Marston’s margins under pressure as beer sales slip

Pub company Marston’s has said the recent hike in beer duty has heaped further pressure on already tenants already struggling to maintain margins.

Marston’s said drink sales in its managed pub division (Marston’s Inns & Taverns) had fallen 3.1% in the 24 weeks to 15 March.

It added that beer volumes in its tenanted division (Marston’s Pub Company) were also in decline.

Food sales in Inns & Taverns grew by 7.8% but given the lower margins in food, and the decline in high-margin wet sales, like-for-like sales growth nudged ahead by just 0.3% overall.

Profits also fell in the tenanted and leased business where growth in rental incomes from new tenants was off-set by a fall in wet sales.

Mark Brumby, analyst at Blue Oar Securities, said: “Times really are tough and they would not appear to be getting any easier [but] Marston’s is in a much better position than a number of smaller leasehold and lower asset quality operators to weather the current storm.”

• Marston’s has put 47 of its managed pub on the market as leased through property agents Christie & Co.

The majority of the pubs are offered on 10 to 20 year tied leases and are spread across the country from Yorkshire to Dorset.

Neil Morgan, head of pubs at Christie & Co said: “Marston’s Pub Company offers a comprehensive support package, so we’re confident that the new lease opportunities will appeal to both established pub operators and new lessees.”

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