Reporting on the 26 weeks ended 1 April 2023, the group has increased like-for-like (lfl) sales to £407.0m, which was up 10.7% versus H1 FY22 (£369.7m) and is up 17.9% on H1 FY20 – with the pandemic only affecting the final week or so of this period.
The group said current trading is positive with lfl sales in the past six weeks up 7.9% versus the same period in 2022 with Easter and the first May bank holiday proving strong.
It added it is managing inflationary challenges with electricity costs fixed until end of H1 FY24 and gas until end of March 2025 while it is offsetting other costs through efficiencies and pricing strategies.
On H1 FY23, Marston’s said drink sales continue to perform well and food sales were encouraging, demonstrating the trading resilience of the group’s predominantly community pub estate while pub operating profit rose to £43.1m (H1 FY22: £39.9m).
The business made a loss before tax of £38.1m versus a £25.6m profit in H1 FY22 but this fall was in respect of interest rate swap movements; a partial reversal of the £109.2m net gain reported in FY2022.
It also reported an improved share of Carlsberg Marston’s Brewing Company’s profits of £2.2m (H1 FY22: loss of £2.0m).
Operating cash inflow of £69.9m was more than doubled of H1 FY22 (£30.2m) and net cash inflow for the period was £11.5m (H1 FY22: £8.9m) and Marston’s continued its progress with debt reduction strategy as net debt (excluding IFRS 16 lease liabilities) reduced by £12.1m to £1,204.1m (FY22: £1,216.2m).
The group generated £24.3m from non-core strategic disposals, which are 39% ahead of net book value and disposals totalling £50m to £60m are anticipated in FY23.
The group said it has a well-positioned, predominantly freehold pub estate, with limited exposure to city centres and community pubs continuing to benefit from consumer lifestyle changes and added it has a simplified estate categorisation with a core focus on mainstream market.
It completed 42 capital schemes in H1 FY23 with a further 14 planned for H2 FY23 with a £4m garden investment scheme and expects the majority of its estate repositioning to be completed by FY26.
The company has also continued momentum on its ‘Pubs to be proud of’ strategy and cited it has driving strong results.
Marston’s chief executive Andrew Andrea said: “The strategy that we outlined 18 months ago is progressing well and generating positive results which is pleasing.
“Our H1 performance clearly demonstrates 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 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.”