Marston’s PLC has issued a Trading Update for the 42 weeks to 21 July 2018, showing that trading in the second half year to date has been good overall, helped by recent good weather and the World Cup.
As in previous years, the group's wet-led pubs, leased estate and brewing business benefited significantly from the World Cup and, despite the negative impact on food-led pubs the tournament was positive for the company.
This improvement, after a first half-year affected by poor weather, means that the business has achieved encouraging sales growth in both its pub and beer businesses in the 42 week period to date, and it expects to deliver underlying earnings in line with expectations for the full year.
Total managed and franchised pub sales were up 5.2% in the 42 week period, including like-for-like sales growth of 0.3% and the contribution from the pub expansion programme. In the most recent 16 weeks, like-for-like sales were up 0.9%, helped by good weather and the football, but with some offset from poor weather in April. Post April, overall like-for-like sales growth over the last 12 weeks has been 2% with the Destination and Premium performance continuing to improve, as well as weather benefiting Taverns.
In Destination and Premium, like-for-like sales for the 42 week period were 1.5% behind last year, an improvement on the first half-year, with like-for-like sales down 1.2% in the last 16 weeks despite the negative impact from the World Cup. Martson's continues to remain disciplined in terms of pricing, discounting and promotion, with operating margin only slightly below last year and in line with its expectations.
In Taverns, managed and franchised like-for-like sales for the 42 week period were 3.8% ahead of last year, including growth of 5.0% in the last 16 weeks. Most of the pubs have attractive outside areas allowing our customers to enjoy the good weather, and the firm created a brilliant World Cup atmosphere in many, building on the demand for experiences and the fact that pubs are the ‘next best thing’ to live football. Leased profits for the 42 week period are estimated to be 2% ahead of last year.
Marston’s Beer Company achieved strong growth, including total volumes up around 61% in the 42 week period with good growth in the underlying business. The firm continues to realise benefits from the acquisition of Charles Wells Brewing and Beer Business. The portfolio, which includes an outstanding range of premium ales, World Lagers and Craft Beers, increased market share.
The group remains on track to meet its openings growth targets for 15 pub restaurants and bars, and six lodges, in the current financial year.
Ralph Findlay, Chief Executive Officer, said, “We are encouraged by our stronger trading performance in the second half-year, including the benefit of recent good weather and the impact of the World Cup in our Taverns estate and in Marston’s Beer Company.
“We have a strong pipeline of sites which will contribute to continued growth in pubs, and see further opportunity in brewing following the acquisition and successful integration of Charles Wells Brewing and Beer business in 2017.
'Our strategic objectives and progressive dividend policy remain appropriate for current market conditions and we remain confident of delivering underlying earnings in line with expectations for the full year.”