-like sales at its tenanted pubs rose 5.1 percent over the same period. Profit margins were "firm and in line with our expectations," Britain's biggest regional brewer said in a statement ahead of its annual shareholder meeting.

At 1110 GMT, Wolverhampton & Dudley (W&D) shares were up 1.4 percent at 801 pence, a record high. Britain's pubs are struggling with a slowdown in consumer spending growth at a time when new licensing regulations and higher wages are adding to their costs.

W&D has fared better than most, partly because its pubs tend to be in based in local communities and attract more customer loyalty than some high-street rivals. "The sales numbers compare very favourably with the wider industry," said Greg Feehely, an industry analyst at Altium Securities, who raised his target on W&D shares to 850p from 800p and retained an "add" investment recommendation.

W&D said it was on track with plans to convert its managed pubs into either the value "Bostin Local" or swisher "Service That Suits Me" trading formats. Chief Executive Ralph Findlay said the 114-year-old central England firm would continue to return cash to shareholders, while also building new pubs and looking for acquisitions.

He declined to comment on speculation W&D might bid for struggling pub rival Eldridge Pope & Co Plc. W&D also announced the launch of Marston's FC to tap the growing market for so-called "creamy" beers. "Some of these beers can be very bland. But Marston's FC will be almost unique in the market in having a proper taste," he said in a telephone interview.

27 January, 2004