UK brewery group set for smoking ban

Pub and brewery group Marston’s said today its investment plans should help it overcome the impact of the UK-wide smoking ban later in the year.

The group, renamed from Wolverhampton & Dudley last year, said that following a programme of investment over the last year more than 90% of its pubs now have gardens or outside areas, with many fitted with screens and heaters.

Marston’s added that it had made “excellent progress” in developing its food offering at Marston’s Inns and Taverns, with food sales now accounting for 33% of trade at its managed pubs.

The group, which operates 2,518 pubs, said that these developments should offset the potential and “uncertain” impact of the smoking ban when it comes in force in Wales from April and in England from July.

Analysts at Altium Securities said: “Whilst the impact of the smoking ban remains uncertain, we believe that Marston’s is one of the best positioned companies to weather this challenge.”

The news came as the company revealed trading in the 24 weeks to March 17 had been in line with expectations.

Sales at its managed pubs division, which includes the Pitcher & Piano brand, grew by 7%, boosted by a 13.9% growth in like-for-like food sales, while its tenanted pubs group, Marston’s Pub Company, had experienced “satisfactory” trading with profits ahead of the same period last year.

It added that beer volumes at Marston’s Beer Company were down over last year, however, premium ale volumes and market share rose amid increased marketing, particularly in Marston’s Pedigree.

The group said the brand has benefited through its sponsorship of the England and Wales Cricket Board and becoming the principal sponsor of Sky Sports’ coverage of the Cricket World Cup.

The company said that performance at its Eldridge Pope estate, acquired in January, had been strong but added that cost savings of around £4.6m (€6.8m) a year would kick in from April this year.

Marston’s Inns and Taverns opened seven new managed pubs in Brighton, London, Hertfordshire, Cheshire, Nuneaton, Bristol and Exeter throughout the six month period.

Panmure Gordon analysts raised their target price for the group after citing an improvement in underlying sales.

Shares in the company were down 7p at 444p.