Trading 'resilient' at Marston's
Marston's has reported a "resilient" performance with further improvement since the end of the first half year on 4 April, despite the recent wet weather.
Group turnover was 1.9% below last year for the 43 weeks to 1 August compared to the 2.8% decline for the 26 weeks to 4 April.
Around 100 of its tenanted pubs have now taken up the "tracker" variable rent agreement launched earlier in the year.
The company also recently launched two new schemes — Phoenix and Apollo — that seek to de-risk running a pub in the case of the former and inject more margin into pubs in the case of the latter.
Phoenix has been trialled at ten pubs and is an attempt to breathe new life into pubs not trading well. Tenants will be offered the chance to run a Marston's pub with risk removed in a quasi-franchise arrangement. The licensee will earn 20% of net take excluding machine income out of which staff will be paid. It hopes to have trialled the gareement in 80 pubs over the next year.
The company wants to trial Apollo in 50 to 60 pubs within its core estate of pubs on substantive agreements. Tenants would be offered the chance to switch to free trade discount levels from barrel one — bitter at £135 a barrel, premium bitter discount of £135 a barrel, standard lager at £170 a barrel and premium lager at £180 a barrel.
Managed houses
Like-for-like sales for the 43 week period at Marston's Inns and Taverns, were 1.2% below last year. Trading since March had been improved with like-for-like growth of 2.3% in the last six weeks to 1 August.
Food sales are still strong — up 2.2% fo rthe 43 weeks and 6% for the six weeks to 1 August — and now represent 38% of total sales.
Own brewed volumes increased 13% with a 31% increase in premium ale volumes thanks to investment in marketing Marston's Pedigree.
The company raised £20m from the sale of smaller pubs and will not need to to refinance until August 2013. It recently raised £165m from a rights issue and confirmed plans to spend £140m on building 60 new pubs over the next three years.
Work on new build pubs is already underway in Caterham, Surrey; Ashbourne, Derbyshire; Aylesbury, Buckinghamshire; and shortly to commence on a site in Sittingbourne, Kent. It expects to have commenced work on nine new pubs by the end of this financial year and plan to open 15 new pubs the following year.
BEC
Marston's said it "continues to develop its relationship with tenants and lessees, and to operate in a transparent manner with the objective of a fair division of risk and reward between the Company and the licensee".
It added: "We are adapting the model where appropriate to assist licensees as a consequence of current economic conditions and market trends, but we are clear that the principles underlying existing agreements, including the tie and fair, sustainable rents, confer real benefits to tenants."
Chief executive Ralph Findlay said he was confident of meeting trading expectations this year. "We are encouraged by the robust performance of the business which reflects the high quality of our pubs; our value for money offers; the popularity of our ale brands; and the continued implementation of our stated approach.
"We have a differentiated strategy and, in our accelerated new build programme, a significant development opportunity from which we aim to deliver good and sustainable returns."
