Marston's scores with bargain pub grub
A value-for-money strategy at pub group and brewer Marston's helped it overcome a challenging market and notch up a 5% increase in profits.
Cheers: Ralph Findlay welcomes higher profits and sales
The company made an underlying pre-tax profit before one-offs of £29.2m in the six months to April 2.
Group revenue was up 2.8% at £317.9m, and the half-year dividend was frozen at 2.1p a share.
Marston's said the recent strong trading continued into the second half, with like-for-like sales up 5% in its managed pub arm during a nine-week period covering Mother's Day and Easter.
Shares in Marston's, which makes Pedigree and Bank's beer and has an estate of more than 2,000 pubs, slipped 0.2p to 110p in trading today.
The company said the popularity of offers such as two meals for £10 in its managed pubs contributed to a 10% increase in the number of main meals it served to more than 12m in the half-year period.
Average food spend per head rose to £6.24, driven by a 10% rise in sales of starters and desserts.
Marston's anticipates that its managed pubs will generate 45% of sales from food by 2014, compared with the current level of 41%.
Chief executive Ralph Findlay said: 'The performance of the group in the first half year has been encouraging, despite challenging market conditions and the severe weather in December, and this has continued with good trading over the Easter period.'
'Our focused and disciplined strategy, offering consumers value for money in well-invested pubs, together with sector-leading shares in the growth segments of the beer market, places us in a strong position for the future.'
View from the City
Analysts at investment bank Epirito Santo dubbed the results 'a sturdy set of numbers'.
'Clearly inflation is a concern for 2012, but in the managed estate the company states that “our expectation is that we can fully mitigate these cost increases”,' they said.
'Finally, current trading has clearly seen the benefit of sunshine (and a Royal Wedding) with managed like-for- likes up 5% in the last nine weeks. The comparatives get notably tougher going forward, but this is a positive start to the second half.'
Broker Panmure Gordon said the results were 'robust', current sales were strong and Marston's stock was inexpensive. It reiterated its buy recommendation.
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