Regional brewer George Gale is toasting a "satisfactory year of growth" which has seen both profits and turnover increase against a backdrop of rising costs and a challenging trading climate.
The Hampshire-based company reported pre-tax profits up by 4.3% to £4.3m and turnover ahead 4.9% to £39.4m. Brewing volumes of Gales' own-ale brands increased by 1.8% over the year.
Managing director Nigel Atkinson said escalating costs and overheads much of it directly due to Government legislation has meant major challenges for the company's 44 managed pubs.
"There have been significant increases to the cost base, particularly in energy and the minimum wage, and further burdens being imposed from the EU and Westminster means we are constantly reviewing the threshold at which we operate managed houses.
"This is nothing new because we review these every 12 months, but this year there has been a particularly huge rise in legislation costs. It does not mean we are planning wholesale changes and transferring numbers of pubs to tenancy but we do have to keep an eagle eye on these rising costs," he said.
He revealed Gales faced a 25% rise in electricity and gas charges in managed pubs over the year.
Turnover in the managed estate was up 7.1% and profit rose by 5.1%, although one source of concern was a shortfall of more than 10% in AWP machine income, which Gales blames on customers seeking more attractive fixed odds in betting shops.
The 66-strong tenanted estate performed ahead of expectation although machine income suffered in the same way as the managed houses.
Cask-ale production grew, with Gales' own brands enjoy-ing particular success with national accounts, where volumes rose 6.3%.