Wolverhampton & Dudley Breweries today boosted its pubs estate after winning the £89.9 million auction of Wizard Inns.

The group unveiled a deal to buy the 63 outlets put up for sale by City financier Guy Hands and his investment vehicle, Terra Firma Capital Partners.

Acquiring the Wizard estate expands its presence in the south of England and provides a greater mix of community pubs and unbranded bars.

Chief executive Ralph Findlay said the estate was a good strategic fit with the 473 outlets that currently comprise its Pathfinder managed pubs division.

In the year to December 28, Wizard generated operating profits of £5.9 million on turnover of £43.8 million.

"The acquisition is consistent with our strategy of expanding our estate organically and geographically," Mr Findlay said.

Annual savings of £2.5 million are expected from the deal through reduced overheads and purchasing costs.

The deal is expected to improve profits and cover the cost of capital in the next financial year ending in September 2005.

Wolves operates 1,132 tenanted inns in addition to the Pathfinder pubs division, which includes the Pitcher & Piano chain, Bostin' Locals and Service That Suits Me chains.

At the time of its interim results announced last month, the company said it continued to grow like-for-like sales despite the problems facing other operators of managed pubs.

It unveiled a 5.3% hike in underlying profits to £31.7 million for the six months to March 27 after reaping the benefits of an investment programme in its core estate.

Monday June 14, 2004