Heavitree Brewery issued a dour profits warning, reporting that pre-tax profits for the year ended in October will be at least 20% down on last year. The Devon-based pub operator claims to be beset with operational problems. Bizarrely, in some pubs where Heavitree could not find a permanent tenant but wanted to continue trading, a temporary tenant was allowed to remain without paying rent. Understandably this has been difficult to resolve. The performance of the managed house subsidiary, Heavitree Inns, was also lower than expected and the heavy cloud surrounding the group's employee pension scheme, which is only 68% funded, has yet to be lifted. In its defence the group claims an increasing number of houses are being returned to tenancy with others marketed for sale. It has also terminated its arrangements with the management agents Hall & Woodhouse and appointed the pub management specialists, Albion Pub Contracts.