Beer monitoring specialist Brulines, backed by Growth Company Investor at 169.5p, says it is benefiting from the strife in the UK pub trade, having increased profits 76% in the year to March.

In an industry where it is estimated that over 50 pubs are closing a month, Brulines chief executive James Dickson says, ‘Perversely it is good news for us as pub companies need to make the most of their assets.’ He maintains that the company’s technology – which can monitor not only the volume of beer poured but also its quality – can save over £5,000 per pub per year.

Brulines completed 2,062 new installations during the year, including 106 of its higher-value Brand Quality Monitoring (BQM) systems. After acquiring rival Nucleus in January, the group has over 21,500 volume monitoring systems in operation, covering around 70% of the UK’s tenanted pubs and generating high levels of recurring revenues, which now represent 64% of sales.

As well as the pub industry, Brulines sells into around 15,000 non-pub outlets, mainly through its gaming machine monitoring services. This side of the business generated £250,000 profit, and, says Dickson, ‘there are a number of big opportunities’ this year.

As the previous comparative period was particularly strong due to a massive Enterprise Inns installation programme, group turnover only advanced 2% to £17m last year, despite acquisitions. Profits of £4.17m before tax produced earnings of 11.84p, and a final dividend of 3.55p means the shares yield 3.7%.

Given Brulines’ high-visibility recurring revenue base, Dickson is ‘confident as ever’ of hitting sales targets – for this year, house broker Cenkos is forecasting sales of £20m, £5.2m of profit and earnings of 14.5p, placing the shares on a forecast price-to-earnings ratio of less than ten times, which looks undercooked. Sit tight.

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Brulines	AIM	£38.96m	161.50p	0.00p
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