14th May 2015 10:49
LONDON (Alliance News) - Marston's PLC Thursday reported a narrowed pretax loss in the first half of its financial year, as sales improved and it disposed of 65 pubs, and said its plan to transform its pub estate to boost profit and revenue is working.
The pub operator and brewer reported a narrowed pretax loss of GBP27.5 million in the 26 weeks to April 4, an improvement on the GBP54.8 million loss made in the same period a year earlier, as revenue increased to GBP400.5 million from GBP384.5 million.
Marston's, the brewer of Pedigree and Hobgoblin ale, is undergoing a transformation plan to improve the quality of its estate by building new pubs and disposing of weaker ones.
During the half-year, it made proceeds of GBP26.4 million from the disposal of 65 pubs in its Taverns estate, but profit still took a hit from a GBP39 million charge on an external estate valuation, an GBP8.6 million loss relating to interest rate swaps, and disposal costs of around GBP3 million.
Marston's said it expects the disposal of around 200 pubs in the Taverns estate for the full year, which should generate proceeds of around GBP60 million.
"We expect to complete the majority of our disposals programme this year, and our momentum gives us confidence of achieving further progress in the future," Chief Executive Ralph Findlay said in a statement.
In 2015, Marston's expects to open around 25 family-friendly pub-restaurants, including three lodges, in its Destination and Premium estate. From 2016, it anticipates the development of around five lodges per year, the company added, in addition to two Revere or Pitcher & Piano openings a year, dependent on site availability.
It said investment in new-build pubs has "contributed to the development of a high-quality, national pub estate and transformational growth in food sales to over 30 million meals each year."
"Profits have increased in each of our trading segments, excluding the impact of disposals, and we remain on track to complete 25 new-builds this year with excellent visibility on our site pipeline in 2015 and 2016. We are also seeing good opportunities to expand our premium estate, Pitcher & Piano and Revere, and invest further in pubs with accommodation," Findlay said.
Marston's said the increase in revenue in the half-year was driven by contributions from new-build pubs, solid like-for-like sales growth of 1.5% in its Destination and Premium pubs and 1.4% in its Taverns pubs, and by growth in brewing, within which its largest brand Hobgoblin grew its sales by 11%.
Since the period-end, Marston's acquired Thwaites' beer division, including the Lancaster Bomber and Wainwright brands, for GBP25.1 million.
It said like-for-like sales in its Managed Pubs and Taverns were up 2% and 2.8%, respectively, in the five weeks to May 9, adding that profits from its Leased pubs and own-brewed volumes are in line with expectations.
"Two years ago, we set out our plan to reposition our pub estate, focusing on high-quality pubs with opportunity for further growth. As we approach the end of the transition period, these results demonstrate our plan is working," Findlay said.
Marston's will pay an interim dividend of 2.5 pence, up 4% on the prior year.
Shares in Marston's were trading up 0.4% at 164.10 pence Thursday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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