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Marston's to take hit from snowy weather but Christmas Day sees record sales
Marston's said on Tuesday that it took a hit from the snowy and icy weather in early December and between Christmas and New Year, although its pubs saw record sales on Christmas day.
In a trading update for the 16 weeks to 20 January, the pub group said total sales in destination and premium were up 4.9%, reflecting the contribution from the estate expansion last year. Like-for-like sales excluding the impact of the snow-affected weeks were up 1.1%. The weather impact on LFL sales was around 2% and on an adjusted basis LFL sales were down 0.9%, with Marston's estimating a profit impact of £1m.
In taverns, LFL sales were up 2.8% thanks to the performance of franchise-style agreements and an improved drinks range, while the lease estate performed well, with profit growth estimated at 2%.
In brewing, Marston's Beer Company achieved good growth in the period to date, with own-brewed volumes up 33%. The group said it was benefiting from the acquisition of Charles Wells Brewing Business, distribution gains achieved in 2017 and a stronger brand portfolio.
Marston's remains on target to open 15 pub restaurants and bars and six lodges this year. It has opened three pub-restaurants and two lodges in the year to date, including a 104 bed lodge in Ebbsfleet.
Chief executive officer Ralph Findlay said: "We are pleased with our progress, which included record total retail sales in our pubs of £4 million on Christmas Day - 5.4% 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."
Shore Capital analyst Greg Johnson said: "Overall, we see this update as consistent with both recent trends and our full year trends, with our full year estimates predicated on 1% growth in LFL sales at the D&P division, noting that comparatives get easier as the year progresses (+1.5% in the first 16 weeks of the year and flat for the last 22 weeks). Conservatively, we lower our 2018F profit before tax estimate by £1m to £110m (EPS: 14.3p) to reflect the weather impact with the assumption that it does not recover this lost profit as the year progresses."