Marston's shifts gears

That transformation strategy started more than a year ago and is expected to last one more year: chief financial officer Andrew Andrea says pre-tax profits will recover by the end of the current financial year. Last year, reported losses were the result of restructuring costs, including substantial losses on the disposal of under-performing pubs. Last year it got rid of 388 pubs, pocketing £144m, and a further 200 sites will be sold this year. Management hope to fetch a further £70m from future property sales.

This hasn't come completely at the expense of new openings - specifically new-builds. Last year Marston's opened 27 new-build pub-restaurants, marking its 100th new-build site with a launch in Dumfries, Scotland. But overall Marston's estate is shrinking, comprising 1,689 sites in early October, compared with 2,050 the year before.

What's left performed well over the course of the year. It seems chief executive Ralph Findlay's "F-plan" (females, families, forty-somethings and food) is paying off. Like-for-like sales in the Destination and Premium category rose 3 per cent, and the Taverns division also did well, reporting like-for-like sales growth of 2 per cent across its managed and franchised pubs.

This momentum has continued into the new financial year. Like-for-like sales from the Destination and Premium and Tavern estates are up 2 per cent, and the brewing business is in robust health after the Hobgoblin brand reported record Halloween sales.

Analysts at Numis expect pre-tax profits of £91.8m for the current financial year, giving EPS of 12.8p - up from £83m and 11.6p respectively.