Marston's to continue pub disposals as full-year profits fall

Brewer and pub operator Marston's today said it will continue pruning its estate after full-year figures revealed a 13% fall in profit.

In the 53 weeks to 4 October, the group's pre-tax profit slumped to £85.1m (2007: £98m), affected in part by increased interest costs after share buy-backs.

Turnover at the company's estate of 2,250 pubs increased 2% to £666.1m (2007 £652.8m).

Marston's, which sold 43 pubs last year for around £22m, said it would continue to dispose of sites that weren't financially viable in the long term, and expects proceeds from sales of at least £20m.

It is focusing on managing costs tightly and will almost halve its capital expenditure in 2009 from £117m in the year to 4 October to below £60m.

The company described the chancellor's decision to increase beer tax further in the Pre-Budget Report as "onerous", a move that has courted industry fury.

Ralph Findlay, chief executive of Marston's, said: "We remain cautious about the immediate trading outlook but are confident that steps already taken in respect of capital expenditure and cost management are appropriate for the current environment."

Marston's said trading in November at its managed pubs had been weak with like-for-like sales down 2.9%.

Rival operator Greene King this week revealed that its half-year profits had slumped almost £11m to £60.7m as the drop in consumer spending combined with increasing running costs created "one of the toughest trading periods for many years".

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By Chris Druce

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