UK pub operator Marston’s reports that since Covid restrictions began to be lifted on 12 April, the group has seen a continuous improvement in trading.
For the most recent quarter from 25 July to 2 October, Marston’s saw a return to growth over 2019, with sales 2% higher across both its managed and franchised pubs.
The company’s share price had risen 1.28% by mid-morning to reach 73.78p on the back of the positive update.
Overall, trading since the April lifting of strict lockdown rules has been at 94% of 2019 levels. This includes the benefit of the temporary VAT reduction on food and non-alcoholic drink sales.
As with all UK pub chains, trading during the year was significantly disrupted by the impact of the pandemic. Marston’s pubs were open for only 54% of the total trading days.
When they were open, they operated under significant trading restrictions, ranging from outdoor-only and table service only, to the different tier systems applied across the UK.
Total pub sales were £402m ($54.8m, for the year, representing 78% of sales the previous year and reflecting the significant disruption to trading caused by the pandemic.
During the lockdown period, Marston’s entered into an agreement to operate a portfolio of 156 pubs from SA Brain via a combined leased and managed contractual arrangements. These pubs reopened alongside the existing Marston’s pub estate in Wales, and have performed well and ahead of expectations.
The group remained focused on cash management during the year, particularly during periods of closure.
Net borrowings (excluding IFRS16 commitments) as at 2 October were £1,232m – £97m below last year – following the completion of the joint venture with Carlsberg in October 2020, which delivered net proceeds of £228m.
Further support from the government in the form of the Job Retention Scheme and business rates also helped to achieve this number.
At year-end, Marston’s had £90m of headroom against its £280m bank facility.