Recent full year results from pub operator P'n'B showed improved pre-tax profits of £1.3m, a 6% jump. Managing 71 pubs and with 24 tenanted pubs, turnover fell 2.1% to £14.2m as the company changed the focus on its food-led businesses. These are now tenanted rather than managed and so rent rather than sales are received. Last December, P'n'B entered into a ten year agreement with Bank of Scotland Integrated Finance to operate on its behalf 32 pubs through Community Taverns. In return, the company receives £40,000 per month in management fees. P'n'B also took a 15% stake in Community Taverns and is committed to spending £750,000 over 18 months towards CT's capital expenditure. CT will repay this cash to P'n'B through the profits that it generates. Four pubs were acquired during the period and four underperforming pubs were disposed of. Chairman MC Mealey stated that the market for buying and selling pubs eased last year from the 'excesses' seen in the previous two years, but demand remains 'keen' for good freehold properties. Gearing remained static at 93%. Current trading is in line with expectations. Consensus forecasts for 2004 expect sales to be flat at £14m and pre-tax profits to drop slightly to £1.2m. With an EPS of 3.97p, the prospective p/e of 10.6 makes this stock reasonably cheap compared to many of its larger peers. Add.