PUB operator Marston’s is to create 300 jobs in Scotland in 2017 with a £10 million investment in expanding its sites north of the border.
The group’s Edinburgh-born chief executive Ralph Findlay said that since Marston’s entered the Scottish market in 2014 the business had been “going very well”.
Speaking as Marston’s lifted underlying pre-tax profits by seven per cent to £98 million on revenue up seven per cent to £906m for the year-ending October 1, Mr Marston revealed the extent of the company’s plans north of the Border.
Having invested £40m in Scotland, opening 13 bar restaurants and five lodges – 30 to 40-bed inns – Marston’s now employees 500 people north of the border.
“We will open 20 new pub restaurants and three premium bars, and between five and 10 lodges [in 2017],” said Mr Findlay. “Of those 20 pub restaurants, three or four will be in Scotland… and of the five to ten lodges, three of those will be in Scotland in Stirling, Livingston and Ravenscraig.”
In addition to recently opening Foundry 39 in Edinburgh, Marston’s is working on sites in Rutherglen, Kirkcaldy and Lenzie.
“By the end of 2017 we will have invested £50 million in the Scottish market. We’ll probably have about 800 employees by that time,” added Mr Findlay.
“We’re positive about the Scottish market and the family dining restaurants we have and the fact we think there is an opportunity for that kind of offer, which isn’t particularly well represented at the moment.”
Mr Findlay said Marston’s was still a relatively new business in Scotland, but had opened 13 pub restaurants and built four lodges since 2014.
“They are aimed at family dining, with value for money,” he said, noting that food represented 60 to 70 per cent of sales.
He added that Mr Findlay said the changes to drink driving regulations had not impacted the group as much as the wider industry given the predominance of food sales in the business.
When asked about the prospect of a second Scottish independence referendum Mr Findlay said he would “add it to the list of uncertainties”, adding: “What I’m more interested in is whatever happens, attitudes towards business and taxes ad those kinds of things. That’s what will ultimately, wherever we are in the UK, affect our decision to invest, whether it’s a UK government or not a UK government.”
Overall Marston’s has 1,559 outlets across the UK. In its 416 destination and premium pubs, sales were £440.8m at a margin of 20.5 per cent; its wet-led taverns business, of which there are 812 pubs, had sales of £221m at a margin of 25.3 per cent; and its leased division had sales of £50.7m at a margin of 47.7 per cent.
The average profit per pub was up eight per cent.
At a time of a perceived decline in the pub trade, Marston’s has grown the average profit per pub by 50 per cent since 2012 by focusing on creating a portfolio of family friendly food-led venues, in addition to its wet-led taverns.
Marston’s said its overall growth reflected like-for-like growth in our pubs, the positive impact of new openings, growth in our beer brands and the acquisition of Thwaites’ beer business, which it acquired in April 2015 for £25m.
Beer sales at the company were up 14 per cent to £193m, which reflected the integration of Thwaites.
“In our beer company, we are unique in the UK in having a wide range of local regional beers but we’re able to distribute those across about 9,000 pub; it give us a structural and competitive advantage,” said Mr Findlay.
“We’ve been very good at bringing out new products. New beers are roughly 20 per cent of our beer company turnover.”
When asked about the scale of the craft beer market, Mr Findlay said: “We are interested in further acquisitions if that makes good economic sense.”
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