Marston’s reveals plans to turn 200 pubs into convenience stores
- Credit: Archant
Marston's is to offload more than 200 pubs in a £90m deal that will see the sites turned into convenience stores and restaurants.
The portfolio of mainly community pubs has been sold to property group NewRiver Retail as it looks to meet high demand for residential store space from the major supermarkets.
Marston's, which has 2,000 pubs as well as the Hobgoblin and Pedigree beer brands, will use the proceeds to slash its £1bn debt and up spending on the roll-out of its new-build pub restaurants.
It will continue to manage the portfolio as a going concern until conversion into other uses or their sale by NewRiver.
The property firm said: 'The company has already received strong initial interest from the UK's major convenience store operators and supermarket groups.'
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Other uses such as branded restaurants, drive-through food outlets, residential, and medical centres have also been identified. The pub sites are particularly attractive because of their on-site car parking.
Details of the sale came alongside Marston's full-year results showing underlying profits 1% higher at £88.4m in the year to October 5 after a poor start to the year offset buoyant trading in the summer.
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Bottom-line profits revealed a return to the black, with pre-tax profits of £69.8 million against losses of £135.5m.
The Wolverhampton-based group, which owns the Pitcher & Piano chain, said the paying down of some of its mammoth debts will save it £6.7m a year in interest.
It follows the sale of 130 pubs in the last financial year, raising around £50m for the firm.
Marston's, which employs around 13,000 people, plans to increase construction of new premium pub restaurants, which are benefiting from robust sales.
The group said the new build sites drove a 2.2pc rise in annual like-for-like sales in its 340 food-based premium pubs, with sales also up by 3.1pc in the first seven weeks since the year-end.
It opened 22 of these new sites in the financial year, including its first pubs in Scotland, and now plans to accelerate expansion from up to 25 a year to up to 35.
The pub restaurants are the main driver of growth for the group, which said 80% of its customers now visited its sites primarily for food.
Comparable sales across its managed and franchised taverns estate rose 2.1%, although like-for-like profits remained flat in its leased arm.
The brewing business saw underlying earnings rise 3pc to £16.9m on revenues 12pc higher over the full-year and has been trading in line with expectations in recent weeks.
NewRiver Retail is the UK's fourth largest shopping centre owner, with assets under management of £440 million comprising 24 UK wide shopping centres, 16 high street retail units and two supermarkets.