British pub operator and brewer Marston’s, which owns McEwan’s Export, saw an 8 per cent rise in pre-tax profits to £36.3 million in the first half of the year, despite “tricky” conditions.
The group, which acquired McEwan’s owner Charles Webb Beer Business (CWBB) for £55m last May, reported underlying revenue up 20 per cent to £528m in challenging conditions, such as severe winter weather and low consumer confidence.
Marston’s has an estate of almost 1,600 pubs across the UK and brews premium cask and packaged ales. It added McEwan’s, Bombardier and Courage to its portfolio with the CWBB acquisition, as well as licensed brands, such as Estrella Damm, and now has around 14,500 employees.
Commenting on today’s figures, Marston’s chief executive Ralph Findlay, said: “It has been a good first half in what has been quite a tricky market. There was the weather impact, but despite that we had good growth. We’re pretty happy overall.”
He said that the Charles Webb acquisition had contributed to growth and that the overall performance off the group’s beer business had been excellent.
He explained: “The acquisition has opened up new avenues for Marston’s. Geographically, it’s the first time we’ve had a material presence in the Scottish beer market with the McEwan’s brand.”
He added that CWBB doubled its presence in export markets and has been “fantastic for us”.
Mr Findlay said that the McEwan’s brand remains large in the UK and Scottish market and has “performed well”, but some changes are planned.
He said: “The main brand is McEwan’s Export. I think we what we will be looking to do with that brand over the next few months is to modernise it a bit without changing it hugely.
“The branding hasn’t changed for a long time. We’re looking at how we continue to grow this brand and make it more relevant to consumers today without alienating some of its core customers.”
Charles Webb had bought McEwan’s, orginally brewed in Edinburgh before production was moved to England, from Heineken in 2011.
On the pub side of Marston’s business, it reported that new UK openings are on track, but with a modest reduction to capital plans for 2019. Six pubs and bars opened in the first half, making it on target to open 15 for the financial year, and six lodges were launched, taking the estate to more 1,500 rooms. The plan is to open 10 pubs and bars and five lodges in 2019 - a net capital reduction of £25m.
In Scotland, Mr Findlay said about £75m of capital has been invested in pubs and lodges in the last four years, representing around 1,000 employees, and the business has performed well. There were new openings in Peterhead and Inverness this year. While Marston’s continues to look for new sites in Scotland, no further openings are planned this year.
Looking ahead, Mr Findlay said the biggest issue is the rate at which consumer confidence returns to the market.
He said: “In recent months consumer confidence has been an issue for the retail sector generally, and for us. The news this week suggested that pay is to grow at rates above RPI. If that is sustained that is potentially a real positive for the sector.”
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