Pubs 'n' Bars will be "badly hit" by smoke ban

Pubs 'n' Bars, the South West London-based pub group, says it expects to be "badly hit" by the English smoking ban.

Announcing the group's annual results today, non-executive chairman Seamus Murphy said there was "little doubt that, initially, we and our competitors will be badly affected by loss of both bar sales and machine income.

"To alleviate the situation we have initiated a programme of creating attractive covered areas with lights and heaters outside every pub in the estate where space is available."

Murphy said smoking areas had been installed in nearly a third of the group's 98 strong estate "and we will only have nine pubs without a dedicated outside smoking area. The cost, however, has not been insignificant and we estimate that we will spend a total of £300,000 on the shelters and ancillary equipment".

Pubs 'n' Bars reported pre-tax profits for the year to December 31 2006 down 2.4 per cent at £1.07m on turnover of £15.3m, up 11.4 per cent.

Despite earnings per share dipping seven per cent to 3.25p, the group is expecting to pay a total dividend for the year of 1.75p.

Commenting on the group's trading prospects, Murphy said the biggest threat to the business and that of its competitors "remains drinking at home and drinking in the streets, fuelled by the availability of illegally imported alcohol and cut price beer and other alcoholic drinks in supermarkets".

However, he said he remained "optimistic in the longer-term. Community pubs have traditionally provided a convivial neighbourhood meeting place and we expect this to continue once our customers have adjusted to the ban.

"Indeed, once the situation has clarified we expect to continue with our policy of acquiring freehold community pubs."

Murphy said the recent £2.45m cash acquisition of the minority shareholding in Community Taverns that it did not own had now been completed.