Marston’s posted a like-for-like sales trading decline of 1% in the full year 2022 – though this improved to 3% up in the last ten weeks of the financial year.
The comparison was to 2019, and the pub company cited the impact of Omicron trading restrictions in December and January and hit on consumer sentiment in H1 for the decline in sales.
Covering the 52 weeks to 1 October 2022, total sales in the group’s managed and franchise pubs were up 2% vs FY2019.
Drink sales have continued to outperform food sales, reinforcing the “steadfast trading resilience” of Marston’s predominantly community pub estate.
In the 10 weeks from 24 July to 1 October, like-for-like sales were 3% up vs FY2019 and 4% up on last year.
Growth continues to be predominantly driven by drink sales. Food sales in this period were weaker principally due to the hot weather.
Marston’s said the level of customer demand remains encouraging, despite continued uncertainty around the cost of living.
The group’s gas price is fixed until the end of March 2025, with no additional incremental spend anticipated, but electricity costs in the last 10 weeks of FY2022 have been higher than originally expected. due the volatile market for energy over the last few months.
Electricity is hedged for H1 of FY2023, covering the six-month period from October 2022 to March 2023.
Marston’s said it awaits the review of the price cap but remains comfortable with the guidance it has provided on energy costs.
Net borrowings (excluding IFRS16 commitments) as at 1 October were £1.21bn, £16m below last year and £30m lower than H1.
During the year the £50m deferred duty/VAT paid was offset by a contingent consideration of £28m from CMBC and a payment by CMBC of £19.4m, reflecting a one-off working capital movement recognised in CMBC’s H1 (January 2022 - June 2022) results.
Marston’s said its borrowing was largely long-dated and asset-backed, with 86% of its borrowings are hedged and therefore not at risk of any changes in interest rate movements that may occur during the year.
At the year end, the group had £65m of headroom against its £280m bank facility and £10m of cash.
Andrew Andrea, chief executive, said: “This is a good performance, with the trading momentum we experienced in the Summer continuing. Marston’s has a long-term capital structure which is well suited to the current market environment and we remain committed to our debt reduction strategy with which we continue to make progress. We are managing cost inflation well with food, drink and energy costs covered for the immediate future.
“Whilst we are not complacent and can’t predict what the future will hold, what is clear is that people want - and are continuing - to visit our predominantly community pubs. The level of customer demand we are experiencing is encouraging which underpins our confidence that our strategy is working and we are making positive progress in that regard. Looking forward, we are primed to maximise the trading opportunities provided by the forthcoming World Cup and first restriction-free Christmas in three years. Marston’s is in good shape and well positioned to navigate the future.”
