FDBusiness.com

Marston’s, the UK pub operator and independent brewer, has reported a 4.4% increase in underlying operating profit to £172.7 million for the 52 weeks ended 1 October 2016, with profit growth across each of its trading segments. Total underlying revenue rose by 7.1% from 2015 to £905.8 million.

Underlying profit before tax was up 7.1% to £98.0 million principally reflecting the contribution from new pub-restaurants and a strong performance from the Brewing business. On a statutory basis, profit before tax was £80.8 million reflecting like-for-like growth in the group’s pubs, the positive impact of new openings, growth in its beer brands and the acquisition of Thwaites’ beer business.

Employing 14,000 people, Marston’s has an estate of 1,559 pubs situated nationally, comprising managed, franchised and leased pubs. It is the UK’s leading brewer of premium cask and bottled ales, including Marston’s Pedigree, Wainwright, Lancaster Bomber and Hobgoblin. The beer portfolio also includes Banks’s, Jennings, Wychwood, Ringwood, Brakspear and Mansfield beers.

Marston’s strategy is to focus on operating and expanding a high quality pub estate through investment in new pubs and bars as well as increasing its investment in accommodation. In addition, Marston’s beer business focuses on increasing market share in the growth areas of premium beers and bottled ale where it is the market leader.

Total Brewing revenue increased by 14.3% to £193.3 million, reflecting the benefits of the integration of the Thwaites business. Underlying operating profit increased by 12.1% to £23.2 million. Overall ale volumes were up 13% with premium cask ale volumes up 6% and premium bottled ale volumes up 5%. Brewing operating margin was slightly down on last year at 12.0%, due to the impact of the pub supply arrangement with Thwaites which generates a positive profit contribution, albeit at a low margin percentage.

Ralph Findlay, chief executive of Marston’s, comments: “We have delivered another year of good growth across the business, with the outstanding performance of our beer company particularly encouraging. Trading has been solid in the first few weeks of the new financial year and we have seen no discernible change to the trends experienced in 2016. The majority of our major product cost lines are contracted for 2017 and well into 2018.”

He adds: “We have a high quality pub and beer business which is displaying positive momentum and is consistently outperforming the market. We believe that, despite some continuing market headwinds, our expansion plans for new pub-restaurants, lodges and Revere bars will further enhance our ability to deliver attractive returns.”