Insider Media Limited

The West Midlands' pub industry is entering a definite period of recovery, according to an industry expert. Greg Watts, audit partner at KPMG in the Midlands, told Insider that the industry is "turning a corner" and both managed and leased divisions are set to benefit from the warm weather. His comments come as Wolverhampton pubco Marston's revealed pre-tax profits had increased 5 per cent to £29.2m in its half-year results this morning.

Group revenue was up 2.8 per cent to £317.9m for the six months to 2 April 2011, and Marston's net debt fell to £1.1bn, which the company said was "slightly below last year.

The company said both Mother's Day and the Easter period had been profitable, with like-for-like sales up 5 per cent over both events.

Marston's Inns and Taverns like-for-like sales were up 2.4 per cent on the comparable 2010 period, with operating profit up 3.9 per cent.

The group's pub division also experienced a small growth spurt, with operating profit up 0.3 per cent over the six months.

Ralph Findlay, chief executive of Marston's, said the group's performance had been "encouraging, despite challenging market conditions and the severe weather in December." He added that profitable trade had continued over the Easter period.

Findlay said: "Our focused and disciplined strategy, offering consumers value for money in well-invested pubs, together with sector-leading shares in the growth segments of the beer market, places us in a strong position for the future."

Earlier this week, Solihull-based Enterprise Inns also posted positive results with a £61m pre-tax profit. Although this was lower than the £91m posted in the comparable 2010 period, KPMG's Watts said pubcos across the region were beginning to get back on their feet.

"The recovery we're experiencing at the moment may not be the hayday of pre-recession days, but the decline of the industry is certainly starting to slow," he said. "We are seeing like-for-like recovery in many of the larger pub groups. Leased pubs are performing well – perhaps not in terms of profit as yet – but the rate of decline has improved significantly."

Watts added that managed pub divisions were also improving performance.

"The managed pubs are seeing increases in profitability – they're becoming more aware of the importance of food offering, and increases in prices of both wet and dry products are being passed down. There's also less competition in the industry – high numbers of pubs are still closing every month, and those surviving will benefit from that."

Watts said: "There will be winners and losers in the industry – the winners will re-invest in design, concept and brands that their properties carry."