Marston’s expects to complete and lease-fund this acquisition in the first half of 2019 and will invest approximately £4m post acquisition with a target EBITDA (earnings before interest, tax, depreciation and amortisation) of around £500,000 in 2019 and at least £1m in 2020.
The operator of 1,568 pubs and producer of ales such as Pedigree, Hobgoblin and Bombardier also announced strong figures for the year ending 29 September, underpinned by successful trading during the World Cup and summer heatwave.
Group turnover was revealed to have increased by 15% to over £1.1bn, with Marston’s anticipating underlying profit before tax of around £104m, up from £100.1m the previous year. Moreover, total pub sales increased by 3.2%, including like-for-like sales growth of 0.6%.
Marston’s wet-led taverns pubs performed strongly during the period, with managed and franchised like-for-like sales increasing by 3.8%, with strong performance in the group’s community pub estate aided by the World Cup and warm weather. Additionally, like-for-like profit in Marston’s leased estate has increased by around 2%.
However, the group’s food-led destination pubs were negatively impacted by poor weather in the first half of the year and weaker trading during the World Cup, with like-for-like sales 1.2% behind last year.
Total volumes for Marston’s Beer Company increased by 47% during the period – benefiting from the acquisition of Charles Wells Brewing and Beer (CWBB) business in 2017. Significant distribution gains now seen Marston’s distribute to one in four UK pubs.
Sales of Marston’s own and licensed brand volumes exceeded 1m barrels for the first time this year while 2.5m composite barrels of drinks were distributed to the on and off-trade sectors. About 90% of ‘own brand’ volume is now sold outside Marston’s own pubs according to the latest figures.
Marston’s opened 14 pub restaurants and bars, and seven lodges in the year ending 29 September with plans also afoot to open 10 pub restaurants and bars and five lodges in 2019.
Marston’s chief executive officer Ralph Findlay said: "This year was a strong one for our taverns and beer businesses. We have seen clear benefit from our balanced portfolio having achieved good growth in wet-led pubs and from brewing, maximising the trading opportunities provided by the good summer weather and World Cup.
“This year has been transformational for our market-leading beer business, with the benefits of the acquisition of CWBB and the new distribution contracts delivering strong profit growth.
“Although trading in destination food-led pubs was weaker, this predominantly reflects issues beyond our control relating to unseasonal weather extremes and the World Cup.
“However, we are encouraged that our dining pubs are now seeing improving momentum and we expect to make further progress in 2019.
“We are meeting the demands of our customers and continue to manage the inflationary cost environment well, which gives us confidence for the future.’’
Marston’s will release its 2018 preliminary results on 21 November 2018.
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