Marston's profits drop as debt reduction pursued

By Emily Hawkins

- Last updated on GMT

Debt reduction: Marston's wants to reduce its net debt by £200m in the next three years (image: Elliott Brown, Flickr)
Debt reduction: Marston's wants to reduce its net debt by £200m in the next three years (image: Elliott Brown, Flickr)

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Pub operator and brewer Marston’s has experienced a £3m dip in profits after making substantial disposals across its estate.

The chain’s debt reduction programme includes an aim to sell £70m in assets in the next year, including the sale of 137 sites to Admiral Taverns this month for £45m.

Sales growth in food-led sites was subdued in the year period to 28 September, which the chain said was consistent with the wider market and would be redressed with a refreshed focus in the coming year. 

There was an underlying pre-tax profit of £101m for the year, compared to the £104m figure for the previous period in 2018.

Like-for-like sales saw an incremental growth of 0.8% across both wet and dry-led pub segments at the Wolverhampton-based company.

Revenues grew by 2.9% to £1.17bn up from £1.14bn in the previous year, with the chain stating it was well prepared for the Christmas period.

There was continued growth in its brewing operation despite challenging comparatives, with volumes up by 1%. 

Chief executive Ralph Findlay said the chain would focus on its debt reduction programme, which aims to reduce debt by £200m by 2023 at the latest.

Outperforming the market

He said: “We continue to benefit from Marston’s balanced business model and our Taverns wet-led community pubs and brewing businesses have both once again outperformed the market, building on an outstanding year last year. 

“We are employing a renewed focus on the proposition in our food-led pubs and remain well placed to benefit from reduced supply in this market segment, of which there is beginning to be some evidence.

“Our principal focus remains to reduce our net debt by £200 million by 2023 - or earlier - and the measures we are taking now will result in a high quality business which is cash generative after dividends and capital expenditure. 

“Trading is on track for the initial weeks of the current year and we are well prepared for the all-important Christmas and New Year period.”

Sacha Lord, night time economy adviser for Greater Manchester and adviser to Andy Burnham, said the results showed customers want venues which offer something more personal. 

He said: “They want to drink in places where they know the management care and listen, who know the community personally, are inclusive and accessible with good substantial food and drink offerings."

"For pubs and bars to compete, they need to think wider than the soulless 2-4-1 drinks offerings of the 90s, and provide somewhere that not only provides a social spot for local residents to gather, but also has a point of difference and reputation to pull in business from elsewhere."

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