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Thwaites (Daniel) Plc (THW)

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Tuesday 28 June, 2011

Thwaites (Daniel) Plc

Final Results

Chairman's Statement


During the difficult trading conditions of the past few years we have
restructured our business and are now beginning to see the benefits from our
actions. I am pleased to report the results for the year ended 31 March 2011
which reflect an improvement in underlying trading performance.

This year we have taken a long hard look at the way we are presented in the
market place. We are rightly proud of our heritage, and need to ensure that the
standards we set for ourselves live up to it. We have reviewed our corporate
branding and made some changes to present a more consistent image. This revised
branding was launched in March 2011, and will be rolled out this coming year.


Turnover for the Group dropped by 6.3% to GBP126.7m as a consequence of the
decisions that we made to sell the Stafford Hotel, to withdraw from some
marginal third party brewing contracts and to transfer our managed houses to

Operating profit fell by GBP1m to GBP12.3m but on a like for like basis rose by
GBP0.6m from GBP11.7m. Despite the challenges continuing to face the on-trade
our brewery and pubs made an operating profit of GBP7.9m (2010: GBP7.4m), an
increase of 6.8% as a result of investment in our pub estate, the growth of our
beer brands in national pub groups and tight control of costs.

Our Hotels and Inns made an operating profit of GBP5.7m (2010: GBP7.1m),
although the result for 2010 included a contribution of GBP1.6m from the
Stafford Hotel which was sold in September 2009 and therefore on a like for
like basis, operating profits increased by 3.6% due to a higher occupancy and
efficiency gains.

Due to tight control over cash, the proceeds from pub disposals outweighing
investment in acquisitions and an acceleration in our customers repaying free
trade loans, our net debt reduced from GBP48.8m at 31 March 2010 to GBP40.0m at
31 March 2011.


An interim dividend of 1.10p (2010: 1.10p) was paid in January 2011 and the
Board recommends a final dividend of 3.36p (2010: 3.36p). This would make total
dividends for the year the same as last year at GBP2.8m, which we feel is
appropriate in these times of continuing economic uncertainty.

Board changes

James Dean retired as a Director on 23 September 2010, after 10 years of
valuable service; at the same time Rupert Thompson and Arabella Yerburgh joined
the Board.

John Yerburgh retired from the Board on 7 December 2010, after 63 years of
service, and will continue to represent and take a keen interest in the Company
as Life President.

Peter Morris, who joined the Company as Managing Director in 2008, resigned
from the Board on 25 March 2011.

I would like to thank James Dean and Peter Morris for their contributions to
the Board, particularly through the difficult trading environment of recent

I was delighted to announce on 14 March 2011 the appointment of Richard Bailey
as Chief Executive Officer. Richard joined the Board as a non-executive
director in 2002, and subsequently joined the executive management team as
Business Development and Strategy Director in November 2009. The business has
been through a period of change, and I am confident that under Richard's
leadership, our plans for the future will allow us to succeed beyond this
challenging economic environment.


2011 has started well with some good weather. However, we remain cautious about
the prospects for the year ahead as the impact of the higher rate of VAT, duty
increasing well ahead of inflation, growing inflation in all other areas, and
public sector job cuts, all of which have been well publicised begin to take

We have a low level of debt, with the funds to invest in our existing
properties and to purchase additional pubs and inns as those opportunities
arise. We are actively looking for opportunities but will continue to be
careful where we invest.

We have a strong management team, and a loyal and dedicated workforce well
equipped to meet the challenges ahead. I would like to thank our staff,
customers, suppliers and shareholders for their continuing support.



28TH JUNE 2011Operating Review


This has been a year of consolidation following the significant restructuring
of the business over the last few years, ensuring we have the building blocks
in place to achieve our plans for the future.

During the year we carried out a detailed market review, talking to our
customers, suppliers, staff and also key industry participants. This review
concluded that there was a significant opportunity for the business to broaden
its public awareness and to bring more focus to the operational structure.

We have revised our corporate imagery and introduced a refined `Thwaites' logo,
building on our heritage and introducing a cleaner, more modern look and feel,
which we believe gives our name and beers more impact.

At the same time, it is our intention to re-classify the operation of the
business into four key divisions:

  * Thwaites Beer Company - our brewery and its related operations, as well as
    all of our beer sales functions, which sell into independent licensed
    operators, national pub groups and retailers onselling for home
  * Thwaites Pubs - our estate of 350 tenanted pubs;
  * Thwaites Inns of Character - our recently launched and growing inns
    business and;
  * Shire Hotels and Spas - our established group of 6 full service regional
Over the coming months we will also be updating our communications and websites
to reflect our revised branding and the structural changes to our business.

Thwaites Beer Company

We are pleased with the continuing growth and success of our cask ale range. In
particular, our Wainwright golden ale has gone from strength to strength with
volumes 91% up on the previous year. Wainwright is the first beer that we have
distributed on a national basis and with cask listings in most of the major pub
groups it is also available in bottled form in most of the major supermarkets.
Both Wainwright and Thwaites Smooth won a gold award at the Brewing Industry
International Awards in February 2011, and Wainwright is currently the fastest
growing premium bottled ale in the UK.

Our signature ale range was expanded this year to 13 different seasonal beers
as a way to promote new, authentic and interesting beers to our customers, who
have welcomed increased choice on our bars. It is a testament to the
craftsmanship, skill and experience of our brewers that this initiative has
been so successful. In addition, this year we started reciprocal ale programmes
with other regional brewers to bring further variety to our range and
customers. We have recently launched Indus IPA, a flavoursome hoppy beer, and
Old Dan, a strong copper coloured bottle conditioned ale which is a revival of
an old recipe, each of them have gained listings within national supermarkets.

Our current brewery configuration does not readily facilitate the production of
short runs of cask beers for product development purposes. As a result of this
and the resounding success of our seasonal ale programme, we will be investing
in a small craft brewery to be installed at our brewery site in Blackburn in
the autumn.

We continue to develop and grow our free trade business, with volumes
increasing by 3% year on year. The high levels of service that we are able to
offer together with the popularity of our cask and keg ales is helping to
sustain this growth against a declining market.

Last summer we carried out a review of our distribution function. We spoke to
our customers and received an overwhelmingly positive response about the
service that we provide to them through our distribution team. We also
benchmarked our cost base against that which we would incur if we outsourced
this activity to a national

distribution agency. We were pleased to conclude that our distribution
operation offered excellent customer service at a very competitive level of
cost. On the back of this decision, we have invested in a new fleet of drays in
our new livery, the first ones being delivered in June 2011. We have also
invested in a temperature controlled warehouse facility at our Shadsworth depot
to ensure that our cask beer is stored at its optimum temperature, allowing it
to reach our customer in first class condition.

Thwaites Pubs

We have an estate of 350 pubs, which following the completion of our managed
house transfer programme in April 2011, operate universally on a tenancy basis.
Our pub estate covers a broad area from Cumbria to Birmingham, and from North
Wales to East Yorkshire.

This has been another difficult year in the tenanted trade, with on-trade
volumes in our trading area continuing to decline at around 9%. This, together
with the increase in VAT to 20% in January 2011, the retention of the
government's duty escalator on beer, the squeeze on consumer spend due to the
economic environment and general cost inflation have provided a harsh
background in which our tenanted pubs have been trading. The severe weather in
December 2010 also had a detrimental impact on trade for many of our pubs
during the key Christmas trading period. To counter this we have continued to
support our tenanted pubs with a range of packages and incentives to help
maintain their profitability during these challenging times for the pub

The lack of availability of finance and the general poor publicity surrounding
the pub sector has made attracting tenants to our properties difficult. We have
introduced a range of new flexible agreements in order to ensure as many of our
pubs as possible continue trading. In particular, we launched our `WayInn'
agreement, which provides a lower risk entry to the pub market for individuals
who either do not have the necessary funds to invest in taking on a tenancy or
are risk averse. This revenue sharing model has been rolled out into 6 pubs and
the initial results are promising.

In March 2011, we welcomed many of our tenants to The Cottons Hotel and Spa in
Knutsford, for our annual tenanted awards ceremony. We were delighted by the
quality of the submissions and made awards in 7 categories, our congratulations
go to the Old Horns Inn, Higher Bradfield which won Pub of the Year.

We have an excellent team of Area Business Managers, who work hard with
existing tenants to develop and support their businesses and to recruit new
tenants into our business. An indication of the strength of our team was
highlighted in December by Carolyn Matthews who was awarded the prestigious
ALMR tenanted area business manager of the year award in London.

We have carried out a programme of 33 investment projects in our pub estate
during the year and have achieved returns comfortably in excess of our hurdle
rate of 20%. Based on this performance, we have a pipeline of a further 75
investment projects which we will seek to complete in the coming year. The
largest investment project in the year was the conversion of The Hordens,
Feniscowles, into a specialist fish and chip restaurant, takeaway and pub. This
project incurred a total investment of over GBP0.5m and reopened in March 2011,
as the Oyster and Otter.

We have continued to churn the bottom end of our pub estate actively during the
year, and sold 29 pubs that were not well placed to make satisfactory future
returns at a net profit of GBP0.1m.

We acquired 2 tenanted pubs during the year, the Hollybush, near Leek in
Staffordshire and The Roaches Lock in Mossley, near Manchester. Both pubs have
been integrated successfully into our pub estate and are trading well. We
continue to seek further good quality tenanted pubs with balanced income
streams. We believe that in the forthcoming year more opportunities to acquire
high quality tenancies will arise.

The combined effect of continued investment in our core properties, disposing
of pubs in the tail of our estate and acquiring good quality tenanted pubs will
ensure over the medium term that we have a high quality, sustainable pub

Thwaites Inns of Character

In 2009 we transferred a small group of managed houses with bedrooms into a
newly formed Inns division. These inns have a busy bar as the hub, together
with a quality food offering and comfortable accommodation. They are managed by
the Shire Hotels & Spas management team who are able to bring to bear their
hospitality skills to provide a high quality offering with excellent standards.

On the back of the success of this initial inns collection, we took the
decision to grow this division over the next few years under the banner of
`Thwaites Inns of Character' which was launched earlier in the year. A new
website was developed to showcase these properties.

In September 2010, we took the Golden Lion in Settle back under management and
transferred it into the Inns division. It has since undergone a GBP0.5m
refurbishment programme, completed in early spring, re-opening as The Lion at
Settle. The restaurant at the Millstone in Mellor also underwent a significant
refurbishment during the year to refresh its offering.

Whilst our current inns are all based in the North of England, it is our
intention to expand the collection across the UK, using the Shire Hotel & Spas
infrastructure and resources as a development platform. We completed our first
acquisition on 4 April 2011, of The Fleece, Cirencester, which is located in
the Cotswolds. The property, which is in need of investment but which enjoys a
high level of goodwill in the area will undergo refurbishment before being
re-launched as a `Thwaites Inn of Character' in autumn 2011.

Shire Hotels and Spas

We own and operate six full service four star regional hotels, which are
geographically spread across England.

The performance of the hotels has been adversely affected by the economic
recession which resulted in a drop in corporate demand as companies reduced
their travel and conference budgets. Our initial response to the market decline
was to reduce our rates to attract more leisure and opportunistic contract
business, whilst working hard to maintain our standards and the quality of our

In the early part of the year we carried out a review of our hotel business
which highlighted opportunities for us to manage our room rates better in
response to market conditions and provided a series of initiatives to improve
our efficiency and help recover profits. This review has helped us to increase
our occupancy levels by over six percentage points compared to last year,
although average room rates have fallen slightly due to the competitive nature
of the market place.

Like for like sales in the hotels increased by 3.7% compared to last year,
driven by the return of corporate business, although demand for residential
conferences remains weak.

We are committed to maintaining the high quality of our hotel properties with
an ongoing refurbishment programme. In the spring we completed a full
refurbishment of the spa changing rooms and a number of bedrooms at The North
Lakes Hotel and Spa, Penrith.

People and community

A list of long serving employees is included in the accounts, and we would like
to thank them for their commitment and contribution to the company. Our people
are at the core of our business and our future success will be delivered
through them.

The communities in which we operate are vitally important to us, particularly
in our North West heartland. During the year we were delighted to join with
other local businesses to support the development of the Blackburn Youth Zone.
This will be a superb facility for youngsters from the Blackburn area to meet
and develop their sporting and social skills in a safe and supportive
environment and has been very successfully piloted in other communities in the
North West.

Summary and outlook

We are pleased with the results we have achieved in the year ended 31 March
2011, in what continues to be an extremely challenging economic environment.
Whilst the economic landscape does not appear likely to change significantly in
the short term, we have the building blocks in place to deliver our plans and
take advantage of opportunities once the economic environment improves.

Financial Review


Turnover for the year ended 31 March 2011 fell by 6.3% to GBP126.7m. Turnover
in the Beer Company and Pubs fell by 5.6% to GBP90.7m due to the transfer from
managed pubs to tenancies and pub disposals, together with the exit from
marginal production contracts. Turnover in the Hotels and Inns fell by 7.9% due
to the sale of the Stafford Hotel in September 2009. Excluding the impact of
the Stafford, like for like sales grew by 3.7%.

Operating profit before exceptional items fell by GBP1m to GBP12.3m. In the
year to 31 March 2010, the Stafford Hotel contributed GBP1.6m to operating
profit prior to its disposal. Excluding the impact of the Stafford, like for
like operating profit increased by 5.1%.

Interest payable

Net interest payable fell by GBP0.5m to GBP5.9m, due to a reduction in bank
facilities from GBP55m to GBP30m and a reduction in net debt from GBP48.8m to
GBP40.0m. Interest costs are high compared to the level of facilities and net
debt due the impact of GBP75m of fixed interest rate swaps. The Group will
continue to incur a raised level of interest cost on the swaps until LIBOR
increases to pre-recessionary levels.


The tax charge on profit for the year before exceptional items was GBP1.7m, an
effective rate of 24%, due to a GBP0.4m release of deferred tax as a result of
the reduced future corporation tax rate of 26%.

Earnings per share

Earnings per share increased to 8.6p from a loss per share, after exceptional
items, of 1.6p. Earnings per share before exceptional items increased from 5.7p
to 8.6p.


An interim dividend of 1.1p has been paid and the Board recommends a final
dividend of 3.36p, which will make a total of 4.46p for 2011 (2010: 4.46p).

Cash flow and financing

The Group's net borrowing reduced by GBP8.8m, from GBP48.8m at 31 March 2010
down to GBP40.0m at 31 March 2011.

The Group made contributions to the pension scheme of GBP2.7m (2010: GBP4.5m).
Whilst this scheme was closed in August 2009, the Group is committed to funding
the deficit on the scheme which was GBP9.7m at 31 March 2011, down from
GBP14.7m at 31 March 2010.

The Group reduced its bank facilities during the year from GBP55m to GBP30m,
which in addition to GBP45m of long term debt means the total facilities are
GBP75m. These total facilities of GBP75m should be sufficient to meet the
future needs of the Group.


During the year we sold 29 pubs and four ancilliary properties for a total of
GBP6.1m, which generated a profit over book value, after disposal costs, of
GBP0.1m. We also acquired two pubs at a cost of GBP1.2m.

In line with our accounting policy, 20% of our properties were subject to
revaluation, and an impairment review was carried out on the rest of the
property estate. This resulted in a reduction in the total value of our
property portfolio of GBP4.2m of which GBP4.1m was a reduction in the
revaluation reserve and GBP0.1m was charged to the profit and loss account.

Treasury policy and financial risk management

Treasury policies are subject to Board approval. All borrowings are in sterling
and comprise a mixture of fixed interest loans and facilities carrying LIBOR
related floating rates. The Group has interest rate swaps for GBP75m where it
is committed to pay the difference between LIBOR and fixed interest rates.


31ST MARCH 2011


                                             2011        2010        2010    2010
                                            GBP'm       GBP'm       GBP'm   GBP'm
                                            Total      Before Exceptional   Total
                                           ______ exceptional       Items _______
                                                        items   _________        
Turnover - continuing                       126.7       135.2           -   135.2
Cost of sales                              (93.1)     (101.2)           - (101.2)
                                           ______   _________   _________ _______
Gross profit                                 33.6        34.0           -    34.0
Distribution costs                         (13.9)      (13.8)           -  (13.8)
Administrative                              (7.4)       (6.9)       (0.8)   (7.7)
Property impairment                             -           -      (18.2)  (18.2)
                                           ______   _________   _________ _______
Operating profit                             12.3        13.3      (19.0)   (5.7)
Property disposals                            0.1       (0.4)           -   (0.4)
Profit on sale of                               -           -        14.3    14.3
                                            _____    ________   _________  ______
Profit before interest                       12.4        12.9       (4.7)     8.2
Net interest payable                        (5.9)       (6.4)           -   (6.4)
Net interest on                               0.5       (0.8)           -   (0.8)
pension liability                                                                
                                           ______    ________   _________ _______
Profit (loss) on                              7.0         5.7       (4.7)     1.0
ordinary activities                                                              
before taxation                                                                  
Taxation on profit                          (1.7)       (2.1)         0.1   (2.0)
(loss) for the year                                                              
                                           ______    ________   _________ _______
Profit (loss) for the                         5.3         3.6       (4.6)   (1.0)
financial year -                                                                 
attributable to                                                                  
                                           ______ __________  _________   _______

Dividends :                                                         2011   2010
Ordinary paid per share 1.10p (2010 - 1.10p)                         0.7    0.7
Ordinary recommended per 25p share 3.36p (2010 - 3.36p)              2.1    2.1
Earnings per ordinary share                                         8.6p (1.6)p

The final dividend of 3.36p per ordinary share in respect of the year ended
31st March 2011 will be paid on 1st August 2011 to shareholders on the register
at 8th July 2011.


GROUP BALANCE SHEET                                                                2011      2010
At 31st March 2011                                                                GBP'm     GBP'm
_____________________________________________________________________________ ________  ________ 
Fixed Assets                                                                                     
Tangible assets                                                                   287.2     296.9
Investments                                                                        11.4      13.5
_____________________________________________________________________________  ________  ________
                                                                                  298.6     310.4
Current assets                                                                                   
Stocks                                                                              4.5       4.5
Debtors                                                                            16.0      16.2
Cash and bank balances                                                             10.0       6.7
_____________________________________________________________________________  ________  ________
                                                                                   30.5      27.4
_____________________________________________________________________________  ________  ________
Creditors due within one year                                                                    
Trade and other creditors                                                        (23.8)    (22.5)
_____________________________________________________________________________  ________  ________
                                                                                 (23.8)    (22.5)
_____________________________________________________________________________  ________  ________
Net current assets                                                                  6.7       4.9
_____________________________________________________________________________  ________  ________
Total assets less current liabilities                                             305.3     315.3
Creditors due after one year                                                                     
Loan capital                                                                     (50.0)    (55.5)
Provisions for liabilities and charges                                                           
Deferred taxation                                                                 (6.1)     (6.7)
_____________________________________________________________________________  ________  ________
Net assets excluding pension liability                                            249.2     253.1
_____________________________________________________________________________  ________  ________
Net pension liability                                                             (9.7)    (14.7)
_____________________________________________________________________________  ________  ________
Net assets including pension liability                                            239.5     238.4
_____________________________________________________________________________  ________  ________
Capital and reserves                                                                             
Called up share capital                                                            15.8      15.8
Revaluation reserve                                                                96.6     100.0
Profit and loss account                                                           127.1     122.6
_____________________________________________________________________________  ________  ________
Equity shareholders' funds                                                        239.5     238.4
_____________________________________________________________________________  ________  ________



For the year ended 31st March 2011

____________________________________________________________________________      2011       2010
                                                                                 GBP'm      GBP'm
                                                                              ________  _________
Cash flow from operating activities                                               19.8       19.9
Returns on investments and servicing                                             (6.3)      (6.1)
of finance                                                                                       
Tax paid                                                                         (1.3)      (0.7)
Capital expenditure and financial investment                                     (0.6)        0.1
Acquisitions and disposals                                                           -       74.7
Equity dividends paid                                                            (2.8)      (0.7)
____________________________________________________________________________  ________   ________
Cash inflow before financing                                                       8.8       87.2
Financing - decrease in debt                                                     (5.5)     (82.5)
____________________________________________________________________________  ________   ________
Increase in cash                                                                   3.3        4.7
____________________________________________________________________________  ________   ________
Reconciliation of net cash flow to movement in net debt                                          
Increase in cash                                                                   3.3        4.7
Cash outflow from decrease in debt                                                 5.5       82.5
____________________________________________________________________________  ________   ________
Movement in net debt in the year                                                   8.8       87.2
Net debt at beginning of year                                                   (48.8)    (136.0)
____________________________________________________________________________  ________   ________
Net debt at end of year                                                         (40.0)     (48.8)
____________________________________________________________________________  ________   ________

Analysis of changes in net debt :                         At 31st                   At 31st
                                                            March   Other     Cash    March
                                                             2011 Changes    Flows     2010
                                                            GBP'm   GBP'm    GPB'm    GBP'm
Cash at bank and in hand                                     10.0       -      3.3      6.7
Debt due within one year                                        -       -        -        -
Debt due after one year                                    (50.0)       -      5.5   (55.5)
________________________________________________________   ______ _______  _______   ______
________________________________________________________   (40.0)       -      8.8   (48.8)
                                                           ______ _______  _______   ______

Notice of Meeting

Notice is hereby given that the Annual General Meeting of the Company will be
held at Thorpe Park Hotel & Spa, 1150 Century Way, Thorpe Park, Leeds, West
Yorkshire, LS15 8ZB on Wednesday 27th July 2011 at 12.00 noon for the
transaction of the following business:

Ordinary Business

To consider and, if thought fit, pass the following resolutions which will be
proposed as ordinary resolutions.

 1. To receive and adopt the accounts for the year ended 31st March 2011 and
    the reports of the directors and the auditor, and to declare a final
 2. To re-elect Mr P.A. Boddy as a director.
 3. To re-elect Mr R.G.R. Thompson as a director.
 4. To re-elect Miss A.M.R. Yerburgh as a director.
 5. To confirm the remuneration of the directors.
 6. To re-appoint KPMG Audit Plc as auditor and authorise the directors to
    determine their remuneration.
Special Business

To consider, and if thought fit, pass the following resolutions of which
resolutions 7 and 9 will be proposed as

ordinary resolutions and resolution 8 as a special resolution.

 7. THAT, for the purposes of section 551 of the Companies Act 2006 (the Act)
    the directors of the Company be and are hereby generally and
    unconditionally authorised to exercise all powers of the Company to allot
    equity securities (within the meaning of section 560 of the Act) up to an
    amount equal to the aggregate nominal amount of the authorised but unissued
    share capital of the Company provided that this authority shall expire
    (unless previously renewed, varied or revoked by the Company in general
    meeting) at the conclusion of the next annual general meeting of the
    Company, save that the Company may before such expiry make an offer or
    agreement which would or might require relevant securities to be allotted
    after such expiry and the directors of the Company may allot relevant
    securities in pursuance of such an offer or agreement as if the authority
    conferred hereby had not expired
This authority is in substitution for any and all authorities previously
conferred upon the directors for

the purposes of section 551 of the Act, without prejudice to any allotments
made pursuant to the terms

of such authorities.

 8. THAT, subject to the passing of resolution 7 above, the directors of the
    Company be and are hereby empowered pursuant to section 570 of the Act to
    allot equity securities (within the meaning of section 560 of the Act)
    pursuant to the authority conferred by resolution 7 above as if section 561
    of the Act did not apply to any such allotment provided that the power
    conferred by this resolution shall be limited to:
 i. the allotment of equity securities for cash in connection with an issue or
    offer of equity securities (including, without limitation, under a rights
    issue, open offer or similar arrangement) to holders of equity securities
    in proportion (as nearly as may be practicable) to their respective
    holdings of equity securities subject only to such exclusions or other
    arrangements as the directors of the Company may consider necessary or
    expedient to deal with fractional entitlements or legal or practical
    problems under the laws of any territory, or the requirements of any
    regulatory body or stock exchange in any territory; and
ii. the allotment (otherwise than pursuant to resolution 8.1) of equity
    securities for cash up to an aggregate nominal amount of GBP787,500.
The power conferred by this resolution 8 shall expire (unless previously
renewed, revoked or varied by the Company in general meeting), at such time as
the general authority conferred on the directors of the Company by resolution 7
above expires, except that the Company may at any time before such expiry make
any offer or agreement which would or might require equity securities to be
allotted after such expiry and the directors of the Company may allot equity
securities in pursuance of such an offer or agreement as if the authority
conferred hereby had not expired.

 9. To authorise the Company generally and unconditionally to make market
    purchases (within the meaning of section 693(4) of the Companies Act 2006)
    of ordinary shares of 25 pence each in the capital of the Company provided
 i. The maximum aggregate number of ordinary shares that may be purchased is
    6,300,000. Representing 10% of the issued share capital of the Company;
ii. the minimum price (excluding expenses) which may be paid for each ordinary
    share is 25 pence.
iii. the maximum price (excluding expenses) which may be paid for each ordinary
    share is an amount equal to 105 per cent of the average of the middle
    market quotations for an ordinary share of the Company (as derived from the
    PLUS Markets website) for the five business days immediately preceding the
    day on which the purchase is made; and
iv. unless previously renewed, varied or revoked, the authority conferred by
    this resolution shall expire at the earlier of the conclusion of the
    Company's next Annual General Meeting and the date which is six months from
    the end of the Company's next financial year save that the Company may,
    before the expiry of the authority granted by this resolution, enter into a
    contract to purchase ordinary shares which will or may be executed wholly
    or partly after the expiry of such authority.

Resolution 7 - Authority to allot relevant securities

The Company requires the flexibility to allot shares from time to time. The
directors are limited as to the number of shares they can at any time allot
because allotment authority continues to be required under the Companies Act
2006 (the Act).

Accordingly, resolution 7 would grant this authority (until the next Annual
General Meeting or unless such authority is revoked or renewed prior to such
time) by authorising the directors (pursuant to section 551 of the Act) to
allot relevant securities up to an amount equal to the aggregate nominal amount
of the authorised but unissued share capital of the Company as at 31 March
2011. The directors believe it to be in the interests of the Company for the
Board to be granted this authority, to enable the Board to take advantage of

opportunities which may arise in the future.

Resolution 8 - Disapplication of statutory pre-emption rights

This resolution seeks to disapply the pre-emption rights provisions of section
561 of the Act in respect of the allotment of equity securities for cash
pursuant to rights issues and other pre-emptive issues, and in respect of other
issues of equity securities for cash up to an aggregate nominal value of
GBP787,500, being an amount equal to approximately 5 per cent of the current
issued share capital of the Company. If given, this power will expire at the
same time as the authority referred to in resolution 7. The directors consider
this power desirable due to the flexibility afforded by it.

Resolution 9 - Authority to make market purchases of shares

Resolution 9 seeks authority for the Company to make market purchases of its
own ordinary shares. If passed, the resolution gives authority for the Company
to purchase up to 6,300,000 of its ordinary shares, representing 10 per cent of
the Company's issued ordinary share capital.

Resolution 9 specifies the minimum and maximum prices which may be paid for any
ordinary shares purchased under this authority. The authority will expire at
the conclusion of the Company's next Annual General Meeting in 2012 or, if
earlier, the date which is six months from the end of the Company's financial
year which commenced on 1st April 2011.

Any shares purchased under this authority will be cancelled.

As a member of the Company entitled to attend and vote at the meeting convened
by this notice you are entitled to appoint another person as your proxy to
exercise all or any of your rights to attend and to speak and vote in your
place at the meeting. Your proxy need not be a member of the Company.

You may appoint more than one proxy in relation to the meeting convened by this
notice provided that each proxy is appointed to exercise the rights attached to
a different share or shares held by you. You may not appoint more than one
proxy to exercise rights attached to any one share.

By order of the Board Mrs S. I. Woodward, A.C.I.S.


Star Brewery,


28 June 2011


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