Brulines thirsty for growth

Dec 12 2007 by Graeme King, The Journal

PUB performance business Brulines has unveiled profits up nearly 60% to £2.18m after a successful six months.

The Stockton company, which floated on the stock exchange just last October, is expanding fast with a series of acquisitions and organic growth.

The details of Brulines’ latest acquisition, of Nucleus Data Holdings from North Yorkshire, have been scrutinised by the Office of Fair Trading (OFT) but now the deal appears close to completion.

Yesterday, chief executive James Dickson said people could still raise objections to the OFT’s decision not to refer the Nucleus deal to the Competition Commission by seeking a judicial review, but he was not aware of anyone with concerns about it.

Meanwhile, Brulines is looking at different routes to expanding further, with potential new lines in measuring soft drinks in pubs as well as wines and spirits, and even the temperature of fridge freezers.

Though overall sales at Brulines in the six months to September 30 dropped 13% to £8.06m, the company said this was due to comparisons with a particularly busy period of installations in 2006 and outweighed by an increase in margins from 42.8% to 49.8%.

Mr Dickson said: “The company’s results are bang in line with expectations, with profits on target, and margins are back in line with where they should be at 49%.

“With the smoking ban, the lack of a summer and pressure on consumer spend, it’s not a particularly good time for the pub trade, but it’s good for us as they need better information to squeeze profit out of their businesses.

“People are prepared to spend the money on our services, as they get a return on it. Our research shows a new installation from us delivers a 7% uplift in revenue.”

He said the Nucleus deal should go through shortly.

“We have an OFT decision not to refer the deal to the Competition Commission. Now we are in a four-week period where any aggrieved party could try to seek a judicial review, but that would require them to show the OFT had not done its job.

“The vast majority of our customers were happy with the deal, as it provides benefits. Our customers are very big businesses, with significant buying power, and we have never historically tried to hold them to ransom – nor would we consider doing so.”

Brulines is also looking at expanding its gaming machine measurement business into motorway services, casinos and holiday resorts.