MARSTON’S, the brewer and pub giant which makes the historic McEwan’s ale brand, has revealed its profits will be hit by £1 million because of “unavoidable disruption” to trade brought by snow and icy weather.
The company, led by Scot Ralph Findlay, said “two snow-affected weeks” hit like for like sales by around two per cent when trading for the 16 weeks to January 20 was compared with the same period one year earlier. That came despite its pubs division recording its best-ever Christmas Day takings, which rose 5.4 per cent to £4m.
Like for like sales were down by 0.9 per cent, Marston’s said, declaring: “We estimate the profit impact of this to be £1m.”
Analyst Alexander Mees at JP Morgan Cazenove said the investment bank had cut its profit estimate or Martson’s by one per cent to £110.7m because of the weather disruption.
“Marston’s is more susceptible to the effects of now and icy roads as its estate is focused more on rural locations than its peers and is weighted more heavily to the Midlands and the North,” he said.
Investors responded to the news by sending shares down three per cent in morning trading. The stock later rallied, and closed the day down 1.5p, or 1.3 per cent at 113.1p.
Away from its weather woes Marston’s, which has spent around £50m in building new pubs in Scotland in the last four years, highlighted the impact made on sales and earnings from the acquisition of the Charles Wells Brewing Business last May, as well as expansion of its estate over the period.
Marston’s bought the Charles Wells unit in a £55m deal which included the McEwan’s brand, famed for its Laughing Cavelier logo. McEwan’s is mainly sold in off-trade premises at present.
In addition to McEwan’s, which was first brewed in Edinburgh’s now demolished Fountainbridge Brewery in 1856, the deal brought Marston’s the Bombardier ale brand.
On the pub side, Marston’s also highlighted the contribution of the 19 new-build pubs in its 2017 financial year as total sales climbed by 4.9 per cent in the 16 weeks to January 20.
Stripping out the effect of the snow and icy weather, Marston’s said like for like sales had grown by 1.1 per cent.
The company noted that it had maintained a “disciplined approach to operating without recourse to significant discounting which has remained prevalent in the sector”.
It added that margins were in line with expectations and are “slightly below last year reflecting cost increases as previously guided.”
Marston’s flagged its continuing commitment to expand its portfolio, including in Scotland, stating that it is on target to open 15 pubs, restaurants and six lodges this year. It has opened three pub-restaurants and two lodges this year.
Marston’s currently has 16 pubs in Scotland and eight lodges.
The company’s on-trade operations are split between its Taverns division, which saw like for like sales rise by 2.6 per cent, and a leased estate, which reported profit growth of around two per cent. Marston’s said its own-brewed beer volumes climbed by 33 per cent, benefitting from distribution gains and a stronger brand portfolio. The company said it was on track to achieve targeted synergies from the Charles Wells buyout.
Mr Findlay said: “We continue to achieve growth against tough market conditions and are benefitting from investment in both pubs and brewing.”
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