Trading on track at Marston's
Brewer and pub operator Marston's is "on track" to meet its trading expectations and has even seen a "modest improvement" in trade since January.
The operator said that trading over Easter had been satisfactory and that operating profit for the first half year would be boosted by the fall of Easter, estimated to be worth £2m, within that period.
Like-for-like sales at its managed division, Marston's Inns and Taverns, saw a 1.8% drop on last year for the 27 weeks and two days to 13 April. Like-for-likes were up 3.1% over the last eight weeks and two days to 13 April driven by gorwth in cask ale sales and value food offers. The operating margin is slightly below last year but in line with expectations.
The company reported that underlying profits at its tenanted and leased division, Marston's Pub Company, remained consistent with those reported in January — which were 6% down on last year.
"Not withstanding difficult market conditions, volume trends in recent weeks have shown an improvement," said chief executive Ralph Findlay. "Good, well positioned pubs with sustainable rents operated by skilled and committed licensees continue to trade well."
At Marston's Beer Company, ale volumes increased 16% in the first half year with premium ale, which now represents 53% of its portfolio, increasing by 39% following the acquisition of Wychwood Brewery in April 2008.
Standard ale volumes were 6% below last year. "Overall our brands performed well and increased market share in a weak beer market, reflecting the increasing popularity of regional cask ales in our pubs, a robust free trade performance, and a strong second quarter in the off-trade," said Findlay.
Marston's has disposed of 32 smaller pubs for a total of £13m. It has previously announced an extension of £295m of its existing £400m bank facilities from August 2010 to August 2013. Capital expenditure is expected to be around £50m for 2009 — down from £117m in 2008 — to help reduce debt.
"We have a clear focus on offering our customers exceptional value for money and good service; on promoting a sustainable and fair basis for our dealings with tenants and lessees; on the development of an outstanding range of ale brands; on the tight control of costs; and on cash management," said Findlay.
"Although we remain cautious because of the weak economy and generally challenging trading environment, we are well positioned to benefit from longer term trends in casual dining and demand for differentiated offers."
