Butcombe to take action against legal advisors

Pre-tax profits for the Somerset-based firm fell 58.5% to £561,394, operating profits declined by 49.3% to £833,001 and underlying EBITDA fell 6%.

However, turnover grew 7.2% to £19.7m in the year to 28 February 2013.

“Brewery volumes increased but margins suffered. The pub estate performed better than in previous years,” said Butcombe, which described it as an “acceptable trading performance in extremely difficult economic conditions”.

Non-recurring costs​

The company explained: “The reduction in net profit stemmed principally from four non-recurring costs. Exceptional non-recurring charges of £657,000 were incurred during the financial year. These related to three factors: £431,000 to the closure of the Imperial pub, £105,000 to the closure and sale of the Red Tile and £121,000 to the write off of goodwill on the leasing of the Ring of Bells, exceptional tax advice and redundancy costs.

“The Imperial was a major leased pub investment made in March 2012 in Weston Super Mare that failed to meet our expectations. We have a break clause at two years in the 10-year lease to meet this eventuality.

Inoperable clause​

“However, on exercising the break it was found to be practically ‘inoperable’. Over half of the charges related to the Imperial relates to a payment to satisfactorily effect the break clause. We will be taking action against our legal advisors to recover this element of the loss.”