Marston's sales froth higher at year-end with margins ahead

In the 12 months to 3 October, Marston's drove LFL sales growth of 1.7% in food and 1.7% in wet, as expected.

In the last 11 weeks of the year, LFL sales grew 2.2% as the group settled into its new business plan, which involves selling under-performing wet-led pubs and replacing them with more pub-restaurants.

Chief executive Ralph Findlay said the disposal programme of smaller wet-led pubs has substantially been completed now.

"These actions, together with the success of franchise, have significantly transformed our pub business over the last three years."

Operating margins have frothed above last year's as 25 new pub-restaurants were completed in the financial year and Findlay confirmed the group planned to open at least 20 'Destination' pub-restaurants, two sites under its premium 'Revere' style and five inn-style 'Lodges', with a good pipeline of sites to maintain similar levels of expansion "for the foreseeable future".

The franchise business, which now operates around 550 sites, perform strongly, while leased pubs saw like-for-like profits up by roughly 4% compared to last year.

The brewing arm, which was strengthened by the acquisition of the Thwaites' beer brands in March, has grew brand beer volumes 15%, or 5% if Thwaites is not included.

Findlay added: "In brewing, the integration of the Thwaites' brewing business has gone well, and we are well placed to continue to exploit the market growth in premium and craft beers and ongoing growth in the off-trade."

Analysts at Langton Capital noted that Marston's is performing "somewhat more strongly than the industry as a whole", according to the Peach Tracker data.

"We believe that the rugby is broadly neutral, that the cool weather over the summer has not been unduly damaging and that big days remain important. We see the balance sheet as robust and the new site pipeline in secure."

Broker N+1Singer was also positive on the company: "The key point is that in a dull sector it has outperformed on the key LFL metrics and not suffered margin decline like most of its peers. Moreover, it has grown EPS by a strong 10% in the year (all organic) in a period when frankly the key peers have eked out anaemic growth at best."