First annual results from the merged Cains brewery and the Honeycombe pub estate show the pubs continue to struggle but the brewery is frothing with activity.

So although the brewing business saw like-for-like sales increase 7% and the contract canning and brewing arm by 7.4%, like-for-like sales slipped 11% at the pub estate. At group level a ‘normalised’ pre-tax loss of £2.1m was produced, against Honeycombe’s £13.5m loss the year before.

Having identified nine pubs requiring immediate investment, chief executive Sudarghara Dusanj claims to have completed the refurbishment of the first one already. 'The market is tougher than we anticipated,' he says, 'and so was the weather last summer, but this is a turnaround and they are always tough.’

On the plus side, the integration has gone well and will skim off a good deal of ongoing overheads, says Dusanj, who expects much from his new executive and board teams, with the appointment of former Punch Taverns director Francis Patton a ‘real coup’. Going forward, although dark clouds remain on the horizon in the shape of worsening consumer confidence and the continued impact of the smoking ban, the supermarket listings for Cains beers at Asda and Morrisons are a silver lining.

After Growth Company Investor recommended shareholders accept the offer last June, the shares more than doubled to 28.5p after the merger but have steadily dripped down to pre-merger levels. Having traded well above £1 at the turn of the millennium there is plenty of upside potential in the long-term, but with investors particularly risk-averse at present and with Cains' debts at £34m, it may be wise to abstain until the pub trade starts making merrier noises.

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