Marston results disappoint

JOHN SHEPHERD

Brewing analysts disappointed with yesterday's full-year results from Marston, Thompson & Evershed feel the company must accelerate disposal of poorly performing tenanted pubs.

Shares in the brewer, best known for its Marston's Pedigree bitter, fell 8p to 293p, with a 5.6 per cent rise in taxable profits to pounds 24.6m coming in slightly below analysts' forecasts. There was some cheer, though, for the 10.1 per cent rise in the dividend to 6.56p.

David Gordon, managing director, said reasons for the disappointment were no Easter trading (the holiday came after the 25 March year-end), and the loss of 213 weeks' trading in 22 houses due to redevelopment work.

Marston has written down the book value of its pub estate by pounds 9.4m, or 4.3 per cent. The value of the 653 pubs was reduced by 11 per cent, while the value of the 228-strong managed estate was increased by 2.5 per cent.

This difference was construed by analysts as a sign that the tail-end of the tenanted estate was continuing to come under pressure from changes taking place in the industry. One analyst said almost a quarter of the tenancies were seeing a reduction in trade into double figures, and many needed to be replaced by larger, better-located premises.

Profit forecasts in the City for Marston for the current year have been reduced by around pounds 1m to pounds 27m, although a further dividend increase to around 7.1p per share is still expected.