Marston’s grew like-for-like sales in its Destination and Premium arm by 1.6% in the 26 weeks to 1 April.
During the period, like-for-like sales in its Taverns division were up 1.7% and leased like-for-like profits grew 2%. Average profit per pub was up 3% in first half year. Own-brewed beer volumes were up 2%.
In the 30 weeks to 29 April in Destination and Premium like-for-like sales rose 1.6% and in Taverns like-for-like sales were up 1.7%. Leased profits were up 2% and year-to-date own brewed beer volumes grew 2%.
The company said it was on track to open 23 pubs and bars and 8 lodges in the current financial year.
The update also included updates about its proposed £55m acquisition of Charles Wells brewing business and its new five-year agreement to become the exclusive distributor to the Punch B estate, which is set to be acquired by Patron Capital. Earlier this year, Marston’s won a similar contract to exclusively distribute to Hawthorn Leisure’s c.250-strong pub estate.
The company also announced today the agreement to acquire seven pubs for its Destination and Premium estate for a consideration of £13m with a refurbishment investment of £3m.
Total underlying revenue increased by 2.8% to £440.8m during the period with underlying operating profit of £71m up 0.7%. The group said that operating margins were slightly behind last year, but adjusting for the Easter impact, underlying operating margin was in line with last year in Destination and Premium pubs and ahead in both the Leased and Brewing businesses.
Capital expenditure was £79.7m in the first half year (2016: £72.9 million) including £40m on new pubs. The group said it expected capital expenditure would be around £145m this financial year, including around £75m for the construction of at least 20 pub-restaurants, 3 Revere bars and 8 lodges.
Proceeds of £33.2m of cash were received during the period from the sale of 20 pubs and other assets, including £26.8m of leasing transactions.
During the period Marston’s entered into a new £320m bank facility to March 2022, with an additional £40m accordion facility at improved terms.
Chief executive Ralph Findlay, said: “Marston’s has been transformed over the last 10 years by the consistent implementation of our established strategy. In that time, we have built around 200 pubs on new sites representing 60% of the Destination estate today, and we have developed a leading premium pubs and bars business. The Taverns estate has been repositioned, having sold around 1,000 pubs and introduced pioneering franchise-style agreements designed for community pubs. In Brewing, we lead the premium ale market and benefit from a growing contribution from craft beers and international licensed brands, including premium European lager brands.
“Our market position will be enhanced by the acquisition of Charles Wells Brewing and Beer Business and we remain confident our strategy will continue to create value for shareholders.”