Pub operator Marston’s will continue its push towards more food-led pubs next year, with around £140m budgeted for dozens of new sites.
Figures from the company reveal that capital expenditure reached £142m last year, including £68m on the construction of 25 pub-restaurants.
It expects that capital expenditure will be around £140m in 2016, including around £70m for the construction of at least 20 new pub-restaurants, two Revere bars and five lodges. Food sales now generate as much as 60% of its revenues in some of its sites.
Ralph Findlay, CEO of Marston’s, says that with the three-year transformation of its pub portfolio towards an optimised estate now largely complete, the company has high hopes for what the future holds.
“We approach 2016 with our business successfully positioned at the forefront of industry trends with high quality, well-invested pub assets which are fit for the future,” he said. “Looking forward, we remain on track to open at least 20 new-build pubs this year and have in place a carefully-selected site pipeline in key regional locations for 2016 and beyond. While new-build, food-led pubs remain our core growth driver, we have evolved our strategy to capitalise upon other opportunities for expansion where we see attractive returns potential.”
In the last two years, Marston’s has reduced the size of its pub estate from 2,050 pubs to a core 1,600 pubs, which now substantially completes its disposal programme.
Importantly for the chain, average profit per pub, a good indicator of pub quality, has increased to around £100,000, up by 40% since 2012. Underlying pre-tax profits at the chain increased 10% to £91.5m on sales up 7% to £845m.
Around 78 % of profits from Marston’s pubs are now generated by managed or franchise-style pubs in which Marston’s has direct control over the retail offer, ensuring that it is better positioned to deliver consistent service, standards and value across the estate. It expects this proportion to increase as it builds more pubs and converts most of the remaining tenanted pubs to franchise-style agreements.