Poor festive weather sends £1m chill through Marstons
PUB OPERATOR Marston’s has taken a £1m hit to annual profits after trading in the Christmas period was hit by snowy and icy weather.
The impact of weather on its like-for-like sales in the 16 weeks to January 20 was around 2 per cent.
However, like-for-like sales excluding the impact of the two snow-affected weeks rose 1.1 per cent.
The company, which brews ales such as IPA, Old Speckled Hen, Brakspear and Mansfield, said own-brewed volumes rose 33 per cent in the period. The firm also runs over 1,500 pubs across the UK.
Marston’s said margins fell slightly from last year due to cost increases, but were in line with expectations.
Like other operators, Marston’s has also been battling increased costs, most notably from wage inflation, rising property costs and unfavourable currency exchange rates.
Marston’s said it is on target to open 15 pub restaurants and bars and six lodges this year.
The group said it made progress in the period with growth in both sales and underlying earnings, helped by the acquisition of the Charles Wells Brewing Business last May and the contribution from the 19 newbuild pubs over the past year.
Marston’s said it maintained a disciplined approach to operating margins without recourse to the significant discounting which has remained prevalent in the sector. Margins remain in line with expectations and are slightly below last year reflecting the cost increases.
The firm’s CEO Ralph Findlay said: “We are pleased with our progress, which included record total retail sales in our pubs of £4m on Christmas Day – 5.4 per cent higher than last year.
“We continue to achieve growth against tough market conditions and are benefiting from investment in both pubs and brewing. We look forward to continuing to provide our customers with a great pub experience and excellent service, as well as delivering value for shareholders, over the year ahead.”
Analyst Greg Johnson at Shore Capital Markets, has lowered pre-tax profit forecasts by £1m to £110m to reflect the weather impact, but otherwise cheered Marston’s performance.
“Marston’s has issued a solid underlying trading update which is consistent with our full-year trends,” he said.
Marston’s has issued a solid underlying trading update. Greg Johnson, analyst at Shore Capital Markets