Shares digital

Pub operator Marston's has warned that it remains cautious on 2008 as a result of the smoking ban, weaker consumer confidence and pressures on costs and margins.

In an AGM statement, the company said although costs across the group have been well controlled, 'Changes in sales mix will continue to have an impact on operating margins.'

Despite analyst reassurances that rising costs and falling consumer confidence are accommodated in their forecasts, shares came off 13p, or 4.5% in early trade to 275 pence.

Greg Feehely, analyst from independent broker Altium, says: 'We had already forecast a 10% decline in 2008 earnings per share over 2007 which we hope accommodates [these] pressures.'

Latest sales for the 16 weeks to 19 January were 7.9% ahead of last year, boosted by the acquisitions of Sovereign Inns, Eldridge Pope and Ringwood Brewery in 2007. The like-for-like picture was less encouraging.

Marston's said like-for-like sales in its managed pub division Inns & Taverns rose by 1% for the period – that compares to like-for-like sales growth of 7% for the same period last year. In the last 8 weeks to 19 January like-for-like sales for Inns & Taverns were 0.1% ahead of last year.

In Marston's Pub Company, its tenanted and leased pub division,like-for-like profit was 0.6% below last year with growth in rental income offset by weak volumes and machine income in line with market trends.

Marston's said its Beer Company overall volumes are below last year. It added that it continued to increase market share in a weak beer market with regional premium ales from the Jennings and Ringwood breweries showing good growth.