Marstons Regulatory News (MARS)

15 Apr 2009 07:00



  15 April 2009

MARSTON'S PLC ("Marston's")

TRADING UPDATE

The Board of Marston's PLC issues the following trading update following the end of the first half of the current financial year on 4 April 2009. The Interim Results for the 26 weeks ended 4 April 2009 will be announced on 22 May 2009.

Trading

We are on track to meet our expectations for the financial year, and have seen a modest improvement in our performance since the Annual General Meeting on 23 January 2009. 

The Interim Results will reflect the fact that the benefit to operating profit of trading over the Easter holiday, estimated to be approximately £2 million, fell in the first half-year in 2008 and in the second half-year in 2009. Trading over Easter was satisfactory. 

In Marston's Inns & Taverns, our managed pub division, like-for-like sales for the 27 weeks and two days to 13 April 2009 (including the Easter holiday in both years) were 1.8% below last year. Over the last 8 weeks and two days to 13 April 2009 like-for-like sales increased by 3.1%, including growth in sales of cask ales and reflecting the success of our value for money food offers. Operating margin is slightly below last year and is in line with our plans.

In Marston's Pub Company, our tenanted and leased pub division, underlying profit trends are broadly consistent with those reported at the Annual General Meeting although like-for-like profit comparisons for the first half-year will reflect the timing of Easter and the poor weather in the first two weeks of February 2009. Notwithstanding difficult market conditions, volume trends in recent weeks have shown an improvement. Good, well positioned pubs with sustainable rents operated by skilled and committed licensees continue to trade well.

In Marston's Beer Company, ale volumes increased by 16% in the first half-year. Premium ale, which is now 53% of our ale portfolio, increased by 39% following the acquisition of Wychwood Brewery in April 2008. Standard ale volumes were 6% below last year. Overall our brands performed well and increased market share in a weak beer market, reflecting the increasing popularity of regional cask ales in our pubs, a robust free trade performance, and a strong second quarter in the off-trade.

Financing and cash flow

Net debt and cash flow are in line with our expectations including proceeds of over £13 million from the disposal of 32 smaller pubs and other properties, achieving book values overall. We announced on 13 January 2009 that we have extended £295 million of our existing £400 million bank facility from August 2010 to August 2013 providing funding for our longer term requirements. As previously announced capital expenditure is expected to be around £50 million in 2009 compared to £117 million in 2008, consistent with our objective to reduce debt. 

Outlook

We have a clear focus on offering our customers exceptional value for money and good service; on promoting a sustainable and fair basis for our dealings with tenants and lessees; on the development of an outstanding range of ale brands; on the tight control of costs; and on cash management. 

Although we remain cautious because of the weak economy and generally challenging trading environment, we are well positioned to benefit from longer term trends in casual dining and demand for differentiated offers. 

ENQUIRIES:

Marston's, PLC Hudson Sandler

Ralph Findlay, Chief Executive Andrew Hayes

Andrew Andrea, Finance Director Nick Lyon

Tel: 01902 329516 James White

Tel: 020 7796 4133