Marston’s H1 lfl sales up 10.7%: Marston’s, the Andrew Andrea-led pub company, has reported a 10.7% increase in like-for-like sales in the 26 weeks ended 1 April 2023 compared to last year, and said trading since the half year end has been strong. The company said like-for-like sales in its managed and franchised pubs were up 7.9% since the half year end. It said: “For the Easter weekend and first May bank holiday like-for-like sales were strong compared to last year, demonstrating that when weather conditions are right people want to go out to the pub. Over the Coronation weekend overall there was a sales uplift, with better performance on the days with good weather. We remain mindful of the current macroeconomic environment, with the cost-of-living crisis and the resulting challenges this brings in respect of cost inflation and the potential impact on disposable income, as well as potential supply issues. However, our pubs have demonstrated their resilience time and time again and, to date, there is little in our trading performance to suggest that there has been a change to consumer behaviour; our guests still want to go out and have an affordable treat in a Marston’s pub.” Revenue for the 26 weeks ended 1 April 2023 was £407m (H1 2022: £369.7 million); 10.1% higher than the same period last year reflecting the continued rebuilding of trading momentum post omicron. Like-for-like sales for the period were up 10.7% vs last year, which the company said continued to show “strong like-for-like performance, encouraging recovery from covid-19 and the positive impact of our strategy”. Like-for-like sales were up 17.9% vs the same period in FY2020, which included a brief period of covid-19 impact in late March 2020. Retail sales in the group’s 1,191 managed and franchise pubs increased by 11.1% to £375.3m (H1 2022: £337.9m) and total outlet sales increased by 11.3% to £388.3m (H1 2022: £348.9m). Its tenanted and leased model, which comprises 246 pubs, generating revenues of £18.7m (H1 2022: £20.8m). Marston’s said it was still its intention to convert the remainder of the tenanted and leased estate to turnover based models in the medium term. Accommodation sales were £15m (H1 2022: £13.6m), benefitting from the demand for UK staycations. It said that drink sales had continued to perform well, once again demonstrating the “trading resilience of our predominantly community pub estate”. It said: “We were also pleased that the gap between drink and food sales performance is narrowing. We continue to have confidence that our pub strategy is delivering positive momentum, evidenced by the trading performance.” Underlying operating profit, excluding income from associates (CMBC) was £43.1m (H1 2022: £39.9 million) with a margin of 10.6% (H1 2022: 10.8%), which the company said was expected due to increased energy costs. Underlying operating profit, including income from associates, was £45.3m (H1 2022: £37.9m). The company said that due to the seasonal nature of its business, the majority of profit is typically earned in the second half of the year. Underlying profit before tax was a loss of £3.6m (H1 2022: loss of £7.5m), while it reported a pre-tax loss of £38.1m (H1 2022: profit of £25.6m). It said it had successfully secured an amendment and extension (A&E) to its banking facility and private placement to the end of January 2025. It said: “The revised £340m facilities are comprised of a £300m Revolving Credit Facility (RCF) with the continued support of all of our existing banks and with two new banks keen to join the syndicate, together with a restatement of our current £40m private placement. The RCF replaces the group’s existing £280m facility. As previously reported, £120m of the facility is hedged.” Net debt, excluding IFRS 16 lease liabilities, was £1,204.1m, a reduction of £12.1m from last financial year (2022: £1,216.2m). It said the reduction in debt would have been greater without a H1 phasing of capital expenditure. The business said that following a strategic asset review, in FY2023 it expects to dispose of £50-60m of non-core and unlicensed properties. In this period, £24.3m proceeds have been generated from these disposals, which achieved a price 39% higher than the net book value. Andrea, chief executive, said: “The strategy which we outlined 18 months ago is progressing well and generating positive results which is pleasing. Our H1 performance clearly demonstrates that consumers remain as keen as ever to celebrate – and socialise within – the Great British Pub. The macro environment is becoming increasingly stable and recent evidence suggests that both the cost outlook, and consumer confidence, are steadily improving. The actions we are taking are building a demonstrably better business and Marston’s predominantly community pub estate continues to benefit from changing consumer lifestyles. We continue to deliver upon our clear strategic objective to reduce debt and progress our path to profitability, albeit the seasonality of our trading profile means that the majority of the group’s profit is characteristically H2 weighted. We have invested ahead in H1, to capitalise on the benefits of this in H2, and remain on track to meet our operating profit, cash generation and debt reduction targets for the year. We look forward to delivering further positive progress as the year unfolds and remain confident that we have the strategy and the team in place to do so, maximising the opportunities open to us in the future and delivering shareholder value.”