Manchester-based brewer and retailer Joseph Holt, which runs an estate of 128 pubs, has unveiled "disappointing" profits for 2005. Turnover rose £221,000 to almost £38.6m but pre-tax profit dropped from £5.7m in 2004 to £4.8m.
In Companies House documents, chairman David Tully said: "Like-for-like turnover was up by 2.8%; gross margin improved, but not enough to cover increased costs. Market conditions were challenging, with growing government regulation, extra pension costs and above-inflation increases for many cost categories such as utilities, satellite television and the national minimum wage."
The company increased spend on its pubs by £1m to £5.9m in the absence of "quality acquisitions at sensible prices" and bought one pub, the Winston in Salford, during 2005.
A total of £500,000 was spent on developing
the brewery's capacity, to allow increased lager brewing, and a new kegging line.
Tully said: "Our own lagers are proving so popular that we introduced Extra Cold Crystal before Christmas with Extra Cold Diamond due
later this year."
Holt's has also launched a new range of bottled beers which is seeing success in the off-trade.
The company is focusing on improving its existing estate in the absence of quality acquisitions.
"Houses occupying locations that can benefit from redevelopment are being targeted," Tully said.
"These pubs help promote our excellent food offering. The Blue Bell at Blackford Bridge, Lancashire and the Angel at Knutsford, Cheshire, both redeveloped last year, are trading extremely well."
Overall 2005 dividend for shareholders was 73p - the same as in 2004.