Marston's to serve up full measure

Britain's soggy summer has not been able to knock pubs group and brewer Marston's off course, with the group saying underlying earnings per share will be in line with expectations.

In its managed pubs estate, like-for-like sales in the year to September 29th were 2.2% ahead of last year, with like-for-like food sales growth of 2.4% and like-for-like wet sales growth of 2.1%. Operating margins were slightly ahead of the previous year, the Pedigree bitter brewer revealed.

In the leased, tenanted and franchised pubs estate, operating profits are estimated to be around 3% ahead of last year. This improvement is largely down to the growth of the franchised estate, which now constitutes around 500 pubs. Pubs operated under the traditional leased and tenanted model contributed profits in line with last year.

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In brewing, Marston's own-brewed beer volumes were 2% higher than last year with growth in both premium cask and bottled ales.

Peter Dalzell, who joined Marston's in 1995, has been promoted to the main board following the decision to bring together the management of all of the group's pubs in one team; Dalzell, who has been instrumental in the development of Marston's franchise business since 2011, will head up this team.

Stephen Oliver will continue to report to Ralph Findlay, Chief Executive Officer, as Managing Director of Marston's Beer Company.

"We have been encouraged by the performance of all areas of our business this year despite the challenging consumer environment and the poor weather," said Findlay.

The group has had its pub estate and other properties revalued, resulting in a £163m increase in the value of the managed estate. Unfortunately, the value of the tenanted and franchised estate has reduced by £186m reflecting the lower multiples being achieved from the sale of tenanted pubs in the current market. Accordingly, there will be a non-cash pre-tax exceptional charge of around £215m through the income statement in the results for the year to September 29th 2012.

"The recent valuation exercise demonstrates the inherent quality of our pub estate and in particular highlights the significant value created by our new-build pub-restaurants," Findlay claimed.

JH