The operator of 1,414 UK pubs said it has “continued to make positive progress” and cited revenue and underlying pub operating profit growth despite the macroeconomic environment.
Its total revenue for financial year 2023 (FY23) was £872.3m (FY22: £799.6m) while it made a total loss before tax of £20.7m (FY22: £163.4m) but reasoned this included a £21.6m net loss in respect of interest rate swap movements, a partial reversal of the £109.2m net gain reported in FY22 and £31.2m of charges in respect of the impairment of freehold and leasehold properties.
Underlying pub operating profit up
Other highlights included like-for-like sales up 10.1% v FY22, an 8% increase in underlying pub operating profit of £124.8m (FY22: £115.4m), underlying operating margin was effectively flat at 14.3% (FY22: 14.4%) and said “both drink and food sales were encouraging, demonstrating the trading resilience of the group’s predominantly community pub estate”.
The group said there had been positive cash generation and debt reduction during FY23 with operating cash inflow of £141.2m (FY22: £134m) and net cash inflow for the period of £34.4m (FY22: £26.2m) while there had been continued progress with its debt reduction strategy as net debt, excluding IFRS 16 lease liabilities, reduced by £31m to £1.19bn (FY22: £1.22bn) and £54.5m had been generated from non-core strategic disposals.
Marston’s said it “continued market outperformance with a well-positioned, predominantly freehold pub estate, with limited exposure to city centres, and community pubs continuing to benefit from consumer lifestyle changes” and “simplified pub estate evolution, delivering positive momentum with food and drink spend per head up 8.1% and 8.6% respectively and gross margin up 0.6%”.
It also enjoyed a successful trial of a franchise-style model in food-led managed pubs with sales growth “significantly exceeding” that of the broader food business.
It completed 41 capital schemes and £4m garden investments with £50m to £55m of capex investment earmarked for FY24.
Consumer remained resilient
Chair William Rucker said: “We have continued to make positive progress on our key goals and strategic initiatives. The consumer has remained resilient despite the macro backdrop and Marston’s continues to trade well, achieving market outperformance.
“We anticipate an improving outlook in which cost headwinds are largely abating and like-for-like sales are up over 7% since the year end. This, together with the actions we have taken this year to drive further efficiencies, leave us confident Marston’s remains well-placed to continue to outperform and to grow revenue, margin and profitability.
“We look forward to welcoming Justin Platt who joins the group as CEO in January. The business is in good shape and well-positioned to take advantage of the future opportunities open to us to create value for our shareholders under his stewardship.”