Tough pub market hits Brulines' installs

Cash-strapped pub operators have been holding off ordering beer flow monitoring equipment from Brulines, the group admitted today.

Revealing its annual results the Stockton-on-Tees-based group, which has recently diversified into petrol station forecourt data analysis, said it had seen a "modest" increase in the turnover of its core beer flow monitoring business "as a consequence of installations being delayed due to the tightening of finance availability for our customers".

Brulines nevertheless said it had seen "satisfactory progress" across its new installations, which numbered 930, with 580 being the group's i-draught quality assessment system.

"Good progress has been made on the commercial development of i-draught, with new regional brewer contracts and commercial evaluation in the managed house sector," the group added.

In October last year Brulines announced it had signed a deal with Suffolk brewer Greene King to install its i-draught system across its tenanted pub estate.

James Dickson, Brulines' chief executive, said he believed "that for an organisation of the scale and professionalism of Greene King to have selected Brulines' product to be integrated across their pub estate is a great endorsement of i-draught and adds to the momentum which is being created".

Recurring revenues were now 84 per cent of total turnover, the group said, while gross margins rose one percentage point to 59 per cent.

Dickson meanwhile said claims by anti-beer tie groups that its equipment was inaccurate were wrong.

"Comments relating to the accuracy of beer flow monitoring equipment have been voiced in the public domain on several anti-tie forums and aired in representations to the BISC by those opposed to both the beer tie and certain pub companies who operate and manage such tie agreements.

"Brulines believes that much of this comment is erroneous, and the commentary has been heavily influenced by lobbying from those opposed to the beer tie."

He added that evidence provided by Titan Enterprises, which manufactures the flow meters for the group, confirmed they were "highly accurate and reliable at measuring liquid flow to a high degree of repeatability over a sustained period of time".

Dickson said Brulines' gaming machine data division had seen flat turnover of £800,000 and net profits of £100,000.

Looking ahead, despite the tough pub market, controversy over the beer tie and debate over the accuracy of Brulines' technology, he added that "future growth prospects are encouraging and management continues to view the future with confidence".

Results at a glance - year to March 31, 2010

Turnover: £19.8m (up four per cent)

Operating profits: £5.1m (down eight per cent)

Pre-tax profits: £4m (down 15 per cent)

Full year dividend per share: 5.5p (up three per cent)