Marstons today confirmed what we all suspected, that further provisions, in it's case of £215 million, will have to be made for the declining value of the traditional wet-led pubs in pubco estates.

It signals to all the other pubcos that they have ruined the value of their businesses by forcing their tenants to sell overpriced beer thanks to their draconian leases.

Marstons has been a beacon of excellence in this respect yet it has seen external valuers mark down the value of it's 1650 tenanted and franchised pubs reduced by £186 million based on the lower values being achieved in open market transactions recently. Despite this profits in this division are 3% up thanks to the better performance of the 500 pubs now operating under the franchise model, whilst the traditional leased pubs maintained their performance.

The bright spot is that the new pub-restaurants which Marstons has been investing heavily in have contributed to an increase in value of £163 million in the 500 strong managed estate. These premises are worth 50% more than their build costs, which will be credited to the revaluation reserve.

In it's FY trading update today Marstons said that for the year ended 29th September LFL sales were up 2.2% in it's 500 managed pubs and that there was a slight improvement in margin as well.

Ralph Findlay, Chief Executive Officer, said:

 "We have been encouraged by the performance of all areas of our business this year despite the challenging consumer environment and the poor weather.  Our continued focus on offering value for money to our customers together with high service and quality standards is appropriate for current market conditions, and is generating profitable growth with improved returns. The recent valuation exercise demonstrates the inherent quality of our pub estate and in particular highlights the significant value created by our new-build pub-restaurants."

Shares in Marstons closed last night close to their high for the year at 116.4p valuing the firm at £657 million, but opened lower this morning on this news.