Beer drinkers gloom about the economy has hit profits at Scottish & Newcastle over the past year, but it will continue its UK expansion plans, the group confirmed today.
Spending on the beer and pubs groups products fell along with a sharp slide in consumer confidence last summer, only showing signs of recovery later in the year, chief executive Brian Stewart said.
However, Stewart said that it would open 90 outlets this year as it makes acquisitions for its licensed and leisure brands, such as Chef & Brewer and Old Orleans, and 23 units for its budget hotel chain. Overall, it invested £178m within its retail division last year, including £99m on development projects and £40m on acquisitions.
Pretax profits for the year to May 2 fell to £323.7m from £422m the previous year. Turnover was £3.33 bn, against £3.39bn last time.
Even after stripping out exceptional costs this year, profits were down 4.8% and the renegotiation at a lower price of a beer supply contract with the Grand Pub Company also affected profits.
In April, S&N sold 172 free of tie tenancies to the Royal Bank of Scotland for £50m.
EGi News 06/07/99
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