Premium pub and craft beer investments are expected to translate to profit ahead of Marston’s full-year results
Marston's is set to unveil an upswing in profits this week because of the company's investment into premium food and craft beers.
The pub chain, which has an estate of about 1,600 pubs in the UK, including premium chains Pitcher & Piano and Revere, is expected to reveal a jump in full-year profits to £98.3m from £31.3m last year, analysts said.
Marston's has invested about £70m a year into pub dining, ditching older outlets and opting to spend on new gastropub dining experiences instead.
Read more: Pour another one for Marston's as own beer brands post double-digit rise
While Marston's is not immune to the added costs of business rate hikes to existing cost pressures, analysts expect Marston's broad geographic base to help offset some of the costs.
Results are anticipated to be in line with October's year-end trading update, which reported its destination and premium arm's like-for-like sales up by 2.3 per cent, while its taverns like-for-like sales rose by 2.7 per cent and leased like-for-like profits increased by 2 per cent.
Read more: How to do things differently in the pub industry
Marston's beer brands have performed well, with own-brand volumes up 13 per cent and profits in line with management expectations.
In 2015, the company paid £25.1m for British pub brewer and operator Thwaites.
In its last trading update, Marston's said 22 new pubs and bars and six lodges had been completed in the financial year, while in 2017 it has plans to open a further 22 pubs and bars and at least five lodges. The company predicts similar levels of expansion to continue for the foreseeable future.