Brewer and pubs chain Marston’s reported a fall in annual profits but said its focus on family-friendly, food-led pubs was paying off.
The Wolverhampton-based company, which has 2,200 pubs in England and Wales and brews cask ales including Pedigree and Hobgoblin, said recent trading had been encouraging after like-for-like sales in its managed pubs rose 3.1 per cent in the last eight weeks.
This built on the recovery seen in the second half of the year to October 3, although annual pre-tax profits were still 13.5 per cent lower at £70.3 million.
Marston’s said the improved sales trend reflected value-for-money offers and its F-Plan strategy, which has seen the company focus on “food, families, females and forty/fifty somethings”.
With Marston’s looking to capitalise on longer term trends towards more eating out, food sales now account for 38 per cent of its revenues, up from 27 per cent in 2004.
Having raised £165.5 million from shareholders in a rights issue in July, Marston’s intends to build 60 new pubs over the next three years, including around 15 sites next year.
Combined with increased availability of sites and favourable construction costs, Marston’s said the building of a pub from scratch was often less risky than buying packages of existing pubs.
As well as 496 managed pubs including Marston’s Tavern Table, Two for One and Pitcher & Piano, the company’s estate features 1,688 tenanted and leased pubs.
It said operating profits for the division fell 7 per cent to £81.8 million, including around £3 million of additional support costs for licensees. Average profit per pub reduced from £51,000 to £48,000, although Marston’s said it was working to improve trading in weaker pubs and develop the estate as a whole.
In the brewing division, revenues increased 13.2 per cent to £101.5 million while underlying operating profits lifted 3.9 per cent to £16 million.
Marston’s said its market-beating performance reflected its line up of strong national and regional ale brands, as well as high levels of marketing support, including Pedigree’s branding as the “official” beer of England cricket.
Chief executive Ralph Findlay said: “This was a creditable performance in a very challenging period.
“Although we are cautious about predicting recovery, we have good pubs and popular regional ales which are performing well. We have a strong platform to make further progress over the coming year.”