Companies: BRU   

Beer-flow monitoring concern Brulines, which reversed into AIM shell Comprehensive Business Services in 1999 and out again in an MBO three years later, is knocking on the doors of ever more pubs.

James Dickson, the former Scottish & Newcastle and Whitbread man who was given the reins in 2003, is the architect of a strategy that has driven the numbers of pubs that use Brulines beer monitors up from around the 1,500 mark to over 17,000 – more than half the growing tenanted pub market. Brulines’ clients include Punch Taverns (owner of over 9,200 pubs), Enterprise Inns (7,809 pubs), Scottish & Newcastle (1,650) and Green King (nearly 800). The closest competitor, Nucleus, has only 2,500.

Companies operating tenanted pubs employ Brulines technology to check the amount of beer passing from barrel to tap. This helps verify if the licencee is buying beer from outside the ‘tie’ agreement with the owner. It also protects the income of the pub by providing a measure of true amount of beer being sold there. Recurring revenues, from the provision of data and other services, have risen by around 50% this year and should be 60% the next.

Drivers for new business come from consolidation of estates within the pub owning companies and new product development such as the proprietary products in trial to monitor whether lines are cleaned properly, the use of gambling machines, the temperature in fridges and even numbers of punters.

The first half-year saw pro forma turnover double to £9.2m and profits before tax and exceptionals squirt 142 per cent to £1.4m. Debts of £8.9m were wiped by the £8m raised at float in October and the £2.2m cashflow in the period, leaving just shy of £3m in the till.

Forecasts from house broker Cenkos point to £3.4m before tax and exceptionals for the full year and £4.2m profits and 12.1 earnings for 2008. 2008 numbers do not include any impact from the potential uptake of products in trial. Could be worth a tipple.

Brulines	AIM	£30.4m	126.00p	-1.50p
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