Marston's serves up decent third-quarter result

Wet-led pubs, that is those that are focused on drinks over food, as well as leased pubs and the brewing business all benefited "significantly" from the World Cup and, despite the negative impact on food-led pubs, the tournament in Russia was positive overall.

Like-for-like sales were up 0.9% for the first 16 weeks of the FTSE 250 group's second half-year, or up 2.0% since snow-hit April.

Total managed and franchised pub sales bubbled up 5.2% for the 42 weeks of the year so far, with LFL sales up 0.3% and the rest from the pub expansion programme.

In the dining-led Destination & Premium segment, LFL sales fell by 1.2% in the last 16 weeks compared to a 1.8% in the first half, meaning the year to date is down 1.5%. Operating margin was "only slightly below" last year and in line with management expectations.

In wet-led Taverns, sales grew 5.0% in the 16 weeks, up from 2.9% in the first half and so 3.8% ahead for the YTD. Leased profits for the 42 week period are estimated to be 2% ahead of last year.

The brewing arm grew volumes 61% for the 42 week period with good growth in the underlying business and benefits coming from the Wells acquisition and the overall portfolio increasing market share.

Chief executive Ralph Findlay said: "We are encouraged by our stronger trading performance in the second half-year, including the benefit of recent good weather and the impact of the World Cup in our Taverns estate and in Marston's Beer Company."

Findlay said he remained confident of delivering underlying earnings in line with expectations for the full year and saw "further opportunity in brewing" following the integration of Wells business.

Following the trading update broker Shore Capital said it was maintaining its full year PBT estimate of £107m and EPS: of 14.0p, although we shift circa £0.5m of operating profit from D&P to Taverns, which is predicated on flat LFL profit in the second half, when adjusted for net new pubs and last year’s acquisition of Charles Wells.

"We note comparatives for the balance of the year soften with D&P down c1% and Taverns broadly flat for the final 10 weeks of last year."

House broker Numis has an EPS forecast of 13.8p for the full year.