by The PMA Team
Bedford brewer and retailer Charles Wells has given its entire staff an extra week's pay after a windfall profit of £3.1m with the sale of its 22% stake in the McKenzie Group, owner of music venues such as the Brixton Academy and the Shepherd's Bush Empire.
The company saw a 9% increase in turnover to £110m, with operating profit up to £4.9m for the year ended 2 October 2004. In its pub estate, profits rose 7%, with 78 pub improvements being carried out at a cost of £4.85m. Six new pubs and the freehold of an existing leased pub were acquired at a total cost of £5.5m, an average of £785,714 per pub.
Managing director Paul Wells said: "We regard this number of purchases as fairly successful given the competitive nature of the market."
A total of 30 managed houses were transferred to tenancy which meant the managed Eagle Inns division, with lower head office costs, produced 15% more profit on a like-for-like basis.
Chairman Alan Jackson noted the "extraordinary growth" in legislation on drinking, smoking and healthy eating in the past year. He added: "Of particular concern is the published bill on health which will divide pubs into smoking or eating pubs in three years' time.
"This takes no account of the varied sales mix of the majority of our pubs, but is preferable to a complete ban on smoking."
Total beer barrelage during the year rose 16% to 438,056 barrels.
"The strong growth was driven by the exceptional performance of Corona Extra, which we import from Grupo Modelo of Mexico and which is now the fourth-largest beer brand world-wide," said Paul Wells.
The company's flagship Bombardier bitter grew volumes by 10% during the year, with Red Stripe up 22%.
"This was our first full year with the complete rights for sales and marketing in the UK and the response from the trade and customers has been encouraging and supportive," added Wells.
Final dividend for shareholders is £2.60 for the full year with a special dividend of £1.50 as a result of the profit from the McKenzie Group.