Bedford brewer Charles Wells Ltd has announed a year of steady progress - and a signficant reduction in its debt.
Revealing annual results for the financial year to September 28, 2013, the company announced a total level of debt of £44.7m, down £18.8m on the previous year.
Revenues were slightly down - but this was due to the sale of Kestrel Super Strength beer at the start of the financial year.
The results include the performance of individual trading sectors of the business including Wells & Young’s Brewing Company, Charles Wells Pub Company and John Bull Pub Company.
The reduced borrowing was also driven by the sale of its distribution depot in Bedford.
Trading performance showed a fall in sales income of £7.9m to £181.6m and operating profit before exceptional costs was £0.4m lower than last year at £6.2m.
This decrease was anticipated because of the loss of third-party brewing contracts and the sale of Kestrel but was, in part, offset by the exceptional income from the sale.
Profit after tax was up 8% and adjusted EBITDA for the Group fell 20% to £13.9m.
Wells & Young’s sales fell £8m to £161.9m, reflecting the sale of Kestrel which had contributed sales of £8.7m the previous year.
The decision to sell was in line with the business’s strategic plan to reduce exposure to the super-strength lager market and develop a clearly defined portfolio which saw a number of new product launches including Wells DNA and McEwan’s Red.
Although focus has been maintained on core overseas distribution, international sales have also expanded into a number of emerging markets and the Cockburn & Campbell wines and spirits business recorded gross profit growth of 12%.
Sales for Charles Wells Pub Company were down 3.5% in a year that had seen a 4.6% reduction in the average trading estate to 203 houses.
Paul Wells, Chairman of Charles Wells Ltd, said “We can report a year of steady progress with financial results being better than forecast at last year’s Annual General Meeting. Net profit before tax for the year grew slightly and overall trading has been better than expected, with good summer weather, new initiatives and new markets all key features in growing sales.
“Whilst exceptional items such as restructuring following the loss of brewing contracts and the sale of Kestrel have impacted on the headline figures, we have worked hard to mitigate these losses and have some further exciting new initiatives planned for 2014.
Careful control of costs, including a 17% reduction in administration overheads by Charles Wells Pub Company, has helped protect our financial position and reduction of debt ensures we’re well positioned to grow the business.
“Our tax obligation remains high, with the percentage of tax paid in relation to turnover rising to 44%. However, the cancellation of the duty escalator and cut in duty of 1p per pint helps to ensure that we will continue to invest in high quality pubs in the UK.
“Our brand portfolio includes an unrivalled mixture of traditional and imaginative beers and we look forward to strengthening our reputation by bringing interesting new beers to market in 2014.”
Whilst 18 smaller and unviable sites were sold, the Company continues to invest in pubs and spent £3m on property refurbishments with EBITDA per pub rising 3.4%.
In France, the John Bull managed estate opened its ninth pub, with house net profit rising 13.5% and EBITDA close to breaking through the €1m mark.