This disposal is in line with Marston’s plans to slash its debt of £200m by 2023 in part through the removal of certain non-core assets.
It is smaller wet-led leased, tenanted and franchised pubs that will be disposed of with the deal expected to complete before the end of November.
Marston’s chief executive officer Ralph Findlay said: “We are encouraged by the level of market interest that this portfolio of pubs has attracted.
“We remain focused on our stated objective of reducing our net debt by £200m by 2023 or earlier, and thereafter operating a high-quality business generating consistent net cash flow, after dividends, of at least £50m per annum.”
Expanding its portfolio
In the past year, Admiral Taverns has already seen its portfolio of community pubs expand after acquiring 150 pubs from Star Pubs & Bars in October 2019.
Now, the board of Admiral Taverns is pleased to announce that it has reached an agreement to acquire 137 more pubs from Marston’s.
Admiral Taverns chief executive Chris Jowsey said: “This is another exciting acquisition for our business, building on the strong momentum established over the course of the year and, on behalf of the entire team, I would like to take this opportunity to welcome our new licensees and colleagues to Admiral.”
Admiral has always aimed to champion the merits of the supported-tied agreement and hopes to continue developing its estate through this model.
A smooth transition
Jowsey added: “We remain fully committed to the leased and tenanted model and, through this acquisition, have been able to acquire an excellent portfolio of pubs that we look forward to developing through our award-winning and highly supportive approach.”
The group has also formed a partnership with experienced managed operator Helen Standing to facilitate the smooth transition and integration of these pubs to the Admiral platform while the group evaluates the longer-term opportunities for these sites.
He added: “I’m also very pleased that Helen Standing has agreed to partner with us to support the wider integration programme for some of these pubs.”
The pubs being disposed of contributed earnings before interest, depreciation and amortisation (EBITDA) of £4.8m and operating profit of £3.7m for the year to 28 September 2019.
The disposal will result in average profit per pub in the retained estate increasing by around 7% and return on capital improving by 0.2% post the transaction.
Corporate Pubs & Restaurants at Christie & Co estate agent senior director Noel Moffitt said: “We advised Marston’s that the optimal route to value was best realised through marketing the portfolio as a single package.
“The current lack of opportunity to acquire material portfolios as a group, combined with strong buyer appetite across a range of buyer pools, from family-run pub companies to private equity and international investors resulted in strong interest in the Marston’s portfolio.
“We’re delighted that Admiral Taverns were the successful bidder and look forward to seeing them execute their strategy to grow value.”