"Excellent" Christmas puts Marston’s ahead again

Pub landlord Marston’s has delivered another warming trading update, beating sales and profit expectations in its three divisions.

Marston’s, which owns and manages pubs and brews its own beer, said customers turned out to celebrate Christmas despite the snow and ice, with food sales the clear driver of its strong results.

Like for like sales of food and drink jumped 11.2 per cent in the 12 days of Christmas from 23 December to 3 January alone, in what analysts called “a truly excellent Christmas” as drinkers braved the cold to see in the New Year.

And in its managed pubs, food sales rose 2.1 per cent in the 16 weeks to the end of December, from the same period in 2009, driven by a 4.4 per cent growth in sales of food.

Drinks sales grew by only 1.2 per cent in the period, in comparison.

Tenanted pubs, which have experienced a difficult recession across the sector, with falling revenues pushing many tenant landlords out of business, saw improving trends, with the one per cent profit decline in the period better than the four per cent contraction seen in 2009.

Analysts attributed the improvement to "self help measures" implemented by Marston's such as moving tenants to its Retail Agreements, a more supportive franchise tenancy model.

Beer volumes at Marston’s Beer Company were up six per cent on the previous year, bucking the UK trend where ale volumes are down by about seven per cent.

Analysts welcomed the results: Numis analyst Douglas Jack said Marston’s “offers high single-digit earnings growth, a 5.6 per cent dividend and forecast upgrade potential.”

Altium Securities analysts said they “remain impressed with how robustly Marston’s continues to trade through these challenging times. We believe the self-help measures of retail agreements and new builds should allow industry outperformance to continue.”