Pre-close Trading Statement
Marston's PLC
03 April 2008
3 April 2008
Marston's PLC
Pre-Close Trading Statement
The Board of Marston's PLC issues the following trading update following the end
of the first half of the current financial year on 29 March 2008.
Trading
In Marston's Inns & Taverns, our managed pub division, like-for-like sales for
the 24 weeks to 15 March 2008* were 0.3% above last year against strong
comparatives, with reported like-for-like sales growth of 7.0% for the same
period last year. Food sales have continued to show excellent like-for-like
sales growth of 7.8% in the same 24 week period, although higher margin wet
sales and machine income were 3.1% and 10.3% below last year respectively. Our
new build programme continues to generate attractive returns with 8 new pubs
opened in the first half-year, and we expect to open a further 12 in the second
half-year.
In Marston's Pub Company, our tenanted and leased pub division, like-for-like
profit was slightly below last year in the period with growth in rental income
offset by volumes and machine income in line with market trends.
In Marston's Beer Company, whilst overall volumes remain below last year we have
increased market share with continued good performance in the premium ale
segment.
Costs across the Group have been well controlled, notwithstanding inflationary
pressures in brewing and food purchasing, but the changes in sales mix described
above will continue to have an impact on operating margins.
In our interim results statement due to be issued on 23 May 2008 we expect to
report Group sales up by around 4% compared to last year for the 26 week period,
reflecting the acquisitions of Sovereign Inns, Eldridge Pope and Ringwood
Brewery in 2007. Operating profit (before interest and taxation) is expected to
be in line with last year, although profit before taxation will reflect the
higher interest costs associated with the £150 million share buy-back programme
in 2007. Earnings per share will also reflect the related reduction of around
9.5% in the average number of shares in issue and an expected lower underlying
rate of taxation. Underlying cash generation remains strong with net debt
estimated to be approximately £1.27 billion at the half year-end.
Outlook
We remain cautious about the outlook for 2008, and the recent increase in beer
duty adds to the pressures on tenants and free trade operators in an already
challenging trading environment.
However with our high quality pub estate and our continuing investment in
new-build pubs, we are well positioned to exploit favourable trends including
market growth in casual dining, and our value for money offers and mid-market
position are well suited to the current economic climate. Notwithstanding the
current testing market conditions our expectations for the financial year as a
whole remain unchanged.
* In 2007 Easter fell in the second half-year. Like-for-like sales are reported
for the 24 week period in order to be on a comparable basis to last year.
ENQUIRIES:
Marston's, PLC Hudson Sandler
Ralph Findlay, Chief Executive Andrew Hayes
Paul Inglett, Finance Director Nick Lyon
Tel: 01902 329516 James White
Tel: 020 7796 4133
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