Marston’s benefits from stronger second half
BREWER and pub operator Marston’s has seen a strong second half, boosted by good weather as it looks to capitalise on growth opportunities.
In a pre-close statement, Ralph Findlay, Chief Executive, said: “We are encouraged by our performance in the second-half year after challenging weather in the first half.
“The performance of our new-build pubs is very strong. We have developed plans to accelerate the programme and intend to dispose more aggressively of lower-end pubs in order to pursue our key objectives of sustainable growth, improving returns and reducing leverage over time.
“We are confident that we are significantly improving the quality of our pub estate for both today’s and tomorrow’s consumer.”
In Destination and Premium pubs, it said like-for-like sales were 2.2% ahead of last year including like-for-like food sales growth of 3.7% and wet like-for-like sales growth of 0.2%. Over the last 11 weeks like-for-like sales have grown by 2.6%. Operating margins are expected to be slightly ahead of last year.
In its Taverns community pubs, profits for the full year are expected to be behind last year due to poor weather in the first half-year, a greater than anticipated level of disposals and a more subdued performance in our tenanted pubs in line with market trends. The performance of its managed and franchised pubs has been robust with like-for-like sales in line with last year and up 2% in the second half-year.
In its Leased pubs, profit for the year is expected to be in line with last year, with an improved performance in the second half year.
In Brewing, its own-brewed beer volumes are 6% higher than last year, outperforming an ale market down 3%. Premium cask ale volumes were up 4% in the year and bottled ale was up 19%. It continues to lead the market in both of these segments.
“We are focussing on significantly improving the quality of our pub estate appropriate for both current and future consumer needs,” it added.
It has completed 22 new pub-restaurants in the year with returns remaining strong. Over the last five years its national new-build pub programme has been successful, generating strong returns and improving the quality of the pub estate.
It said the 2012 estate valuation also indicated that the new-build pubs were valued at 50% above build cost, generating significant value to shareholders.
As a result of this success it is proposing to accelerate the new-build programme and is targeting 25-30 openings over the next few years, with a visible pipeline of sites to 2017.
It has disposed of 130 pubs and other assets in the year generating proceeds of around £50m, higher than we originally anticipated. A more aggressive churn of the estate will improve returns over time, assist the funding of the new-build programme and reduce exposure to the tenanted sector, it added.
It aims to achieve disposal proceeds of between £60-70m for the financial year 2014, principally from the Taverns estate.
