Marston’s sees 4.6% rise in pre-tax profits

WEST Midlands pubco Marston’s has reported group revenue up 0.9% to £650.7m for the year to October 2, which compares with £645.1m last year.

The Wolverhampton firm, which also announced a 4.6% rise in pre-tax profits to £73.5m (2009: £70.3m), has maintained its dividend at 3.7p per share.

Across its business, the Marston’s Inns and Taverns operation saw like-for-like sales up 1.7% with underlying operating margins up 1% and average profit per pub up 10%.

However, the Marston’s Pub Company saw operating profit decline 3.7% although the firm said trends had improved as the year had progressed.

Its brewing operation, Marston’s Beer Company, saw revenue up 4.5% and operating profit up 1.3%.

The company said it had reduced its net debt by £17.1m to £1.082bn.

Underlying earnings per share were 10p and the final dividend is 3.7p per share, in line with last year.

Operational highlights saw the completion of 15 new-build pubs, while the overall performance of the building programme was ahead of target. The company said it remained on track to complete the next 20 new-build sites in 2011.

The new food strategy, dubbed the ‘F-Plan’, progressed well and now represents 40% of all sales with more than 24 million meals sold in managed pubs this year, up 5% on last year. The average spend per meal was £6.

The company said its tenanted and leased pub operation had also performed well with retail agreements implemented in 104 pubs with profit uplift in line with targets. It remains on track to roll out a further 200 agreements in 2011.

Premium ale volumes were up by 3%, with the brands in this sector now representing 61% of the company’s ale portfolio.

Ringwood beers were up 16%; Wychwood up 5%; and Jennings up 13%, the latter despite the significant disruption to brewing operations following the Cockermouth flood in November 2009.  

The growth has primarily been achieved through growth in sales to the independent free trade and to supermarkets, although it said it had made progress in all three of its channels of trade during the year.

The performance means the company retained its position as market leader in the premium ale market.

Ralph Findlay, Marston’s chief executive, said: “We have adapted well to market conditions and trends. We are benefiting from our focused, differentiated strategy as demonstrated by our robust results in 2010 and a strong start to the new financial year. Our plans are affordable, deliverable, and target sustainable growth and strong returns in the future.”

In the eight weeks to November 27, managed like-for-like (lfl) sales were up 3% including lfl food sales up 5.8% and lfl wet sales up 1.7%.

Tenanted and leased like-for-like profits were estimated to be down 1.5%, at profit per pub level.

Own-brewed volumes were ahead of last year, in line with expectations.

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