Marston's raises a glass to milder weather

Marston's said its pubs had a good Christmas and New Year while the brewer's cask ales saw increased sales and outperformed the market.

In the group's managed pubs estate, where the landlords are Marston's employees, sales in the 16 weeks to January 21st were up 5.0% year-on-year (YOY) on a like-for-like (LFL) basis.

Reflecting the evolution of the British pub to a place where people eat as well as drink, growth in food sales outstripped sales of booze and soft drinks ("wet sales" in the industry argot). LFL food sales were up 5.5% YOY while wet sales rose 4.8%.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Focusing more closely on the Christmas trading period, where the pub industry was going up against soft comparatives from the year before because of December 2010's severe weather conditions, LFL sales in the eight weeks to January 21st were up 7.0%.

Operating margins in the managed estate are in line with last year and the group's plan to build around 25 pub-restaurants in the current financial year remains on track.

As for the group's leased, tenanted and franchised pubs, profit trends continued to improve over the 16 week reporting period, and are estimated to be up by about 3.0% on the corresponding period a year earlier. Once again, there was a December bounce, with profits in the eight weeks to January 21st up by around 4.0%.

The Marston's Beer Company, best known for its Pedigree premium ale, saw beer volumes rise 2% YOY in the 16 week period. Premium ale sales were up 3% while sales of bottled ale were 7% higher than the year before.

Net debt and cash flow are in line with company expectations.

Unfortunately, it is not all beer and skittles, and the company said it expects the tough trading conditions the industry endured in 2011 to continue in 2012.

jh