Marston's: we're trading in line with expectations
Earnings at brewer and pub operator Marston's for the year will be in line with expectations, the company said in a pre-close statement.
Overall group turnover was 1.4% below last year for the 12 month period to 3 October, and flat in the second half-year despite poor summer weather and fragile consumer confidence.
Company operating margin was just over 1% below last year. Its managed division saw robust second-half sales and margins with continued food sales growth.
Marston's Inns and Taverns like-for-like sales were 0.6% below last year with like-for-like food sales growth of 2.8%.
Like-for-like sales were stronger in the second half-year, including growth of 2.7% in the 9 weeks to 3 October 2009. Like-for-like food growth in the 9 weeks period to 3 October 2009 was up 5.7% and wet sales were up 1.0% in the same period.
Leased pubs
Marston's tenanted and leased pubs saw like-for-like profit down by around 7% on last year. Around 80% of the division's pubs are let on substantive agreements, and overall profit from these pubs was in line with last year.
The company stated: "We have introduced a range of innovative solutions to retain and attract good licensees. These include a variable rent agreement (the 'Tracker') in around 100 pubs and a franchise-style agreement in 10 pubs.
"These agreements reduce risks for the tenant and, in the case of the franchise style agreement, facilitate improved retail standards.
"This innovative model will be further extended in 2010 following encouraging results to date.
"Our objective is to increase the number of pubs let on substantive agreements and to reduce the level of temporary rent alleviations and discounts which, as previously forecast, cost around £3m during the financial year just ended."
Brewing
Its brewing division increased market share and saw strong growth in premium ales.
Own-brewed ale volumes increased by 8% in the 12 month period and premium ale, which is now 53.5% of the ale portfolio, increased by 26% including 13% growth in the on-trade and 50% growth in the off-trade.
Since the half year, premium ale bottled volumes increased by 27% including growth of over 100% in bottled Marston's Pedigree, "The Official Beer of England Cricket".
Operating margin was down by under 2.0% as a consequence of the change in sales mix towards the off-trade, which is lower margin.
