Marston’s, the brewer and pub operator, has announced the appointment of Roger Devlin, current chair of internet gaming business Gamesys, as its new chairman as it reports a decline in profits in the 26 weeks to 30 March, with trading "significantly impacted" by poor weather in January and March.
Marston's also announced that Stephen Oliver, managing director of Marston's Beer Company, will retire from the company in September and be succeeded by Richard Westwood, currently director of supply chain and commercial operations.
Underlying operating profit was £66.6m (H1 2012: £67.6m) and underlying pre-tax profit fell from £35.5m to £27.6m, which Marston’s said reflects higher finance costs. Underlying earnings per share was 3.8p (2012: 4.7p) and group revenue increased 5% to £358.1m.
Meanwhile, like-for-like sales in the six weeks to 11 May were up 6% (food: +9%, drinks +3%).
Total revenue in the Destination and Premium arm grew 8.3% to £154.7m, with like-for-likes level with last year. Capex in the division was £57m, of which £40m was on newbuilds.
Marston's said it expects to complete at least 20 new-builds this financial year in the division and its 2013 new-builds are ahead of its internal target.
The Taverns division of "high quality" managed, tenanted and franchised community pubs saw total revenue remain "broadly level" at £117.2m. Underlying operating profit was down 7.2% to £29.8m "due to the weather-affected performance of the managed and tenanted pubs".
Operating margin fell by 1.9% due to the increased mix of franchise pubs that higher absolute profits but at a lower margin percentage than the traditional tenanted model, the company said. Like-for-like profits in the franchise pubs are up 10%.
In the Leased division total revenues fell from £28.1m to £26.3m, driven by poor weather in Q2. Underlying profit was down 5.8% to £13.1m. Capex in the division in the period was £2m.
Total revenue in the Brewing division grew 11.8% to £59.9m, with underlying profit steady at £7.5m. Ale volumes grew 8%, with bottled ale up 21%.
Ralph Findlay, chief executive, said: "Although the first half of this year has been significantly impacted by the poor weather in January and March, our focus on quality and good service at reasonable prices is what consumers are looking for. This underpins our clearly defined and proved strategy as we continue to drive growth through building new pub-restaurants, developing franchises, and benefiting from market trends in brewing. Trading in the second half year has started well, and we remain confident of achieving our full-year targets."
Marston’s said that during the period it entered into three innovative long-term lease financing structures totalling £101m as at 30 March, under which the freehold reverts to Marston’s at the end of the lease term.
"These agreements offer considerable flexibility at an attractive cost of finance, reduce our reliance on bank facilities, and extend the maturity of our debt without compromising our preference for freehold ownership of our estate. We have received a further £7m in respect of these arrangements since the period end. Market conditions permitting, we expect to undertake further similar transactions in the future."
Devlin takes the chairman role on 1 September.
David Thompson, current chairman, said: "It is a pleasure to hand over the chairmanship to Roger Devlin. He brings to Marston’s his intellectual rigour and extensive board experience. He has thorough knowledge of hospitality and leisure, and his background in sport and on-line businesses will add to our relationships with our customers."
Devlin said: "Marston’s is a great business generating industry leading returns through the vigorous implementation of a consistent strategy well suited to today’s trading environment. I look forward to working with the team to build on this success."
