Marston's forecasts lower profit
Pub operator Marston’s said it expects to post a dip in profit this year due to weakening food sales.
The Wolverhampton-based firm, which has pubs across the West Midlands, said it expected to report underlying profit before tax of about £101 million, compared to £104m last year.
Marston’s blamed the dip on slower growth at its food-led pubs, which only saw like-for-like sales growth of 0.1 per cent, due to weak consumer confidence and high levels of competition in the casual dining sector.’
The group announced it will accelerate it’s pub disposal programme from £40m to £70m this year following an increase in interest from buyers.
The pub chain also said it will invest in staff training and digital marketing next year.
Group turnover was up three per cent to £1.2 billion in the year to the end of September, while total pub sales increased three per cent, including like-for-like sales growth of 0.8 per cent.
The group’s taverns business saw like-for-like sales growth of 1.9 per cent. Total volumes at the company’s brewing arm were up one per cent.
Marston’s chief executive Ralph Findlay said: "Our drinks businesses have performed well, achieving further growth against an exceptionally strong 2018.
"Wet-led pubs have led the charge continuing their positive trajectory and food pubs have achieved modest sales growth.
“Operationally, we remain focused on further improving our proposition and plan to make additional investment in both our pub teams and digital marketing in the forthcoming year.
“Our principal focus is on reducing our net debt by £200 million and creating a high quality business that is cash generative after dividends and capital expenditure.
"We are making encouraging progress and have decided to increase the pace of our disposal programme this year to accelerate the achievement of this target."
Marston's will publish its preliminary results on November 27.
Alasdair Ronald, of brokers Brewin Dolphin, said: "Marston’s trading statement confirmed that the pubs focusing more on food are underperforming compared to those where the majority of the turnover is from drink sales – mainly due to oversupply in the casual dining sector.
"Economic uncertainty is likely to continue to impact this area as this is discretionary expenditure which can easily be curtailed."