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Food fuels Marston's sales growth

Published:  23 July, 2008

Marton's has reported strong sales growth in both its managed and tenanted estates, but warned that it remained cautious over consumer confidence.

The national brewer said average profit per tenanted pub up was up 13%, with total managed like-for-likes up 4.6%; and food sales up a healthy 13.3%.

The company estimates that 65% of total sales in its managed estate are now made to customers for whom dining is the primary reason for visiting the pub.

Since the year-end, managed like-for-like sales are up 2.1%, but chief executive Ralph Findlay sounded a warning note.

He said: "We remain cautious about consumer confidence, regulatory cost pressures and the short term impact of the smoking ban.

"We are, however, well positioned to continue to exploit current trends, including the continuing growth in casual dining.

"We regard our value for money offers and mid-market position as appropriate for the current economic climate."

Across the year, group turnover increased by 9.6% to 652.8m, boosted by the acquisition of the 153-pub Eldridge Pope business at the start of the year, as well as the smaller takeovers of Sovereign Inns and Ringwood Brewery.

The tenanted and leased Marston's Pub Company business, operating 1,722 pubs, saw turnover increased by 12.4% to 200.9m, despite "a challenging background including the introduction of the smoking ban and poor summer weather", as well as around 100 pubs seriously affected by the summer floods.

In the pub company estate, average EBITDA per pub increased by around 13% to approximately 65,000 per pub, boosted by the disposal at the bottom end.

On the managed side, the 550-pub Marston's Inns and Taverns operation saw total turnover increase by 11.2 % to 367.8m, with food the star performer.

Total like-for-like sales growth of 4.6% in the challenging market included like-for-like food sales growth of 13.3%.

There were strong performances from the community food-led formats Marston's Tavern Table and Marston's Two for One, as well as town centre brands Pitcher & Piano, Que Pasa and Bluu.

In comparison, like-for-like wet sales increased by just 0.6 per cent against strong comparatives with 2006, which included a much better summer as well as the World Cup.

Brewing arm the Marston's Beer Company saw total turnover down to 84.1m from 86m in 2006.