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Refurbishments pay dividend for Maclay Group

MACLAY Group, the company behind Glasgow's Clockwork Beer Company and Clerk's Bar in Edinburgh, has lifted its average pub profit by six per cent during a transitional period for the firm.

New accounts at Companies House show Maclay, which runs 26 pubs across Scotland, drove a 1.3 per cent increase in like for like sales across its estate in its latest financial period.

The company served up the results, which cover the 16 months ended February 1, while spending £1 million to refurbish three key venues: Balloch's Tullie Inn, The Southsider in Edinburgh and Linlithgow's West Port Hotel.

The firm said the closure of several pubs for refurbishments had been a key factor as operating profits dropped to £604,616- a 15.8 per cent decline on the £718,302 booked in 2012.

Pre-tax losses narrowed to £169,895 from £737,379, though Maclay noted the loss for the prior year came after a property impairment charge of £679,654.

Maclay explained the change in accounting period stemmed from shareholders' wish to move to a January year-end because of the seasonality of the pub sector.

The latest accounts include two winter seasons, traditionally the toughest period for the sector, which Maclay said made comparisons between the two financial periods difficult.

Turnover for the period was booked at £13.6 million, compared with £10.4 million for the year ended September 29, 2012.

Managing director Steve Mallon insisted the company was reaping the benefits of its investment in its estate. He said: "The great thing is the confidence we have shown in making the decisions is already paying off, because we are getting the response immediately out of these works, so that augurs well for the year ahead.

"Underlying sales are growing and indeed pub profitability [is growing] when you set aside the closed units. It's coming through quite well actually, which in a tough market is quite happening."

Maclay said the improvements to its estate had left it well placed to capitalise on events such as Glasgow 2014, Edinburgh Festival Fringe and the Ryder Cup at Gleneagles in September.

Mr Mallon said those events follow a welcome return in consumer confidence, which he said the firm has been detecting since the turn of the year.

Mr Mallon said: "The trend of encouraging confidence has continued into 2014, which is very important.

"We are obviously in a market where it is all about discretionary spend and treats.

"People have been knuckling down on that in the last six years or so, and finally the numbers are telling us they are starting to treat themselves a bit more than they have of late."

He also noted steps taken by the company to get tough on cost management during the downturn were paying off, stating that the operation is now "leaner and tighter".

Mr Mallon added: "We're hopeful of getting a bit of progress on the margin and the top line, which should manifest itself in a trend of improving profitability in the year ahead."

Maclay has continued its investment programme since year-end by opening two outlets in Glasgow: The Hope next to Central Station and The Raven on Renfield Street.

Mr Mallon said both are performing well, and said further investment is being lined up.

The latest accounts show Maclay employed an average of 540 staff over the latest financial period, up from 524 before.

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