Following the release of the Wolverhampton-based operator’s trading update for the 13 weeks ended 2 January, Findlay explained that the pub sector remained in a “very difficult position” having spent most of the last nine months closed.
Marston’s Q1 statement also forecast that, in light of comments made by the Prime Minister about the potential for lifting restrictions and vaccine rollout, pubs will remain closed until March at the earliest.
“Regrettably there have been casualties across the sector and it is vital the Government urgently reviews the opportunity to continue to support pubs as we reopen the economy in the coming weeks,” Findlay said.
“Pubs are viable businesses which are part of the social fabric of Britain and which make a major contribution to the economy and the communities in which they serve. It is vital that they not only survive the short-term crisis but are supported in order to recover and flourish.
“Extending the business rates holiday and VAT cut for the rest of this year is a minimum requirement.”
Strengthened balance sheet
Findlay’s comments came after the operator of close to 1,400 pubs – all of which are currently closed – revealed that total pub revenue during its first quarter were £54m off the back of Covid-19 related disruption.
The pub company also detailed its “significant liquidity” following the completion of its joint venture with Carlsberg UK in October, stating that bank drawings net of cash at 2 January totalled £104m from a £280m facility which extends to 2024 – providing headroom of £176m.
What’s more, Marston’s update also stated 97% of its employees are currently furloughed and that its cash burn in full lockdown is an estimated £3m to £4m per week.
“Despite these challenges, Marston’s has a significantly strengthened balance sheet following the creation of the joint venture with Carlsberg and the financial headroom to weather the extended period of current trading restrictions,” Findlay explained.
As previously reported, Marston’s £780m joint venture with Carlsberg to create the Carlsberg Marston’s Brewing Company – announced in March and concluded in October – saw the maker of Hobgoblin, Wainwright and Pedigree hand over the keys to its breweries and become a “focused pub operator” for the first time in its history.
Findlay continued: “With the roll out of the vaccine programme now underway nationwide, we remain well positioned to rebuild trading momentum once restrictions are lifted, as well as to leverage potential market opportunities open to us.
“We have a clear strategy in place which leaves us confident for the future of our business over the medium term.”
As reported by The Morning Advertiser (MA) in December, Marston’s revealed that it made a total loss of £397.1m during the year to 3 October 2020 following the closure of its near 1,400 strong pub estate for 15 weeks.
The operator also recently announced that it will operate SA Brain’s portfolio of 156 pubs in Wales on a combination of leased and management contract arrangements, safeguarding 1,300 jobs.