Pubco Marston’s cheered by improved performance

WOLVERHAMPTON pubco Marston’s has seen a small improvement in performance in line with expectations.

In a trading update ahead of its results for the year ended September 29, 2012, the firm said its performance had been resilient against the challenging economic backdrop and the very wet weather during the summer months.  

In its managed pubs, like-for-like sales were 2.2% ahead of last year including like-for-like food sales growth of 2.4% and like-for-like wet sales growth of 2.1%.  Operating margins were slightly ahead of the previous year.  

It completed 25 new pub-restaurants with investment returns remaining strong and above target. The impact of its new-build programme over the past three years was said to be significant, substantially increasing the firm’s exposure to the informal dining market and contributing to continuous improvement in the quality of the pub estate.

“We aim to continue to develop our managed pub estate at a similar rate of growth for the foreseeable future, and have a clear development pipeline including 20-25 sites planned for completion in the 2013 financial year subject to planning,” it said.

In its leased, tenanted and franchised pubs, operating profits are estimated to be around 3% ahead of last year.  This improvement is principally due to the growth of the franchised estate, which now constitutes around 500 pubs. Pubs operated under the traditional leased and tenanted model contributed profits in line with last year.  

In brewing, the firm’s own-brewed beer volumes are 2% higher than last year with growth in both premium cask and bottled ales.  

Following second half valuations, the firm’s pub estate and other properties have been valued at £2bn, which it said was in line with that reported in the 2011 accounts.

The managed estate has increased in value by £163m reflecting value created through building new pub-restaurants and the higher quality of the managed estate generally.

The new-build sites constructed since 2009 have been valued at a premium to build cost of over 50%.

The value of the tenanted and franchised estate has reduced by £186m reflecting the lower multiples being achieved from the sale of tenanted pubs in the current market.
It said for accounting purposes, revaluation surpluses were recognised in the revaluation reserve, while some deficits would be recognised in the income statement.

Accordingly, there will be a pre-tax exceptional charge of around £215m through the income statement. This will be accounted for in the year ended September 29, 2012.
 
Ralph Findlay, Chief Executive Officer, said: “We have been encouraged by the performance of all areas of our business this year despite the challenging consumer environment and the poor weather.  

“Our continued focus on offering value for money to our customers together with high service and quality standards is appropriate for current market conditions, and is generating profitable growth with improved returns.

“The recent valuation exercise demonstrates the inherent quality of our pub estate and in particular highlights the significant value created by our new-build pub-restaurants.”

The firm has also announced the appointment of Peter Dalzell as a main board director with immediate effect. This follows the firm’s decision to bring together the management of all of its pubs in one team.

It said Stephen Oliver would continue to report to Mr Findlay as managing director of Marston’s Beer Company.