Marston's profits hit by flooding costs

Marston's, the Midlands-based brewer, has warned that its pre-tax profit will be "slightly below" original expectations as a result of the wet summer, flood-related repair costs - estimated to be around £2m - and interest rate pressures on consumer spending.

The brewer said that despite this, earnings before exceptionals were anticipated to be in line with original expectations, "reflecting the impact of share buybacks and the fact that the effective rate of tax is expected to be lower than last year".

Marston's said it had bought 28.1m shares during the year at a cost of "around £120m".

In a trading update issued today the group said the severe flooding in June and July had hit 150 of its pubs, however all but five had reopened by the year end at September 29.

Marston's said its managed pub arm, comprising 550 sites, had seen like-for-like sales growth of 4.6 per cent, with wet sales up 0.6 per cent and food sales up 13.3 per cent.

Estimated average profit per pub across the group's 1,722-strong tenanted and leased estate rose "by around 13 per cent", after allowing for the disposal of 279 pubs to aAIM Group earlier this year.

Marston's said trading since the introduction of the smoking ban "continued to be good", although it remained cautious about the impact of the ban over the winter months.

It added that since the year end it had fixed the cost of all of its bank debt using interest rate swaps, with all borrowings fixed at a rate of a little more than six per cent.

Marston's shares were up 5p this morning, at 370p. The group expects to announce its full year results on November 30.