Pub operator and brewer Hardys & Hansons once again had a stellar year against a sector backdrop of increasing competitive pressure as well as uncertainty regarding potential legislation. By continuing its strategy of acquiring and developing food-led and community pubs, all three operating divisions, managed houses, tenanted pubs and its brewing outfit improved profits and like-for-like sales. Turnover for the year to October increased 7% to £76.2m. Adjusted pre-tax profits (stripping out profits made from disposals of pubs) also rose 7% to £15.2m. During the period, H&H acquired four tenanted houses and has since purchased a further three for the tenanted estate and one for the managed estates. Although chairman James Kerr-Muir, who recently took over from the now retired Richard Hanson, stated that current trading, if maintained, should translate into another year of growth, a number of pressing issues could have an effect. The implications regarding the Government's white paper on smoking in public places and the proposed Gambling Bill, which recommends a harsher regime for amusement machines in pubs, have yet to be made clear. What is likely to have a more immediate impact is the transferring of licences from magistrates to local authorities. The costs for the change are estimated to be at least £250,000. Consensus analysts expect pre-tax profits of £15.9m for the year. As one of the hardier constituents of the sector, keep holding.