Marston's cashes in on success of 'F-plan'

FAST-growing brewing and pubs group Marston's poured the City an upbeat trading update yesterday, buoyed by robust Easter sales.

The group, which brews Banks's and Marston's Pedigree and whose pub chains include Pitcher & Piano, said that as well as good trading at its managed pubs arm over the holiday period, its tenanted pubs had also seen improved trading trends.

Ale volumes for the 26 weeks to 3 April were in line with last year, while premium ale sales rose 4 per cent.

In the managed pubs division, which also includes the Marston's Two for One brand, like-for-like sales were up 1.4 per cent on last year.

Like-for-like food sales lifted 2.5 per cent, while same-floorspace drinks edged up 0.5 per cent. The group said it estimated underlying profits in the tenanted and leased pubs division were down 4.6 per cent in the first trading half – better than the 4.9 per cent decline reported at the January AGM.

Marston's, which has a strong presence in the Midlands and north-west of England but closed its one Pitcher & Piano outlet in Glasgow four years ago, said that its new-build programme, which will add 15 food-led managed pubs in the year to October, was progressing well. Recent openings had seen turnover ahead of the group's target of 20,000 a week, the company said.

Marston's said: "We remain on track to meet our expectations for the financial year and continue to see improvement in each of our trading divisions."

The group has an estate of 2,167 pubs – which comprises 1,676 tenanted or leased and 491 managed pubs. It also brews Hobgoblin, Jennings, Wychwood, Brakspear and Mansfield beers. Marston's shares yesterday closed up 2.7 per cent, or 2.6p, at 97.05p.

The firm, which raised 165.5 million from shareholders in a rights issue in July, intends to build 60 pub restaurants over the next three years.

It has opened six so far – at Aylesbury, Caterham, Daventry, Ashbourne, Sittingbourne and Newark – and is on site at the other nine locations.

It has said its recent improved sales reflected value-for-money offers and its "F-Plan" strategy, focusing on "food, families, females and forty/fiftysomethings".

It is also capitalising on longer-term trends towards more eating out, as food sales now account for 38 per cent of its sales – compared with 27 per cent in 2004.

Broker Numis Securities said yesterday's update was slightly stronger than expected. Numis is keeping its forecast of 72.5m of profit for this financial year, up from 70.3m last year.