Snowy weather knocks Marston’s profits by £1m
Like-for-like sales at its destination and premium division took a 2% hit due to snowy weather.
Marston’s has said it will take a £1 million profit hit after snow storms slowed the flow of customers to its pubs.
The Two For One and Pitcher & Piano owner reported a 0.9% drop in unadjusted like-for-like sales over the 16 weeks to January 20, having been knocked around 2% by the winter weather.
“Snow and icy weather towards the end of the period, both in early December and between Christmas and new year, caused some unavoidable disruption to the business,” the premium pubs and beer group said.
“We estimate the profit impact of this to be £1 million.”
Excluding the weather-related hit – which mostly took place in a two-week period – like-for-like sales for the division were up 1.1%, while total sales increased by 4.9%.
Marston’s said higher costs were still squeezing margins, but assured it was maintaining a “disciplined approach” despite significant discounting across the sector.
Shares were down nearly 6% to around 107.7p in morning trading.
It overshadowed a 2.6% rise in like-for-like sales at its taverns business on the back of an improved drinks range, as well as a 33% jump in volumes at its own brewing business which benefited from a “strong brand portfolio”.
The company’s leased estate also performed well and is expected to see a 2% rise in profits.
Greg Johnson, an analyst at Shore Capital Markets, has lowered pre-tax profit forecasts by £1 million to £110 million to reflect the weather impact, but otherwise cheered Marston’s performance.
“Marston’s has issued a solid underlying trading update which is consistent with our full-year trends,” he said.
“Encouragingly, we understand like-for-like sales trends were consistent before and after the two weather-affected weeks, whilst margins are said to be consistent with our estimates.”
Chief executive Ralph Findlay said: “We are pleased with our progress, which included record total retail sales in our pubs of £4 million on Christmas Day – 5.4% higher than last year.
“We continue to achieve growth against tough market conditions and are benefiting from investment in both pubs and brewing.”
Marston’s has been expanding its estate, adding 19 new-build pubs to its portfolio in its 2017 financial year.
It is now on track to open 15 pub-restaurants and bars, as well as six lodges in 2018, having already opened three pub-restaurants and two lodges in the year to date.
“We look forward to continuing to provide our customers with a great pub experience and excellent service, as well as delivering value for shareholders, over the year ahead,” Mr Findlay said.