UK pub and brewing group hit by flood bill

Marston’s – formerly Wolverhampton & Dudley Breweries – has a particularly strong presence in the Midlands and Yorkshire areas affected by flooding after buying the Mansfield Brewery Company in 1999.

But the company added that all but five of the pubs had been reopened by the year-end.

Marston’s said it also faced pressure from rising interest rates after seeing a 1% rise in the cost of its £500m (€719m) banking facilities over the course of the year. It has moved to fix its borrowing costs.

Marston's said like-for-like sales at its 550-strong chain of managed pubs were 4.6% ahead over the full year, despite slipping back by more than 2% in the 10 weeks to the end of July due to the weather.

Food now accounts for more than a third of the company’s total retail sales and performed strongly with 13% growth, offsetting a 0.6% increase in like-for-like drinks sales. Marston’s saw an average 3% increase in profits from its 1,722 tenanted pubs.

Marston’s also cheered a near 6% rise in sales volumes from its flagship Marston’s Pedigree beer, while sales of Jennings Cumberland Ale soared 30%.

The company said its brewing business outperformed the wider market with 6% volume growth, and toasted a good performance from Old Thumper and Fortyniner brewer Ringwood, which it bought in July.

Smoking bans introduced in Wales and England in April and July had so far had “no discernible impact” on trading, Marston’s said.

But chief executive Ralph Findlay added: “We are more cautious about the impact of this legislation over the coming months.”

Marston’s also faces cost pressures from above-inflation rises in energy and raw materials costs, although the company said it had acted to fix energy prices over the current financial year.