Historic Lancashire brewery and hotel company Thwaites sees profits rise - but chairman slams budget

Daniel Thwaites, which is headquartered in Mellor Brook, near Blackburn, incorporates a brewery along with pubs, hotels and inns across England.

In half-year results for the six months to September 30, the business reported an operating profit of £9.4m, up from £8.8m last year. Turnover for the half year was £63.5m, which was up five per cent increase compared to turnover last year of £60.3m.

This Thwaites ‘Lancashire pub of the year’ is on the market

Thwaites hailed the contribution from Windermere-based Langdale Chase which reopened in November 2023 after being closed for refurbishment for more than a year. The hotel was rated 11th in the Condé Nast UK Readers’ Choice list and its successful re-launch has helped the hotels deliver an increase in profits of 15 per cent for the period.

The company said total sales in its hotels business increased by 11 per cent, but by only one per cent on a like-for-like basis. Demand for rooms softened over the summer, which Thwaites said was due to customers opting for foreign holidays to get away from the poor UK weather.

Pubs

The company's pubs got off to a slow start due to "persistent cold and wet weather throughout the spring". The European Football Championships provided a welcome boost to trade, but this was short-lived as the poor weather continued through the summer months with the wettest August for more than 20 years, meaning pub beer gardens were utilised well below their potential. Beer volumes were down year on year by two per cent.

Inns

The inns performance was less impacted by the weather as room sales continued to be strong over the summer months with sales up four per cent on last year, and with the benefit of a clear focus on cost control profits increased by 18 per cent.

What the chairman says

Looking ahead, chairman Richard Bailey said: "Since the summer there has been a marked decline in confidence, both for consumers and businesses. This has been particularly noticeable in our hotels business which has experienced a slowing in sales. One of the factors at play has been the intense speculation in relation to the new government’s first Budget; now this has been delivered it has removed some of the uncertainty. With the measures announced, it is disappointing that already the Chancellor has indicated that additional tax rises will be needed in her future budgets to meet the government’s spending plans."

“Extremely disappointing”

He added: "Consumer prices inflation is currently running at about 1.7 per cent, so it was extremely disappointing that the government has decided to increase the national living wage by 6.7 per cent and the young person’s rate by 16 per cent, which disproportionately affects hospitality.

"In addition, the increase in employers National Insurance contributions, through both an increase in the rate, and lowering the threshold at which it is paid adds a significant burden on the company.

"There is limited scope for price increases in the current economic environment, so collectively these policies force us to think differently to consider ways to mitigate these taxes. They make it less attractive to employ people and will reduce investment. Ultimately, they will be borne by working people through either lower pay awards or reduced employment."