Having more than doubled sales for the year to December, community pub owner and operator Pubs ’n’ Bars is helping to displace the doom and gloom surrounding the sector following last summer’s smoking ban.

Pre-tax profits rose by an impressive 107% to £1.02m last year, as revenues frothed up by 30% to £19.9m, although the proposed dividend was cut from 1.75p to 1.25p, as earnings reduced by 11% to 2.7p, in a move reflecting the ‘current uncertainty surrounding the broader economic environment’.

According to chief executive Mel Belligero, Pubs ’n’ Bars’ portfolio of local ‘boozers’ is key to its consistent performance and ensures the business is less likely to be affected by passing ‘fashions’. The company has a portfolio of 106 public houses, 58 operated by managers and 48 tenanted pubs run by entrepreneurial operators. In more favourable economic conditions, the business model has proved very profitable and has benefited from management’s strong controls and the expedient disposal of underperforming premises.

Despite last year’s creditable results, trading in the current year has apparently been ‘dreadful’ and house broker Daniel Stewart’s 15% growth forecast reflects full-year contributions from acquisitions. However, based on forecast earnings of 1.52p, Pubs ’n’ Bars trades on a relatively undemanding prospective price to earnings ratio of 15.5 and has previously proved its ability to achieve good organic growth rates. Speculative buy.

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