Marston’s has reported improved trading post lockdown, with like-for-like sales since restrictions lifted in in July 102% of 2019.
In its full year results, covering the 52 weeks ended 2 October 2021, the pub company reported “significant disruptions” from the pandemic
Total revenue for the 52 weeks ending 2 October 2021 was £424m, 48% below last year.
The pub company reported a total underlying loss of £100m, from £20m in 2020.
As well the pandemic, the financial performance reflects the sale of Marston’s Beer Company to Carlsberg Marston’s Brewing Company.
Statutory profit before tax reflects the profit on disposal of the beer business of £291m and a non-cash impairment charge of £84m for property.
The business said it had a strong balance sheet position, with £190m of a £280m bank facility drawn down, providing headroom of £90m.
Net debt is down £1.23bn, a reduction of £97m since 2020, and on track to reduce to below £1bn by 2025.
Marston’s said its strong cash management throughout pandemic meant it had no need to turn to the equity markets
On its Carlsberg partnership, which completed 30 October 2020, Marston’s reported higher levels of synergies expected of c.£35-40m.
Of the £256m of net proceeds from the deal, £28.2m contingent is due December 2021.
In the SA Brain pub operations, Marston’s reported a proforma EBITDA of £7m, with additional opportunity of £2-3m synergy benefits
The company said current trading was 1.3% up on 2019, despite the reduction in VAT relief.
Christmas bookings were encouraging and in line with 2019; while hedging and long-term contracts are in place to manage 2022 inflation headwinds
Marston’s said it was less exposed to labour challenges, due to its predominantly suburban pub estate.
Andrew Andrea, CEO said: “It is extremely encouraging that trading momentum has built well since reopening and trading is now exceeding FY2019 levels. We were delighted to fully reopen our estate in July, once restrictions were lifted, and welcome our guests and team members back into our pubs. Whilst there are still some challenges to navigate over the months ahead, we believe the worst of the pandemic is now behind us and Marston’s has emerged a stronger, more focused business which is in great shape. Importantly, consumer demand for the pub and the role which this great British institution plays, at the heart of communities up and down the country, has never been stronger.
Andrea urged the government to continue to support the sector by maintaining VAT at 12.5%.
He added: “Marston’s enters the year ahead as a focused pub business with a clear strategic plan, a profitable and cash generative business, a strong balance sheet and a 40% share in CMBC, our partnership with Carlsberg, which has such exciting potential. Our debt reduction plans remain on track and our well-invested, predominantly freehold, suburban pub estate is well placed to benefit from many of the positive consumer dynamics and drivers post pandemic. Whilst still early days, Christmas bookings look encouraging and we look to the future with renewed optimism.”
