Marston's reveals sales increase

Marston's has this morning revealed improving trading in all three of its divisions, with managed pub like-for-like sales up 1.4% for the 26 weeks to 3 April.

The pub group and brewer said that both food and drink sales at its retail arm were in like-for-like growth, rising 2.5% and 0.5% respectively. The group said that margins had continued to improve although it did not give a number.

On the new build programme underway within its managed arm, Marston's said it remained on schedule to open 15 such sites in the current year, with six already trading (at Aylesbury, Caterham, Daventry, Ashbourne, Sittingbourne and Newark).

These food-led sites were part of a plan to open 60 new-build venues over a three year period.

The performance of the sites already open was encouraging, with sales and returns slightly ahead of its targets of £20,000 per week revenue and 15% ebitda return on capital.

At its tenanted and leased arm, the group reported improving conditions with like-for-like profit declines reducing to 4.6%, against the 4.9% it reported in January.

Over 83% of the estate was now let on substantive agreements, against about 80% at the end of the last financial year

At the company's beer arm, which makes Marston's Pedigree and brews beers under a range of names such as Jennings and Ringwood, volumes were flat - "in line with last year". Premium ale volumes increased 4%.

It said a recently introduced cask beer technology called Fastcask - developed in house - that increases the distribution potential of its brands represented a meaningful growth opportunity.

It said that the recently agreed deal to brew Tetley's under contract would improve efficiencies and help absorb costs.

Marston's said that trading over the Easter period - which fell in the second half was "good and slightly ahead of last year."

In a statement, the group concluded: "Although the trading environment remains challenging, we are encouraged by our performance in the first half year. Trading in each of our divisions continues to improve.

"Our progress in developing high quality new-build pub-restaurants together with innovation in the operation of tenanted and leased pubs and in brewing provides a solid platform for growth."

The company will report interim results for the six months to 3 April on 20 May 2010. Analysts at Numis are predicting pre-tax profits of £72.5m.