Marston's announces £176m rights

18th Jun 2009 07:04

Pub group and real ale brewer Marston's announced a fully underwritten 11 for 10 rights issue to raise gross proceeds of approximately £176m. The group also said like-for-like sales in Marston's Inns and Taverns are up 1.1 % in the 16 weeks to 6 June 2009 and pre-tax profit before exceptionals for the year to October is expected to be not less than £69m.Marston's will issue 298.8m new shares at 59p each, a 39.6% discount to the theoretical ex-rights price based on yesterday's closing price. The rights issue has been fully underwritten by RBS Hoare Govett and J.P. Morgan Securities. It intends to use approximately £140m of the net proceeds to acquire and develop new pubs in the short to medium term. "The Directors believe that there is potential to achieve returns on invested capital in excess of the target level of 15% EBITDA from the new build programme that will be implemented following the proposed Rights Issue together with a lower risk profile than is often associated with buying packages of existing pubs," it said. It will deliver around 20 to 25 new pub openings a year in the short term.The remainder of the proceeds will provide the company with the financial flexibility to undertake opportunistic repurchases of some of its securitised debt and to consider pursuing potential acquisition opportunities.The group said today that trends in Marston's Pub Company and Marston's Beer Company are in line with the half year.Marston's intends to pay a 2009 final dividend of 3.7p per share (2008 adjusted final dividend: 5.9 pence per Ordinary Share) and expects to rebase the interim dividend in 2010.