Marston’s offloads £90m portfolio as full-year profits grow

28-Nov-2013 - Last updated on 26-Apr-2021 at 17:08 GMT

The Wolverhampton-based operator has eported full-year pre-tax profits of £69.8m, compared with a £135.5m loss last year

Marston’s has sold more than 200 of its sites for £90m as the brewer and pub operator looks to cut the cost of servicing its £1bn debt and improve the quality of its estate.

The deal with NewRiver Retail includes 158 community pubs from Marston’s Taverns estate and 44 leased pubs.

Marston’s, which has 2,050 pubs across the UK, will manage the pubs for five years in return for a management fee, with the Wolverhampton-based operator providing a minimum income guarantee for the first four years.

Chief executive Ralph Findlay said the disposals would accelerate the firm’s new-build programme and strip out many of its lower-turnover pubs.

“This disposal will enable us to reduce the cost of servicing our securitised debt, is consistent with our strategy and improves the quality of our estate,” said Findlay. “It will also assist with financing the accelerating rollout of our new-build pub-restaurants which are achieving good returns.

“In 2013 we achieved good growth in turnover and operating profit despite significant challenges. This reflects our unstinting focus on what our customers want: excellent service and value for money in high quality pubs and bars. In 2013 we served 30 million meals, with food now the principal reason for around 80 per cent of customer visits in our Destination pubs.”

Full-year profits

The announcement comes as Marston’s reported full-year pre-tax profits of £69.8m, comparing with a £135.5m loss last year. Revenue rose by 8.8 per cent to £782.9m for the year to 5 October 2013, with underlying operating profit also increasing, by 6.6 pre cent to £168.3m.

The company sold 130 pubs and other assets over the past year for around £50m, and said it was targeting another £60-70m of disposals per year in 2014 and 2015 from its Taverns estate.

The company’s performance in the second half of the year was stronger than the first, with year-on-year operating profit in the first half down by 1.5 per cent, but up by 12.6 per cent in the second half. Trading since the year end has also been strong, with like-for-like sales up by 3.1 per cent in the business’s destination and premium divisions, driven by a food sales increase of 4.6 per cent.

NewRiver Retail intends to put the newly acquired pubs to alternative uses, primarily into food convenience stores and restaurants.