Wednesday 15 May 2019 1:27 pm

Marston’s cheers rise in profits after strong easter

Pub giant Marston’s posted a bump in underlying revenues and profits today, as a strong Easter showing bolstered the group’s half-year trading performance.

Shares in the brewery giant, which operates more than 1,500 pubs in the UK, rose five per cent in late-morning trading.

Read more: Pub operator Ei Group’s profits rise thanks to drinks sales boost

The figures

For the 26 weeks to 30 March​, total like-for-like sales growth climbed 2.2 per cent, accelerating from 1.4 per cent in the first three months to 3.2 per cent for the final 10 weeks.

Revenue jumped five per cent to £553.1m, while underlying profits before tax hit £37.0m, rising two per cent from the same period in 2018.

Average profit per per pub edged up one per cent.

Destination and premium like-for-like sales rose 1.2 per cent, while brewing revenue shot up eight per cent.

The interim dividend was maintained at 2.7p per share, as previously guided.


Why it's interesting

Boss Ralph Finlay said this morning that today's results showed an increasing focus on the top line more than anything else: "In our food businesses with new menus, in picking up trends like healthy eating, in brewing with getting the right brands".

But while profits and revenues might be the headline figure today, it is also debt that analysts have their eyes on today. The pub giant is targetting £120m of disposal proceeds between 2020-2023, with a target of £200m reduction in net debt by 2023.

Russell Pointon, analyst at Edison Investment Research, said: "Against a weak comparative, Marston's has reported improving momentum in underlying revenue growth through its first half, including a return to growth in the Destination and Premium brands. Trading momentum has continued to be strong into the second half, with life-for-like growth of 3.2 per cent in the first 10 weeks, benefiting from the good weather over Easter, although comparatives will get tougher from here.

"The company is also executing well on the debt reduction plan announced earlier in the year. Forecasts and cash flow look well supported."

Read more: Warm-weather pub trips boost tepid consumer spending growth in April

What the group said

Chief executive Ralph Findlay said: "I am pleased to report continued growth across all segments of the business. Our Taverns wet-led community pubs have built on the strong trading performance last year and it is particularly encouraging to see our food-led pubs once again achieving increasing momentum in profitable like- for-like sales growth. Our leading Brewing business goes from strength to strength, winning new distribution contracts and continuing to grow market share."

"We remain focussed on our strategic objectives and good progress has been made with our stated aim to improve cash generation and reduce the Group’s leverage. Whilst the backdrop of ongoing uncertainty around Brexit continues to be challenging, opportunities for growth remain and we are confident of delivering another year of profitable growth for our shareholders."