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Wed 27th Jul 2016 - Update: Marston’s, Mitchells & Butlers and Easyhotel
Marston’s – Brexit has had no discernible effect on trading: Marston’s has issued a trading update that reports ‘progress in line with our expectations’ and that Brexit has had no discernible effect on trading. It stated: “In Destination and Premium, like-for-like sales for the 42 week period were 2.5% ahead of last year, including like-for-like food sales growth of 2.1% and like-for-like wet sales growth of 2.6%. In the most recent 16 weeks of the period, like-for-like sales were up 1.8% despite the anticipated adverse impact of the Euro 2016 football tournament on these predominantly food-led pubs. We remain on track to meet our growth targets for 22 pub restaurants and bars in the current financial year in addition to six lodges. In Taverns, like-for-like sales for the 42 week period were 2.8% ahead of last year, with growth of 2.5% in the last 16 weeks of the period. Euro 2016 has contributed to this continuing strong performance and helped to offset mixed weather. In Leased, profits for the 42 week period are estimated to be 2% ahead of last year. As previously stated, the Pubs Code introduced by the Government in July 2016 is not expected to have a material impact on the leased estate. In Brewing, own-brewed beer volumes were up around 14% compared to last year. Net debt and cash flow are in line with expectations.” Ralph Findlay, chief executive, said: “We continue to be encouraged by our performance. As expected, Euro 2016 was broadly neutral for the Group as a whole and we have continued to maintain our market outperformance by focusing on offering our customers great experiences and value in modern pubs and bars. In Brewing, we are growing in an attractive market, demonstrating the effectiveness of our new product development and the appeal of our brand portfolio, underpinned by industry-leading service. Although much has been written about the potential effect of Brexit on consumer confidence, we have not seen any discernible impact on trading to date. We believe that our focus on value and affordable treats is appropriate for current market conditions, and while we remain ever mindful of the risks to long term business confidence, it continues to be our intention to develop and implement our proven growth strategy.”

M&B reports improving trends in Third Quarter: Mitchells & Butlers, in a Third Quarter trading update, has reported that ‘sales since the half year have been more encouraging’. The company saw food sales down 1.5% in its Third Quarter (compared to minus 2% in its First Half )and drink sales were up 0.2% in like-for-like terms compared to down 1.5% in its First Half. The company stated: “Poor weather in June and Euro 2016 have had an expected adverse impact but we are pleased to see an improving trend, supported by our accelerated investment strategy. Recently invested sites continue to grow sales in excess of 10% in the year post-investment. Total sales in the first 43 weeks of the financial year fell by 1.3%. As previously highlighted, margins in the second half are expected to be lower than last year, due particularly to the introduction of the National Living Wage in April. So far this financial year we have converted or remodelled 232 sites, and opened 5 new sites. We expect to have increased our investment programme to complete around 250 conversions and remodels in the full year.” Chief executive Phil Urban said: “Underlying trading has improved in recent months, particularly when taking into account the negative impact of Euro 2016 and the wet weather seen in June. This reflects the good progress we are making across our three priority areas: to rebalance the business, to instil a commercial culture and to increase the pace of execution and innovation. Clearly there is some economic uncertainty ahead following the result of the EU referendum last month, with potential implications for consumer demand. We are monitoring developments closely, but remain confident that our previously outlined strategy, based on a strong freehold estate and brand portfolio, remains appropriate to deliver long-term sustainable shareholder value.”

Easyhotel signs two more franchisees: Easyhotel, the owner, developer, operator and franchisor of “super budget” branded hotels, has announced a further 401 rooms under development by Easyhotel franchisees. The company has signed a Master Development Agreement with Kolay, a wholly owned subsidiary of TOYA, to develop Easyhotel in Istanbul, Turkey. TOYA is a privately owned company established 45 years ago, in construction and tourism. It has more than four million square metres of land in its portfolio to develop multiple residential, mixed-use and commercial projects throughout Istanbul and Turkey. TOYA’s subsidiary, Kolay, will develop Easyhotel in Istanbul and is expected to open 50 rooms by the end of 2017, with a further 150 rooms to open by the end 2018 on land that it already owns. A total of 300 rooms are expected to open by the end of 2019. In addition, a new franchise hotel is under development in Lisbon, Portugal, which will add a further 101 rooms to the network by the end of December 2017. The hotel is being developed by Sedprop Investments, and is located in the heart of the city. The building was recently used as office space, and will be converted into a 101 room hotel which is expected to open by the end of December 2017. These agreements bring the total number of rooms under development by Easyhotel franchisees to 1,138. Chief executive Guy Parsons said: “We are delighted to be working with new partners who have local expertise, know-how and property assets in these new markets for Easyhotel. We continue to see significant opportunity to expand our franchise hotels network in these and other target markets, enabling us to leverage our brand awareness without direct capital investment.”

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