Pub chain feels the draught

IRISH PUB owner Séamus Murphy was left drowning his sorrows this week after shares in his London-listed Pub ’n’ Bars chain fell in value, in spite of the group reporting an increase in sales and profits for the first six months of this year.

The pub chain’s share price fell by just under 3 per cent to 8.75 pence following the publication of interim results on Tuesday. Just 12 months ago, the shares were a frothy 41 pence, but the poor weather over the summer and a ban on smoking in pubs has seen sentiment go flat.

Trading was good for Pubs ’n’ Bars in the first six months. Revenues rose by 26 per cent to £11.2 million, while its pretax profit was up 7 per cent to £580,000.

Murphy chairs Pubs ’n’ Bars and owns 10 per cent of the business, which has a chain of 105 pubs in England.

Born in Roscommon, he emigrated to the UK in 1964 and worked in the construction trade until the 1980s, when he tried his luck in the pub game. Pubs ’n’ Bars made its market debut on the AIM market in 1999.

With a market cap of just £3.5 million and an asset value roughly seven times the level of its share price, might Murphy be tempted to take it private?

“Not at the moment,” he told me. “I don’t know if the time is right . . . I doubt it. It’s a difficult time to go borrowing. Money is scarce. We’re hanging on in and doing the best we can.”