Marston’s has exchanged contracts to sell 137 pubs to Admiral Taverns for £44.9m.
The pubs have a book value of £62.6m. The disposal will result in average profit per pub in the retained estate increasing by around 7% and return on capital improving by 0.2% post the transaction. The pubs in the package contributed EBITDA of £4.8m and operating profit of £3.7m for the year to 28 September.
The portfolio includes a mix of pubs from across Marston’s tenanted and franchised divisions, comprising mainly smaller, wet-led pubs.
The deal is expected to complete before the end of the month.
Ralph Findlay, chief executive of Marston’s, said: “We are making good progress with our plans to reduce our net debt by £200m by 2023 in part through the disposal of non-core assets.
“We are encouraged by the level of market interest that this portfolio of pubs has attracted. This further underpins our confidence in achieving the accelerated £70m disposal proceeds target that we have set ourselves for the current year.
“We remain focused on our stated objective of reducing our net debt by £200m by 2023 or earlier, and thereafter operating a high quality business generating consistent net cashflow, after dividends, of at least £50m per annum.”
Noel Moffitt, senior director of corporate pubs and restaurants at Christie & Co, which advised Marston’s, said: “The current lack of opportunity to acquire material portfolios as a group, combined with strong buyer appetite across a range of buyer pools, from family-run pub companies to private equity and international investors resulted in strong interest in the Marston’s portfolio.”
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