Pub giant toasts success as food improves profit

The group, which has about 200 pubs in Yorkshire, said its performance in the 26 weeks to the start of April was boosted by food sales growth of 2.5 per cent in its managed pubs arm. Coupled with 0.5 per cent sale growth in drink, that helped the managed division grow by 1.4 per cent.

Marston's last year launched is growth strategy, dubbed the "F-plan", making food a central pillar to capitalise on consumers trading down from restaurants.

"One of the reasons we're doing well is people are still going out but they are being much more canny about how they spend their money," said chief executive Ralph Findlay. "The average spend (in Marston's pubs) is about 6 – it's attractive."

Trading over Easter was good, and slightly ahead of last year, Marston's added.

The group, which has an estate of 2,167 pubs, said its brewing arm was also buoyed by the shift to food. In Marston's beer company, ale volumes were in line with last year, while premium ale volumes grew four per cent.

"The kind of beers that we brew are the kind of beers that are doing well in the market, " said Mr Findlay. "If people look for quality wines with food, they also look for quality beers."

It has also pioneered a new cask beer technology, Fastcask, which enables cask beer to be used immediately in pubs. Traditional methods previously meant cask ale had to be rested for a couple of days before being used. However, Marston's patent-pending technology, which uses gelatine beads to continue the fermenting process, could open up cask ales to more pubs and sporting venues.

"You can buy this product from us and use it straight away," said Mr Findlay, who believes Fastcask is a medium-term opportunity.

Marston's also reiterated its commitment to opening new pubs, revealing six have been opened so far this financial year, with a target of 15.

It intends to open 60 food-focused pubs over the next three years, mainly new-build pub-restaurants. Mr Findlay said specific sites have yet to be determined, but some could be in Yorkshire.

"Yorkshire has actually been quite good for us," he said.

"We have got some branded outlets such as the Pitcher & Piano in York and Harrogate and they have been performing well. We have also got some

larger food pubs that have been doing well.

"We have found Yorkshire to be a good trading area."

Mr Findlay said the group continues to turn around its estate of 1,676 tenanted and leased pubs, which saw a 4.6 per cent sales slide on a year ago, although above the 4.9 per cent decline reported in January.

Marston's is trying to move landlords on to innovative retail and tracker agreements, and has so far signed up 83 per cent of its tenanted estate. The retail agreement removes some of the responsibility from landlords, while giving them 20 per cent of turnover, under a franchise deal.

"It's helped with pubs where we struggled to find tenants on a traditional operation," said Mr Findlay. "They just need selling skills and commitment. It's worked extremely well for us."

Analysts said Marston's solid performance makes the group a preferred choice among its peers.

"Marston's remains 'steady as she goes'," said Seymour Pierce analyst Hugh-Guy Lorriman. "We remain buyers of Marston's as the 'unloved' value play of the pub sector. We make no change to forecasts at this time although the statement hints at possible upgrades before the year is through."

Roadshow aims to boost pubs

Marston's is to stage a trade-only roadshow to help its Yorkshire pub operators drive their businesses forward.

The day-long event at York Racecourse on April 13 will include business-building ideas, cost savings, tried and tested pub event suggestions and case studies on how to run a successful pub and make the most during the summer trading months.

The event, which runs between 10.30am and 4pm, will focus heavily on maximising earnings from the World Cup, which takes place during the summer.

For more details and to book a place, call 0845 605 4545 or visit www.marstonspubcompany.co.uk