Marston's hails pub-restaurant impact, plans to open 20-25 new sites

Marston's has revealed its move into opening pub restaurants is paying significant dividends by increasing the company's exposure to the casual dining market while the operator has committed to opening 20-25 new pubs in the 2013 financial year.

Announcing a trading update for the year ending 29 September, the Wolverhampton-based brewer and pub retailer reported a rise in like-for-like sales in its managed estate of 2.2 per cent.

The growth was driven in part due to a 2.4 per cent rise in food sales and a marginal rise in operating margins.

Casual dining

The company also hailed the success of its pub-restaurants and new-build programme over the last three years in contributing to 'continued improvement' in its managed houses and 'substantially increasing our exposure to the informal dining market.'

Marston's opened 25 food-led pubs in the period and committed to continuing the rate of growth of its managed estate for the foreseeable future, subject to planning.

“We have been encouraged by the performance of all areas of our business this year despite the challenging consumer environment and the poor weather," Ralph Findlay, Marston's chief executive, said of the results.

"Our continued focus on offering value for money to our customers together with high service and quality standards is appropriate for current market conditions, and is generating profitable growth with improved returns."

Referring to a recent valuation exercise in the second half of the financial year, Findlay said it had demonstrated the inherent quality of our pub estate' and in particular highlighted 'the significant value created by our new-build pub-restaurants.'

Marston's, which last month lost its chief operating officer to M&B, said the value of its managed estate had increased by £163m due to the new sites.

Improvement

Despite the very poor weather over the summer, Marston's revealed successful trading was not limited to its managed division with improvements recorded among its tenanted, leased and franchised houses too.

Operating profits in its non-managed venues are estimated to be around 3 per cent ahead of last year due to the growth of its franchised estate to around 500 pubs.

However the recent exercise revealed the value of the tenanted and franchised estate has reduced by £186m which the company said reflected the lower multiples currently being achieved from the sale of tenanted pubs.