Marston’s, the brewer and pub operator, is considering plans to rollout more lodges that it operates itself, chief executive Ralph Findlay has told M&C Report.
The company opened its first new build lodge, the Two Rivers at Chepstow, last November and a second, the Starling Cloud at Aberystwyth, this spring. Both have pubs adjacent to them.
Findlay described them as an “important trial” for the company, which also owns a number of co-located sites with budget hotel operators Travelodge and Premier Inn.
“One of the decisions that we are looking at is whether our performance in the lodges will be strong enough to make this investment ourselves.”
He said a decision on this question would be taken in the next few months. The company will examine issues such as the mix of customers between leisure and business and “what rates people would be willing to pay”. Findlay described trading at the Two Rivers and the Starling Cloud as “very strong”.
Marston’s has opened 16 new pub restaurants in the 42 weeks to 20 July. On the company’s new build performance generally, Findlay said: “We had a very strong run on openings and I’ve been particularly pleased with the performance at the pub restaurants in Scotland.” Three have opened so far in Scotland and another is expected by the end of the year, while at the other end of the country, Marston’s opened its first on the Isle of White, the Merrie Garden.
“That pub has performed extremely well for us. We’ve got a formula that works really well in different parts of the UK that’s good news for the long term development of the new build programme”
Announcing its results for the 10 weeks to 29 July, Marston’s revised upwards its expected proceeds from disposals from £35m-£40m to c£50m. Proceeds in the year to date are ahead of target, at £35m.
Findlay told M&C Report: “We will sell more units that we anticipated.
“There may be more options in the housing market we are seeing more sites going for redevelopments. Secondly we’ve seen continued strong interest from supermarkets in good sites for convenience store developments.”
Marston’s reported a 6% rise in like-for-like sales in 10 weeks to 20 July in its Destination and Premium pubs arm. Across the 42 weeks in the division, like-for-likes are ahead by 2.1% (food: 3.7%, drinks: 0.5%). Leased pub performance is in line with last year. In its Taverns community pubs, performance in H2 to date is in line with 2012, with growth in its franchise pubs against strong comparatives against Euro 2012.
Findlay said it was “difficult to disentangle” the impact of the good weather from a genuine uplift in consumer confidence. However, he said there were “some signs” of an uplift, with an increase in dessert sales.
Own-brewed beer volumes are up around 6% in the year to date. Marston’s said it had made “excellent progress in a declining market”.
