Marston’s plc (LON:MARS) has agreed to sell 137 pubs to rival Admiral Taverns for £45mln, as part of the FTSE 250-listed publican’s strategy to reduce debt by disposing of non-core assets.
The venues, sold at a loss to the book value of £63mln, generated underlying earnings of £5mln and operating profit of £4mln in the year to 28 September, the company said in a statement.
READ: Marston’s to sell an extra £30mln in assets to boost debt reduction
The disposal will increase the average profit per pub in the retained estate by 7% and return on capital by 0.2%, with completion expected before the end of November.
Chester-based "community pub" specialist Admiral is owned by US private equity group Proprium Capital Partners and Magers owner C&C Group.
“We remain focused on our stated objective of reducing our net debt by £200mln by 2023 or earlier, and thereafter operating a high-quality business generating consistent net cashflow, after dividends, of at least £50mln per annum,” said Marston’s chief executive Ralph Findlay in the release.
In the summer, the pubco said it had decided to accelerate its debt-reduction plans, deferring £70mln of the new-build investment planned for the next three years and spending more on pub refurbs.
Marston's shares were up 1% to 124.37p on Monday morning.