Marston's 'franchise lease' sparks uplift
Underlying profits at Marston's tenanted and leased pubs are showing signs of improvement thanks to its introduction of a franchise-style lease.
Like-for-like profits for the tenanted estate are estimated to be around 1% down on last year for the 16 weeks to 22 January — comparing favourably with a 4% decline for the full financial year 2010.
"This improvement is primarily attributable to the continuing successful rollout of the franchise-style Retail Agreement, now operating in 160 pubs," it said.
Under the Retail Agreement licensees typically earn 20% of turnover to pay themselves and staff with Marston's buying everything centrally and paying all other bills.
The model allows licensees to focus on maximising sale and motivating staff without administration and purchasing price distractions.
It hopes to operate 600 pubs under this lease within three years.
Managed pubs
At its managed pubs division, Marston's Inns and Taverns, like-for-like sales were up 2.1% on last year fuelled by like-for-like food sales growth of 4.4% and like-for-like wet sales growth of 1.2%.
Like-for-like sales for the key Christmas period were 11.2% up on last year while operating margin is slightly ahead of last year.
Marston's has opened two new build pub restaurants in 2011 with eight more in the process of being built. It expects to open 20 pubs in 2011 and 25 in 2012.
"The performance of the 15 pubs opened in 2010 continues to be good and ahead of our original targets," it said.
Beer
Own brewed volumes were up 6% across the period on last year against a UK ale market down around 7%. "Our focus on localness and premium ale continues to drive growth, with premium cask ale up 4% and bottled ale up 20% in the period," it said.
Encouraged
Chief executive Ralph Findlay said: "We are encouraged by our performance to date, with the growth in like-for-like sales demonstrating the appeal and resilience of our offers despite the challenges presented by the weather in December.
"We are confident that our continued focus on offering our consumers value for money in high quality pubs, together with sector-leading shares in the growth segments of the beer market, places us in a strong position for the future."
