Pub operator Ei Group’s profits rise thanks to drinks sales boost
Pub chain Ei Group has posted a modest rise in pre-tax profit for the half year thanks to continued growth in drinks sales.
Ei, which is the largest owner and operator of pubs in the UK, posted pre-tax profits of £59m in the six months to the end of March, up from £57m in the same period last year.
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The firm’s earnings before interest, tax, depreciation and amortisation also ticked up to £140m. Shares in Ei Group rose more than five per cent this morning.
The robust trading was driven by like-for-like sales growth of six per cent in the company’s managed pubs, as mild weather helped drive punters to their local.
“Despite an environment of unprecedented political uncertainty and inflationary pressure from increases in the national minimum and living wage, consumers continue to support their local pub,” said chief executive Simon Townsend.
“This consumer resilience, combined with excellent operational execution and effective capital investment, provides us with the confidence that we can maintain our growth momentum for the year as a whole, despite some challenging comparative trading periods ahead of us in June and July.”
Ei has embarked on a strategy to shift its focus away from leased and tenanted pubs towards managed pubs that are owned and operated by the business.
The firm said it had added 100 pubs to its managed portfolio in the last year, with plans to grow this further by the end of the year.
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Despite this, Ei still pulls in the majority of its revenue from leased and tenanted pubs.
Earlier this year Ei agreed a £348m deal to sell off the majority of its commercial properties to US hedge fund Tavern Propco in a bid to cut debt and boost shareholder returns.