Pub owner Marston’s annual results were boosted by England's long run in the summer's World Cup, it said today, but it will open fewer pubs next year in the face of economic uncertainty.
Marston's reported a four per cent year-on-year rise in profit before tax to £104m for the year ending 29 September, meeting its predictions issued in October.
Meanwhile it saw record revenues of £1.1bn, a 15 per cent increase on 2017.
Like-for-like sales rose by 0.6 per cent, marking the fifth consecutive year of growth and average profit per pub was up two per cent, a 55 per cent increase since 2012.
The boost came in tandem with the company opening 14 pub-restaurants and seven lodges in the year, increasing its portfolio to 1,545 pubs in the UK.
Why it’s important
A long summer of heatwaves combined with England’s World Cup run powered the sale of more than 330m pints of beer among Marston’s own and licensed brands, a 47 per cent increase in volume.
The company also put its record revenues down to rollover benefits from last year’s £55m acquisition of the Charles Wells Beer Business (CWBB) which makes brands such as Bombardier, Young's and McGowan's..
But Marston's raised a degree of caution for pubs serving food, reflecting ongoing challenges in the casual dining and restaurant sector, limiting its planned openings for the next year to 10 pubs and bars and five lodges.
These so-called premium and destination pubs decreased in sales by 1.2 per cent, hit by poor weather in the first half of the year.
Paul Hickman, analyst at Edison Investment Research said: “While exposed to the underlying weakness in consumer demand, pub companies have the investment advantage of being totally UK-centric in their customer base, although input costs are to some extent affected by currency-led inflation.”
What the company said
Marston’s chief executive Ralph Findlay told City A.M.: “The pub industry is in a good place but there is uncertainly around, and that’s one reason why we’ll open fewer pubs next year, partly because of that caution about the wider market.
“It’s been a strange year, which started with Beast from the East, but then we had the hot summer.
“The overall industry is in not a bad place – if you look at amount of money spent in pubs this year, its expected to be 1.6 per cent higher than a year ago
“The biggest challenge for us, in our market, is that the level of price discounting is very ingrained. There are a lot of promotional offers, so getting balance right between sales growth and margin is critical.
“The pub industry is in a good place but there is uncertainly around, and that’s one reason why we’ll open fewer pubs next year, partly because of that caution about the wider market."