Marston’s shares slip as its warns on profits after weak food sales

Pub group Marston’s has seen shares slide after weaker food sales weighed down on its annual profits.

The pub group and brewer said it expects to deliver a £101 million underlying pre-tax profits for the year to September 28, down from £104 million last year.

Ralph Findlay, chief executive officer of the Wolverhampton-based group, said its food-focused pubs delivered only “modest” growth, although this was offset by stronger beer sales.

He hailed “further growth” in the company’s drinks business, as its drink-orientated Taverns business “performed strongly”.

Group sales rose 3% to £1.2 billion over the year, while the company saw higher operating profits in the taverns and brewing arms.

The company said that total pub sales also increased 3%, on the back of its pub expansion programme and like-for-like sales growth of 0.8%.

Its beer-led pubs reported 1.9% like-for-like annual growth, boosted by 5.4% growth in the past 10 weeks.

Meanwhile, the company’s brewing business reported a 1% rise on sales volumes against a strong 2018 period.

Sales in Marston’s premium and food-focused sites reported only 0.1% like-for-like growth, as stronger drink sales were offset by lower food sales.

Marston’s added that it is “as prepared as it can be” for a potential no-deal Brexit on October 31 and has implemented “contingency plans” to help it during the key Christmas period.

Mr Findlay said: “Wet-led pubs have led the charge, continuing their positive trajectory, and food pubs have achieved modest sales growth.

“Operationally, we remain focused on further improving our proposition and plan to make additional investment in both our pub teams and digital marketing in the forthcoming year.

“Our principal focus is on reducing our net debt by £200 million and creating a high-quality business that is cash generative after dividends and capital expenditure.

“We are making encouraging progress and have decided to increase the pace of our disposal programme this year to accelerate the achievement of this target.”

Shares in the company sank by 6.3% to 114.3p on Tuesday morning.