2,150 Marston's pub jobs ‘will be impacted’ by additional Covid-19 restrictions

By Stuart Stone contact

- Last updated on GMT

Inevitable consequence: Marston's claims additional restrictions, including the enforced closure of almost 40 of its pubs, will put in the region of 2,150 jobs at risk
Inevitable consequence: Marston's claims additional restrictions, including the enforced closure of almost 40 of its pubs, will put in the region of 2,150 jobs at risk

Related tags: Marston, Jobs, Finance, Coronavirus

Pub operator Marston’s has revealed the Government's new Covid-19 measures, including the enforced closure of almost 40 of its pubs, will put more than 2,000 roles at risk.

In a trading update for the 53 weeks ended 3 October 2020, the Wolverhampton-based operator of close to 1,400 pubs revealed that despite 10,000 staff members returning to work, around 2,150 pub-based roles currently subject to furlough are at risk, following the introduction of new pandemic restrictions. 

According to its statement, Marston’s has reopened 99% of its pubs since the Government permitted hospitality businesses to resume trading from 4 July – though 21 have since closed due to restrictions in Scotland​ with a further 18 shuttered in Liverpool​ under the latest three-tier lockdown system.

The news comes after a number of fellow operators including Mitchells & Butlers​ and Greene King​ recently announced redundancy plans. 

Marston’s also revealed group sales had dropped by 30% to £821m and that primarily as a result of the Government’s enforced closure period to combat Covid-19 total pub sales for the same period had fallen by 34% year-on-year to £515m – though they were boosted slightly by the disposal of 168 pubs for £61m in the first half-year.  

Additionally, Marston’s Beer Company saw annual sales of £306m, 22% below last year’s total. Though off-trade volumes were up 23% as a consequence of demand during the period of pub closure, on-trade volumes excluding the closure period were down 11% year-on-year.

Post-lockdown performance 

Marston’s revealed it’s like-for-like sales were down just 10% year-on-year in the 13 weeks since 4 July, despite estimates that social distancing and other restrictions had reduced average indoor capacity by approximately 30%.

While July’s pub takings dropped 26% year-on-year, Marston’s recorded a 6% increase in like-for-like sales during August off the back of the Government’s Eat Out to Help Out scheme. September’s sales were, however, down 12% on 2019 figures.

“On reopening, we set ourselves three objectives: for pubs to be safe for our guests and our people, to retain pub ambience, and for our pubs to be financially viable,” Ralph Findlay, Marston’s chief executive officer, said. “I believe we have met those objectives. 

“Trading has been difficult, but to operate at 90% of last year on a like-for-like basis is better than our forecast, ahead of the market and a highly creditable result. In part, this is because most of our pubs are in suburban or community settings, and we have relatively few pubs in city centres which have been worst hit by changes in working habits. 

“However, the additional restrictions which have been applied across the UK most recently present significant challenges to us and will make business more difficult for a period of time.

“I very much regret the consequence of this is that the jobs of around 2,150 of our colleagues will be impacted, but it is an inevitable consequence of the limitations placed upon our business. We will be looking at our cost base further in the coming weeks.”

Marston's

Uncertainty ahead

Marston’s also revealed its net borrowings on 3 October were £70m below last year’s figure and currently stood at just over £1.3bn – with £50m shaved off the figure since the end of March. 

This improvement was attributed to pub disposals in the first half-year, as well as Government support in the form of the Coronavirus Job Retention Scheme and deferred VAT and Duty payments.

What’s more, Marston’s added it had £90m headroom against a £360m bank facility at year end and did not anticipate needing to utilise an additional £70m facility secured in May, which is due to expire in November.

Additionally, following anticipated completion of the Carlsberg Marston’s Brewing Company​ joint venture before the end of October, Marston’s expected the initial net proceeds of around £230m to be available for the further reduction of bank debt.

“We have managed our cash flow very carefully and it is a credit to our teams that net debt is £70m below where it was at end of the financial year 2019 and £50m below the interim 2020 level despite the 15 weeks of pubs closure,” Findlay added.

“Strategically, the transformational deal with Carlsberg has highlighted the inherent appeal and value of Marston’s Beer Company and will contribute to a further reduction in net debt when it completes at the end of October. 

“We look forward to seeing the Carlsberg Marston’s Beer Company grow, realising the significant benefits set out at the time the joint venture was announced.

“There is much uncertainty ahead, the majority of which is outside of our control, however we will continue to focus on the safety of our teams and guests. 

“Looking beyond the immediate challenges, we look forward to our future as a focused pub operator, returning to growth when trading conditions allow and realising the opportunities which are open to us over the medium to longer term.”

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