Wolverhampton & Dudley’s (W&D) pubs estates have defied the summer downturn seen by many in the sector and reported sales growth for the year to 2 October – but warned that margins will be hit next year by increasing costs.

The company said trading over the summer was strong, with Pathfinder pubs seeing like for like sales increase from 2.8 per cent in the first half to 3.6 per cent in the 26 weeks to 25 September, with a full year increase of 3.2 per cent.

Like for like sales at its Union Pub Company division were up 4.3 per cent for the year.

However, chief executive Ralph Findlay has warned that increased costs for energy, minimum wage and Sky TV could add up to £5m next year.

W&D aims to open a further 20 Pathfinder pubs in the coming financial year and is currently finalising a revaluation of 75 per cent of its property assets – carried out every five years as part of its accounting policy – which is expected to see a net increase of more than £160m since the last valuation in 1999. The remaining 25 per cent of assets will be revalued next year.

“We have again demonstrated that our focus on good quality community pubs and great beers is paying dividends with the planned returns on our investment programme being achieved,” said Findlay.

“The pub sector is mature and under legislative and cost pressures, but we are performing well and developing good momentum.”

Preliminary results for the 53-week period to 2 October 2004 will be released on 3 December.