Rising costs hampered profitability at St Austell Brewery last year, despite a year of “record” sales for the Cornish beer powerhouse, its latest results reveal.
Revenues at the brewer and pub company grew 10.3% to £169.3m for the year ending 30 December 2017, with its CEO James Staughton hailing a “period of unprecedented growth over recent years”.
He highlighted a particularly strong performance for its Proper Job IPA and Korev Cornish Lager brands, which he said grew sales 16% and 14.4% respectively. Its managed pub estate, meanwhile, saw like-for-like sales growth of 3%, compared to growth in its tenanted pubs of 6.4%.
Yet operating profits fell £153k to £13.8m, which chairman Will Michelmore blamed on cost pressures, increased competition and weakening consumer confidence.
Many of these costs were “outside our control”, said Michelmore, such as the increase in National Living Wage, higher business rates and food cost inflation.
However, he admitted results had been “impacted by the lower than expected performance of the former Bath Ales beer brands [St Austell bought Bath Ales in 2016] and recently acquired managed pubs not trading at their expected levels”.
The underlying business was “strong”, he stressed, citing an increase in underlying EBITDA of 3.9% to £19.7m.
“It has been a year of consolidation and one in which we have built a stronger platform for the future of the business. The market conditions in which we operate have been a challenge but our core business remains robust,” he said, adding 2018 had seen a “promising” start and he was “cautiously optimistic” for the year to come.
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