Brulines shares slump after profit warning

Brulines shares dived 15 per cent this morning after it warned its full year profits were likely to be 20 per cent lower than previously predicted.

Blaming what it called "well-documented problems" in the pub industry, the group said second half trading would be slower than anticipated and consequently operating profits were forecast to come in at around £4m, down from the £5m previously indicated.

In a trading update Brulines said it would still pay a dividend to shareholders, despite the sales slide, thanks to what it called "continuing positive cash generation from its core business".

It said it had seen a "continuation of the well-documented economic conditions and commercial pressures affecting some core leisure customers", with pub sell-offs impacting its business, as well as companies deciding to delay investing in its equipment.

"Customers have delayed committing to projects for a number of reasons, including waiting for what were positive results from Brulines' National Measurement Office (NMO) testing, waiting for increased clarity on the [Business, Innovations & Skills Committee] pub industry enquiry, and carrying out extensive evaluation of i-draught as a replacement for standard Dispense Monitoring Services," it added.

The bad weather in December and January had compounded these issues, it said.

However it said that progress on key products meant it was confident it would return to growth in the coming year.

Brulines beer flow measurement technology is installed in around 21,000 pubs and was recently subjected to a series of tests by the NMO, the results of which failed to silence the kit's critics.

A spokesman for Brulines said the group remained committed the pub sector, but due to the condition of the on-trade was putting more effort into other parts of the business, such as its petrol forecourt activities.

Brulines' shares were trading at 87.5p, down 15p.