Pub firm seeks £176m for growth

See Marston's share price

Pub and brewing company Marston's is to raise £176m in a rights issue, with most funds earmarked to build new pubs.

About £140m will be used to buy land and develop pubs in densely populated areas, with a focus on food.

The firm said the slide in property prices and the economic environment presented a "rare opportunity to secure excellent sites on attractive terms".

The company has about 2,250 bars in England and Wales, and runs the Tavern Table and Pitcher & Piano chains.

Its brewing arm, Marston's Beer Company, produces Pedigree, Jenning's and Banks.

Higher returns

Marston's slowed its expansion in 2008 because of the economic challenges facing the pub industry, but it is now planning to pick-up growth.

"The roll out of new build pubs can generate higher returns at lower risk than acquiring mixed packages of existing pubs," said chief executive Ralph Findlay.

Marston's has opened about 30 new build pubs in the past five years, which it says are designed to appeal to women, families and "forty/fifty somethings".

It expects to open between 20 and 25 pubs a year in the short term under its latest plans.

To raise the money, Marston's said it was selling new shares at 59 pence each, a 58% discount to Wednesday's closing price.

By close of trade on Thursday, shares in Marston's were 22.2p, or 15.8% down, at 118p.