Marston's suspends room rollout plans

Marston's, the brewer and pub operator, has suspended a decision to expand its room stock in the light of the recession.

Derek Andrew, managing director of Marston's Inns and Taverns, said the company was content with its current stock of 850 rooms and was instead concentrating on debt reduction.

However, the company, which had planned to invest £10m annually for the next two year on further rooms, said it was still buying new sites without obligation to build on them.

Andrew told M&C Report: "Our rooms are doing well, because this time last year we refurbished about 80% of our room stock, so we are getting good numbers from them.

"I would have like to have developed our coaching inns but repaying debt is the most sensible route in this market,so I am suspending that element of our activity.

"Instead, we are buying new sites without the obligations to build them within a specified time period. It used to be that a developer would buy a site and we'd buy the pub site.

"Now, the pub is still available but no one is building the houses. We are saying to developers we're still interested, we'll commit to the site but we want to see house building 50% complete before we get underway."

Earlier this year Marston's revealed it had agreed an extension to its banking facility until August 2013.

The facility, agreed with a syndicate of banks, will reduce from £400m to £295m in August 2010.

The amount drawn on the current facility on 4 October was approximately £240m. The cost of its debt will rise from 6.1% to 6.3% under the new agreement.