Wolverhampton & Dudley Breweries expects results for the year to October 1 to be in line with forecasts, shareholders were told yesterday.

In a trading update prior to the group's close period, it said trading over the summer had been satisfactory and ahead of last year, notwithstanding the benefit of Euro 2004 in the previous year.

In the 51 weeks ended September 24, total like-for-like sales in the group's Pathfinder Pubs and the Union Pub Company were 2.8 per cent ahead of last year.

In W&DB brands, brewed beer volumes increased by 5.2 per cent. Across the group margins were ahead of last year despite significant cost increases.

Turning to the outlook, the group added: "In the coming financial year, staff costs will increase by some £2 million as a consequence of the higher minimum wage, and we expect energy costs to rise by over £5 million as a result of prices which are at least 50 per cent ahead of last year.

"Additionally, a more challenging consumer environment is widely reported. We aim to continue to offset rising costs by improving productivity, demonstrating the strength of our business model and the benefits of flexibility.

"We have a strong balance sheet and relatively conservative gearing which enables us to consider acquisition opportunities as they arise in a consolidating sector."