Marston’s takes £1m hit from snow
● Pubs and brewing group ‘disciplined’ in face of price-cutting
“We are pleased with our progress, which included record total retail sales in our pubs of £4 million on Christmas Day.”
RALPH FINDLAY
Marston’s, which has ear‑ marked Scotland for expan‑ sion, revealed it will take a £1 million profit hit after snow storms slowed the flow of cus‑ tomers to its pubs.
The chain, whose brands include Two For One and Pitcher & Piano, yesterday reported a 0.9 per cent drop in unadjusted like‑for‑like sales over the 16 weeks to 20 Janu‑ ary, revenues having been knocked an estimated 2 per cent by the winter weather.
“Snow and icy weather towards the end of the peri‑ od, both in early December and between Christmas and New Year year, caused some unavoidable disruption to the business,” the pubs and brew‑ ing group said.
“We estimate the profit impact of this to be £1 mil‑ lion.” Marston’s has about 15 pub restaurants north of the Border, including The Spi‑ ral Weave community pub in Kirkcaldy (pictured) and The Steam Wheeler in Braehead.
Excluding the weather‑relat‑ ed hit – which mostly took place in a two‑week period – like‑for‑like sales for the divi‑ sion were up 1.1%, while total sales increased by just under 5 per cent.
Marston’s said higher costs were still squeezing profit margins, but added that it was maintaining a “disciplined approach” amid significant discounting across the sector.
Shares fell nearly 6 per cent in early trading, but later recovered to close down 1.3 per cent, or 1.5p, at 113.1p.
The profit hit overshad‑ owed a 2.6 per cent rise in like‑ for‑like sales at its taverns business on the back of an improved drinks range, as well as a 33 per cent jump in vol‑ umes at its own brewing busi‑ ness which benefited from a “strong brand portfolio”.
The company’s leased estate also performed well and is expected to see a 2 per cent rise in profits, Marston’s said.
Greg Johnson, an analyst at Shore Capital Markets, has lowered pre‑tax profit fore‑ casts by £1m to £110m to reflect the weather impact, but oth‑ erwise was positive about the company’s performance.
“Marston’s has issued a sol‑ id underlying trading update which is consistent with our full‑year trends,” John‑ son said. “Encouragingly, we understand like‑for‑like sales trends were consistent before and after the two weather‑ affected weeks, whilst mar‑ gins are said to be consistent with our estimates.”
Ralph Findlay, chief execu‑ tive of Marston’s, said: “We are pleased with our progress, which included record total retail sales in our pubs of £4 million 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.”
Marston’s has been expand‑ ing its estate, adding 19 new‑ build pubs to its portfolio in its 2017 financial year.
It is now on track to open 15 pub‑restaurants and bars, as well as six lodges in 2018, hav‑ ing already opened three pub‑ restaurants and two lodges in the year to date. “We look for‑ ward to continuing to provide our customers with a great pub experience and excellent serv‑ ice, as well as delivering value for shareholders, over the year ahead,” Findlay added. The company bought famous Scottish ale brand Mcewan’s last year, which is best known for Export, an India pale ale.