Marston's profits plunge despite better sales
Brewer and pubs chain Marston's reported a fall in annual profits today but said its focus on family-friendly, food-led pubs was paying off.
Bottoms up: Marston's profits fell despite sales boost.
The 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% 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% lower at £70.3m.
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% of its revenues, up from 27% in 2004.
Having raised £165.5m 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% to £81.8m, including around £3m 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% to £101.5m while underlying operating profits lifted 3.9% to £16m.
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.
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