Marston's: tenanted pub profits improving

Underlying profits at Marston's tenanted and leased pubs have begun to improve, the brewer and operator has said.

Like-for-like profits for the year to 2 October is estimated to be around 3.7% below last year — but that compares favourably with the 4.5% decline reported in May.

The company said 86% of its estate was now let on substantive agreements, including 104 on its new Retail Agreements.

It plans to have 600 tenants on its Retail Agreement, which offers tenants a percentage of profits, in the next three years

Managed rise​

The picture is far rosier at its managed pubs division with like-for-like sales up 1.7% on last year, driven by the success of its food offers.

Like-for-like food sales grew 2.5% with like-for-like wet sales up 1.4%.

Like-for-like sales for the 9 weeks to 2 October were up 1.7%.

"The success of our food offers, which now accounts for around 40% of sales, and the implementation of our new-build strategy continue to drive growth," it said.

"Operating margins have improved this year largely as a consequence of tight operational cost control, lower utility costs and the disposal of 17 lower margin leasehold sites."

Marston's said its new build programme is "on track" with 15 sites already open and 20 more due in 2011, followed by 25 in 2012. Turnover at new sites is ahead of targets.

Brewery​

The company said it expected turnover and operating profit from the brewery to be "slightly ahead" of last year against strong comparables.

Own-brewed volumes of ale are likely to be down on last year, reflecting a UK beer market down 6%.

But premium ale volumes increased by 3% in the period.

Overall, Marston's expects earnings before tax and exceptional items to be in line with its expectations.

"We have seen improving trends in each division and made good progress in implementing our strategy," it said.

"Our focus on value for money, high quality pubs, food and local beers places us in a strong position to meet the challenges ahead."