Marston's to accelerate new build programme after strong sales

These sites enjoyed like-for-like sales up 2.2% in the year to 5 October, with food sales growth of 3.7% and sales growth of 0.2%. Over the last 11 weeks like-for-likes were ahead by 2.6%. And operating margins are running “slightly ahead of last year”.

Marston’s managed and franchised pubs have delivered “robust” trading with like-for-like sales in line with last year and up 2% in the second half.

Profits for the full year in Marston’s Taverns community pubs are expected to be behind last year “due to poor weather in the first half-year, a greater than anticipated level of disposals and a more subdued performance in our tenanted pubs in line with market trends”.

And in its Leased pubs, profit is expected to be in line with last year, with an improved performance in the last six months.

Improving quality​

The company’s brewing operations outperformed the market, with own-brewed beer volumes up 6% year-on-year, compared to a market decline of 3%. Premium cask ale volumes were up 4% in the year and bottled ale was up 19% - both segments in which Marston’s claims market leadership.

Marston’s said it is focusing on significantly improving the quality of its pub estate, having completed 22 new pub-restaurants in the year - all delivering strong returns. A 2012 estate valuation indicated that the new-build pubs were valued at 50% above build cost, “generating significant value to our shareholders”.

A company statement said: “As a result of this success we propose to accelerate the new-build programme and are targeting 25-30 openings over the next few years, with a visible pipeline of sites to 2017.”

Sustainable growth​

Marston’s disposed of 130 pubs and other assets in the year generating proceeds of around £50m. And a more aggressive churn of the Taverns estate - which aims to achieve disposal proceeds of £60m-£70m for financial year 2014 - is expected to improve returns over time, assist the funding of the new-build programme and reduce the company’s exposure to the tenanted sector.

Chief executive Ralph Findlay said: “We are encouraged by our performance in the second-half year after challenging weather in the first half.

“The performance of our new-build pubs is very strong. We have developed plans to accelerate the programme and intend to dispose more aggressively of lower-end pubs in order to pursue our key objectives of sustainable growth, improving returns and reducing leverage over time.

“We are confident that we are significantly improving the quality of our pub estate for both today’s and tomorrow’s consumer.”