Marston's reports rise in revenues

Underlying pre-tax profit increased 14.7% to £33.5m, which the company said reflected lower interest costs in the period.

In the managed arm, like-for-like sales increased 3.6%, with each of its destination, community and town centres areas “in growth”. Revenues increased 4.8%, representing the “continued good performance” of the new builds and strong like-for-likes, offset by the impact of disposals.
Marston's said it's on track to open a further 25 new builds this financial year, and 20-25 sites each year after that. Average turnover per new build is c.£27k, ahead of the initial c.£20k target. They generate an estimated annual return on capital of 18.5%, an investment multiple of 5.4x EBITDA.
Managed food sales were up 3.9% on a like-for-like basis, with wet sales up 3.6%, with food now accounting for 43% of sales (2011: 41%). Marston’s said the rise in food sales was mainly due to higher sales volumes than price increases, especially through its value formats Two for One and Milestone - the number of meals served increased 11% in H1 to 27.5m.
A focus on having family-friendly trading led to an 8% rise in children’s meals served.
In the managed estate, growth in the wet trade was driven by a 13% increase in premium cask ale and 6% in premium lager, while wine now accounts for c.20% of drinks wines.

Revenue in the tenanted and franchised estate increased 14.2% to £98.1m, driven by the continued rollout of its franchise agreement. Overall volumes were up 4% and underlying profit increased 3.1% to £39.8m, driven by pubs on long-term agreements and franchise sites.
Revenue in the 1,000-strong traditional tenanted estate increased 2.3%, with rent up 3.4% and operating profit 0.6% ahead on last year. Marston’s said tenant stability also improved, with licensee turnover now around 8%.
In the brewing arm, revenues increased 6.6% to £53.6m, led by “strong performance” in the off-trade and free trade, where its account base increased 4% to c.3,250 customers. Underlying profit increased 2.7% to £7.5m.
Ale volumes were up 2%, with bottle ales up 10% and premium cask ales up 2%. The company said it had grown its share in both categories. Its strategy of focusing on ‘local’ beer sled to an increase in its regional breweries, with Wychwood sales up 9%, Jennings up 24% and Ringwood up 12%.
Ralph Findlay, chief executive, said: “We have delivered a good performance in the first half year against a weak consumer backdrop. Our growth in revenue and earnings was underpinned by our strategic focus on delivering value, high service standards and a quality offering to our consumers and customers. Our confidence that we are well positioned for the future is reflected in our declared dividend increase.”
In the 32 weeks to 12 May, managed like-for-likes increased 2.4%, with food sales up 2.7 and wet sales growing 2.3%. Trading in the last nine weeks has been “slightly below last year”, Marston’s said, due to tough comparatives with April 2011.
Profits in the tenanted and franchise arm were up c.3% in the period and brewing is performing “in line with our expectations”.