Marston’s – ‘we will be able to maintain operations’

Marston’s has “sufficient liquidity to maintain operations at a materially reduced level of business,” it has said in a COVID-19 update released today.

The group has experienced a small dip in year-on-year like-for-like sales of -1% for the 24 weeks to 14 March 2020, and beer volumes continue to be in line with expectations.

Although the impact of coronavirus so far has been “marginal,” with pub lfls broadly flat over the last fortnight, following recent Government advice the group anticipates significantly lower sales in the coming weeks.

Continuing with its debt reduction program of ceasing new-builds and reducing capital expenditure by approximately £80 million a year – with a target to reduce debt by £200 million by 2023 – the group has said that this, in tandem with other various actions, will allow for the continuation of operations at a reduced level of business.

These further actions include a reduction in overhead and other variable costs, the tight management of working capital and stock levels, a rent suspension for tenants on a case-by-case basis, and continuing its disposal plan (completed £60 million of disposals in year to date, target of £85-90 million.)

The pub co has also said it is in discussions with its banking group about the provision of covenant waivers for the second half-year should these be required.

“In addition to the above, we welcome the measures outlined by the UK Government yesterday to provide support for the hospitality sector,” the operator has said.

“Further measures are to be proposed which are intended to support employment. Whilst the full details of these proposals have still to be scrutinised, they represent good progress towards the very significant commitment which the hospitality sector requires from the Government, and an acknowledgement of the importance of pubs to jobs, the economy, and communities.”