Marston's acquires Charles Wells amid rising profits
Premium pubs and beer business Marston's has toasted another rise in profits, as it snapped up Young's and Bombardier brewer Charles Wells in a £55 million deal.
Marston's - which owns Two For One and Pitcher & Piano - released details of the acquisition alongside its half-year results, which showed a 3% rise in underlying revenue to £440.8 million in the 26 weeks to April 1, despite the later scheduling of the Easter holidays this year.
Underlying pre-tax profit for the period rose 3% to £33.7 million.
The acquisition of the Charles Wells Brewing and Beer Business will raise Marston's ale market share up from 11% to 16%, bringing brands like Young's, Bombardier, and McEwan's under the same roof as Marston's labels including Hobgoblin, Wainwright and Lancaster Bomber.
Marston's said that Bedford-based Charles Wells will bolster its supply chain, offering new lager brewing and canning operations, and "opportunities to further improve efficiencies" in brewing packaging and logistics.
Chief executive Ralph Findlay said: "We are delighted to have agreed to acquire Charles Wells Brewing and Beer Business.
"It is a high quality brewing business offering us opportunities to extend our trading area in the South of England and Scotland, and brings a range of well-known and popular brands into our portfolio.
"We also aim to develop further our range of international licensed brands, and look forward to working with our new overseas partners, including Estrella Damm, Erdinger and Kirin."
The company has also agreed to buy up seven new pubs for £13 million from an undisclosed national pub operator, which is on top of another three premium bars to be purchased for £8 million from Pointing Dog.
Marston's said in its half-year earnings release that it also expects to open around 20 gastropubs, eight lodges and three premium bars this year - which does not include its recent acquisitions.
The company said it has had a "solid start" to the second half of its financial year, thanks in part to the later scheduling of Easter, and is confident that it will reach annual targets.
Marston's shares were down around 1.8% in early trading on Thursday, despite better than expected first half results.
Sahill Shan, an analyst at N+1 Singer said: "Interims this morning are bang in line with our expectations, with PBT (profit before tax) growth up 3% to £33.7 million.
"This modest growth partially reflects the fact that Easter has fallen into H2 this year and this typically is worth an incremental £1 million at the profit before tax level."
Mr Shan said he expects no material change to this year's forecasts for earnings per share, but is expecting a near 9% jump for full-year 2018.
He added: "In a difficult sector Marston's remains our core pick on steady growth and yield considerations."