Hardys & Hansons has posted a fall in full year pre-tax profits to GBP14.8m (US$25.6m), compared with a profit of GBP15.2m for the same period last year, on the back of weakness in its managed house business.

Chairman James Kerr-Muir said: "The relative weakness in managed house like for like sales in the second half of last year has continued into the current financial year. The business is focussed on tailoring a competitive response at outlet level and operational efficiencies, and on delivering profits from the new properties acquired in 2005. Tenanted and free trade performance continues to be strong. Overall, trading in the current year is in line with expectations.

As forecast in a trading statement in October, a combination of cost increases and a deterioration in like for like trading in the second half led to a 1% reduction in operating profit to GBP14.3m. However, driven by acquisitions of additional public houses, sales were 7% higher at GBP81.5m.

Adjusted profit before tax at GBP14.8m  was 3% below last year and adjusted EPS fell from 42.0 pence to 40.6 pence."

Kerr-Muir said: "Increased costs and competitor activity, together with the upfront revenue costs relating to the substantial investment programme achieved in 2005, have inhibited profit growth.

"In the managed house estate, the company achieved a 0.8% increase in like for like sales, and an improvement of 0.6% in gross margins. This was however insufficient to cover the substantial increases in costs. Our tenanted and free trade businesses traded well with sales and profit growth achieved across each channel."

On Brands and Brewing, he said: "During the year, we raised our brand profile through supply to high profile accounts, the most notable of which is the Nottingham Arena, one of the largest entertainment venues in the East Midlands. Sales of our own brewed draught beers declined by 1% against a market decline of 5.6% as calculated by market research consultants ACNielsen. Our Cool, Olde Trip and Cellarman's Cask brands have performed well."

As for an AIM listing he said: "The company has reviewed its market listing and believes that there are significant advantages to shareholders from transferring the company's ordinary and preference shares to trading on the Alternative Investment Market of the London Stock Exchange (AIM).

"The board believes that AIM is a more appropriate market for the company that should lead to a simplification of administration requirements and will enable the company to agree and execute transactions more quickly should any acquisition or other development opportunities arise in the future. The board also believes there may be tax advantages to many private shareholders arising from the transfer to AIM.

"The board therefore proposes to delist the company's ordinary shares from the Official List of the UK Listing Authority and to apply for them to be admitted to trading on AIM."