LONDON, Nov 30 (bdnews24.com/Reuters) - British brewer and pub firm Marston's Plc posted a 3.4 percent fall in year profit on Friday as one of the wettest summers on record took its toll and outweighed booming food sales.

Like most of its rivals Marston's said it was cautious about consumer confidence, regulatory cost pressures and the impact of the smoking ban over the winter but said its food sales were flourishing now smoking in pubs has been outlawed.

Pretax, pre-exceptional profit fell to 98 million pounds ($203.1 million) from 101.5 million a year ago, in line with analysts' expectations, while a 120 million pound share buy-back programme lifted earnings per share to 26.2 pence.

Chief Executive Ralph Findlay told reporters pub goers were tucking into menu staples like fish and chips and steak pies like never before.

Marston's total sales rose 9.6 percent helped by the recent acquisition of rivals Eldridge Pope and Ringwood Brewery, while food sales at its 550 high street and managed pubs grew 13 percent and make up more than a third of the division's takings.

Food sales growth eased to 9 percent in the last eight weeks, it added.

There are signs Britain's big pub firms are poised for a pub meal price war. Larger rival Mitchells & Butlers said on Thursday it would concentrate on value meals while JD Wetherspoon's has been doing the same for years.

GOOD VALUE

"We are introducing good value and more variety into menus and developing operating formats like Marston's 2-for-1," Findlay said.

"The reason for visiting pubs is becoming more and more about dining rather than just drinking," he added.

Along with the rest of the pub sector Marston's shares have fallen around 30 percent in the last five months. They rose 0.5 percent at 1057 GMT to 325 pence.

"There's a consumer slow-down on the way but you wouldn't know from today's excellent results from Marston's," said Evolution analyst Nigel Parson.

"Managed pubs was the star performer...with the rest driven by a lower tax charge and higher than anticipated share buy-back."

The Midlands-based firm recently refinanced its borrowing and now has the option to use the 500 million pounds plus at its disposal to either buy back shares or buy more of its rivals.

"We continue to look at things that would improve our estate quality and extend our trading geography," said Findlay.

It has also shunned the idea of splitting off its property portfolio into a real estate investment trust (REIT).

In its 1,720 pubs run by independent landlords, operating profit rose 3 percent,excluding the 82.5 million pounds it got from selling 280 pubs before the ban on smoking came into force.

Sales in the firm's brewing business fell to 84 million pounds from 86 million a year ago as Marston's reduced its dealings with wholesalers and its beer lost its place as the principal ale at one chain of pubs.

The company said it would pay a final dividend of 8.47 pence per share, bringing its total for the year to 12.83 pence, up 20 percent.

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