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Tue 11th Oct 2022 - Marston’s reports lfls up 3% on pre-pandemic levels in last ten weeks with customer demand ‘encouraging’ |
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Marston’s reports like-for-likes up 3% on pre-pandemic levels in last ten weeks with customer demand ‘encouraging’: Marston’s has reported like-for-like sales in the ten weeks from 24 July to 1 October were up 3% on FY2019 and 4% on last year with customer demand “encouraging”. The company said that growth is still being predominantly driven by drink sales. Food sales in this period were weaker “principally due to the hot weather”. Updating on trading for the 52 weeks to 1 October 2022, the company stated: “Total like-for-like sales for the 52-week period were down 1% versus FY2019. As previously reported, this reflects the impact of trading restrictions in December and January as a result of Omicron and the corresponding impact on consumer sentiment in the first half. Total retail sales in the group’s managed and franchise pubs were up 2% versus FY2019. Drink sales have continued to outperform food sales, once again reinforcing the steadfast trading resilience of our predominantly community pub estate. The level of customer demand remains encouraging, notwithstanding the continued uncertainty around the cost of living. We continue to have confidence that our pub strategy is beginning to deliver positive momentum, evidenced by this good trading performance. Our strategy is centred upon delivering affordable pub experiences for our guests in a quality environment both inside and out. Looking forward, the combination of our strategy and the predominantly community-based location of our pubs means we are well-placed to meet the challenging consumer environment. As previously highlighted, the group’s gas price is fixed until the end of March 2025 with no additional incremental spend anticipated. Electricity costs in the last ten weeks of FY2022 have been higher than originally expected due the volatile market for energy over the last few months. The group’s electricity is hedged for the first half of FY2023, covering the six-month period from October 2022 to March 2023. The recent announcement by the government concerning the energy price cap was helpful and further protects our first half energy spend. Regarding the second half, we await the review of the price cap, albeit we currently remain comfortable with the guidance we have provided on energy costs for the group’s financial year as a whole. As referenced previously, as part of our environmental, social and governance strategy management continues to focus on making efforts to mitigate energy costs wherever possible, such as adopting further energy efficient or saving schemes. Inflationary pressures on the group’s food and drink costs remain in line with previous guidance. Net borrowings (excluding IFRS16 commitments) as at 1 October were £1,216m, £16m below last year and £30m lower than the first half. During the year the £50m deferred duty/VAT paid was offset by a contingent consideration of £28m from Carlsberg Marston’s Brewing Company (CMBC) and a payment by CMBC of £19.4m, reflecting a one-off working capital movement recognised in CMBC’s first half (January 2022 – June 2022) results. Our borrowing is largely long-dated and asset-backed – 86% of our 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.” Chief executive Andrew Andrea 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. While 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.”
Next edition of Propel Turnover & Profits Blue Book reveals more sector companies making a profit than a loss for first time since pandemic: The next edition of Propel’s Turnover & Profits Blue Book, produced in association with Mapal Group, shows more sector companies are making a profit than a loss for the first time since the pandemic. The Blue Book shows total losses of £5.4bn being reported by 314 companies. However, a further 324 sector companies are reporting total profits of £1.7bn. The next edition will be sent to Premium subscribers on Friday (14 October), at midday. It will feature an additional 18 companies, taking the total to 638. They are turning over a collective £32.3bn. The Blue Book, which is updated every month, provides an insight into UK operator turnover and profitability over five years, profit conversion and directors’ earnings. Premium subscribers also receive access to three other databases: the Propel Multi-Site Database, produced in association with Virgate, the New Openings Database, and the UK Food and Beverage Franchisor Database. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £895 plus VAT – whether they are an operator or a supplier. The single subscription rate is £445 plus VAT for operators and £545 plus VAT for suppliers. Email jo.charity@propelinfo.com to upgrade your subscription. Subscribers also receive access to Propel’s library of lockdown videos and Friday Wrap interviews and now also have access to a curated video library of the sector’s finest leaders and entrepreneurs, offering their insights on running outstanding businesses in the sector. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out; regular video content and regular exclusive columns from Propel group editor Mark Wingett.
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