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Pub Chain Stubs Out Smoking Ban Effects

Edinburgh Evening News – July 4, 2008 – Michael Blackley

Strong food sales within its pubs since the smoking ban has helped profits at Lothians-based Belhaven surge by 16 per cent.

The Dunbar-based firm, which owns Edinburgh pubs including the Albanach and the World’s End on the Royal Mile, Pivo on Calton Road and Drouthy Neebor’s on West Preston Street, saw revenues rise six per cent to £126.1 million in the year to May 4.

Operating profits climbed to £27.5m, compared to £23.3m last year.

It attributed the success to repositioning specialist pubs to appeal to a wider customer base through an increased focus on food and value for money.

Greene King, the pub company that owns Belhaven, said the performance of its Scottish operations was particularly encouraging.

Following publication of its full-year results today, Greene King chief executive Rooney Anand said: “Although all our divisions have performed well in difficult circumstances, I am particularly encouraged by Belhaven’s result.

“Scotland’s smoking ban came over a year before England’s. In the second year of the ban, the Belhaven team have developed the business significantly towards food and families, and delivered operating profit growth of 18 per cent.”

During the last year, the number of Belhaven pubs trading increased from 299 to 321, 95 of which are managed and the rest leased or tenanted.

The company said that like-for-like rents and beer supply income from the leased and tenanted pubs were both positive.

And its managed pubs enjoyed “an excellent year” with strong profit growth. Mr Anand said: “Growth came from the successful repositioning of a number of specialist pubs to appeal to a broader consumer base, increased focus on food and value for money, and an impressive improvement in the rate of conversion of sales to operating profit.

“Food business development has been a key theme throughout the estate. Overall, Belhaven’s food revenue has increased by more than 50 per cent over the last two years.”

The Belhaven Brewery also performed well, with beer volume sales increasing despite the overall on-trade market being down six per cent.

Volume sales of Belhaven Best increased by 4.6 per cent, giving it a “substantial” increase in market share.

Greene King also acquired Loch Fyne Restaurants for £64.2m last August. It said the 41-outlet chain, which has a branch at Western Harbour, has now been successfully integrated into the group and is trading well.

Overall Greene King pre-tax profits increased by two per cent to £142m, while revenues rose five per cent to £960m.

Mr Anand said: “The year saw an unprecedented set of challenges for the industry but I am pleased to report exceptional performance across the business.”

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