Marston's: £2m spent helping tenants

Marston's tenants and lessees have received around £2m worth of help in the form of rent reductions, discounts and business building tools.

The pubco and brewer reported that like-for-like profit in the tenanted division, Marston's Pub Company, was 1.7% down on last year for the year ending 4 October — including a 3% decline in the second half of the year. However, it reported that 83% of its pubs let on substantive agreements achived profit growth overall.

"Pubs are subject to comprehensive regulation and are supervised by trained staff committed to the responsible retailing of alcohol," said chief executive Ralph Findlay. "However, recently introduced legislation and increases in taxation have increased the commercial pressures on pub operators and their tenants and have contributed to an increasing alcohol price differential between pubs and the off-trade. In particular, this has disadvantaged many tenants in comparison to larger retailers."

Like-for-like sales at managed houses, Marston's Inns and Taverns, fell by 0.6% on last year. Food sales now account for 36% of total sales with average spend per head on food, volumes of meals sold and like-for-like food sales all ahead of last year. It opened 16 new managed pubs during the year.

At Marston's Beer Company, total volumes of own brewed beers rose 5% and volumes of premium ale by 17.5% following the acquisitions of Ringwood and Wychwood.

Overall group turnover is 2% up on last year but sales were subdued. "During the second half-year declining consumer confidence and increasing inflationary pressures contributed to very testing market conditions," said Findlay. "These factors, together with poor summer weather, are reflected in more subdued sales and, as anticipated, continued pressure on margins due to rising food, energy and brewing costs. Weaker sales and margin pressure have been mitigated by good cost management."

Costs relating to employment, food, energy and brewing raw materials are expected to increase by around £12m next year, in addition to higher duty.

Marston's said it has no immediate plans at to convert to tax efficient Real Estate Investment Trust (Reit) status because of the material costs involved.