Marston's reports profit boost

Marston's has reported underlying pre-tax profit of £41.6m for the 26 weeks ending 31 March, a 1.5% increase on the same period last year.

The company said that pre-tax profit was impacted by higher interest costs resulting from its share buyback programme and acquisitions during the period.

Turnover climbed 8.5% to £305.3m, including a £13.4m contribution from acquisitions, while underlying operating profit from existing operations was up 4.8% to £70.4m.

The company announced that it was to increase its share buyback programme from £100m to £150m during the year on the back of its disposal of 279 tenanted pubs for £82.5m to aAim Group earlier this month.

During February and March it acquired and placed in treasury 9.1 million shares at a cost of £40.2m.

The group also said that it had examined the possibility of converting to a Real Estate Investment Trust (Reit) but estimated that the cost of such a move would at present be largely offset the potential tax benefits of doing so.

The company said that integration of the 153-strong Eldridge Pope estate, which it acquired in January for £155.1m, was completed at the end of March, and that it was performing strongly.

It said that trading in its 182 pubs in Wales had been encouraging since the introduction of the smoking ban.

The company said that over 90% of its pubs in England had an outside area of some sort, with a record £24.1m invested in pub refurbishments ahead of the ban.

Like-for-like sales in Marston's Inns and Taverns, its managed pub division, increased by 7% compared to the same period last year driven by strong food sales, which were up 14% on a like-for-like basis.

Turnover in its 568-strong managed estate was up 1% to £154.6m, while underlying operating profit climbed to £26.1m, from £25.9m the previous year.

The company invested £13.3m in seven new build pubs during the period, plus a further £18.5m on its existing managed estate.

Underlying operating profit in Marston's Pub Company, its tenanted and. leased pub division division, which comprised 1,967 pubs as of 31 March, increased by 13.9% to £43.3m, while turnover was up 12.4% to £97.1m.

As a consequence of the disposal of 279 pubs out of the division, average profit per pub increased by 15% to £64,000.

Turnover at the company's brewing business dropped to £40.2m from £41.9m the previous year, reflected the company's withdrawal from several low-margin w2holesalers, and Admiral Taverns acquisition of the Pyramid Pub Company.

The company's premium ale range, which includes Marston's Pedigree and Old Empire, grew by 4.8%.

The group said that current trading across all its divisions had been good and in line with expectations.

In the 33 weeks to 19 May like-for-like sales in Marston's Inns and Taverns were up 6.6% on last year, with continuing strong growth in food sales.