Marston's buys 15 former Mitchells and Butlers' pubs
Pubco and brewer Marston's has reached an agreement to buy 15 former Mitchells & Butlers' pubs from property investment company Aprirose, according to a trading update ahead of preliminary results next month.
The company said it expects to complete and lease-fund the acquisition in H1 2019, with plans to invest £4m post acquisition in pursuit of a target EBITDA of about £0.5m in 2019 and at least £1m in 2020.
Meanwhile strong summer trading at pubco and brewer Marston's is expected to boost annual profits for the company after a lacklustre first half of the year.
Pre-tax profit for the year ended 29 September 2018 is expected to be about £104m, up from £100.1m year-on-year. The company also said it expects a 15% increase in group turnover to £1.1b.
Total pub sales increased by 3.2% in 2018, helped by the group's pub expansion programme that saw the opening of 14 pub restaurants and bars and seven lodges in the year. A further 10 pub restaurants and bars and five lodges are planned for 2019.
Like-for-like sales were up by 0.6%, largely as a result of an unusually hot summer and England's performance in the World Cup; like-for-like sales rose 1.6 per cent in the last 10 weeks alone.
Wet-led pubs pubs performed strongly during the period, with managed and franchised like-for-like sales growth rising by 3.8%, but performance at food-led destination pubs was hampered by poor weather conditions in H1 alongside weakened trading during the World Cup.
"We have seen clear benefit from our balanced portfolio having achieved good growth in wet-led pubs and from brewing, maximising the trading opportunities provided by the good summer weather and World Cup," commented Marston's chief executive Ralph Findlay.
"Although trading in destination food-led pubs was weaker, this predominantly reflects issues beyond our control relating to unseasonal weather extremes and the World Cup.
"However we are encouraged that our dining pubs are now seeing improving momentum and we expect to make further progress in 2019. We are meeting the demands of our customers and continue to manage the inflationary cost environment well, which gives us confidence for the future.''
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