TIDMMARS
RNS Number : 7028P
Marston's PLC
11 October 2023
11 October 2023
MARSTON'S PLC
('Marston's' or 'the Group')
Trading update for the 52 weeks to 30 September 2023
Marston's PLC issues the following trading update for the 52
weeks to 30 September 2023.
Trading
All sales comparisons are compared to the same period in
FY2022.
Total retail sales in the Group's managed and franchised pubs
for the 52-week period were +11.3% on last year.
Like-for-like sales for the 52-week period were +10.1% vs
FY2022. Both drink sales and food sales have been strong,
demonstrating the resilience and appeal of our predominantly
suburban pub estate.
Like-for-like sales in the 10 weeks from 23 July 2023 to 30
September 2023 were +7.7% vs FY2022, reflecting the well-documented
wetter weather over the July and August summer months. Drink sales
in this period were behind food sales, principally due to the
weather. The last five weeks like-for-like sales were +12.0%,
providing strong momentum into the new financial year, with both
food and drink sales in strong growth.
Our strategy continues to be centred upon delivering affordable
pub experiences for our guests in a quality environment, both
inside and out. The level of customer demand remains encouraging,
and we have continued to make positive progress on guest
satisfaction measures over the year.
As we set out in the Interim Results in May and July trading
update, we successfully trialled our franchise-style model in 19 of
our food-led managed pubs to complement the 714 wet-led pubs
operated under this model. We are very pleased with the result of
the pilot to date, with sales growth significantly exceeding that
of our broader food business. We are on track for the target of 50
food-led franchised pubs in FY2024.
Looking forward, the combination of our strategy and the
principally suburban location of our pub portfolio positions us
well to withstand the challenging consumer environment, and the
actions to dispose of non-core pubs ensures we have a portfolio of
well-invested pubs which will to continue to deliver high-quality
earnings and sustainable future growth.
Cost Outlook
As previously guided, we have fixed our energy costs for FY2024
and have secured a significant proportion of our food and drink
costs for the year, providing us with a high degree of confidence
for the next financial year.
In addition, as a consequence of pursuing the operational
strategy of simplifying the business and driving efficiencies, and
following a review of the business structure over the summer, we
have reduced head office headcount costs by approximately GBP5
million, the majority of which will benefit FY2024 and subsequent
years. This cost reduction is expected to translate into higher pub
operating profitability than was previously anticipated.
Over the medium term we are focused on continuing to improve
efficiencies across the business to further enhance our operating
profit margins and are targeting an improvement of at least 200
basis points to these margins over the next 2-3 years, of which 50
basis points is achieved through the cost reduction described
above. Further detail will be set out in the Preliminary Results in
December.
Cashflow and Financing
Net borrowings (excluding IFRS16 commitments) as at 30 September
were GBP1,185 million, GBP31 million below last year and GBP19
million lower than H1. We are targeting debt reduction of GBP60-70
million in FY2024.
During the year we generated GBP55 million of non-core pub
disposal proceeds (net of VAT). We have concluded a further
strategic assessment of assets and in FY2024 we expect to dispose
of around GBP50 million of additional non-core properties.
Our borrowing is largely long-dated and asset-backed. 93% of our
borrowings are hedged and therefore not at risk of changes in
interest rate movements that may occur during the year.
Commenting, Andrew Andrea, Chief Executive Officer, said :
"Two years ago, we set out our vision and strategy with a clear
objective to create a simplified, high quality predominately
suburban pub business, with minimal exposure to city centres where
demand is more volatile. Operationally, we remain focussed on the
core pillars of driving guest satisfaction in a great environment
served by engaged and focussed teams, which remains relevant
despite the macro challenges facing the consumer.
"The benefits of this strategy are now coming through. We are
pleased that the strong trading momentum which characterised H1 of
this year has continued into H2, culminating in a 12% like for like
performance most recently. The simplification of the business,
together with the extension of the franchise model into our
food-led pubs, has enabled us to introduce additional efficiencies
into the business, which will improve margins in 2024 and beyond,
through improved sales performance and continued cost savings.
"We continue to make good progress across our key medium term
strategic goal of reducing the Group's borrowings to below GBP1bn,
including the accelerated disposal of non-core pubs.
"An improving outlook in which cost headwinds are abating,
together with the actions we have taken this year to drive further
efficiencies, leaves us confident that Marston's remains
well-placed to continue to outperform in the current macroeconomic
environment, grow revenue and profitability, as well as deliver
improved margin in the year ahead."
Forthcoming Events
Please find below the forthcoming reporting dates for Marston's,
which are also available on the investor calendar on our website -
www.marstonspubs.co.uk/investors
2023 Preliminary Results 5 December 2023
ENQUIRIES:
Marston's PLC Tel: 01902 329516 Instinctif Partners Tel: 020 7457 2010/2005
Andrew Andrea, Chief Executive Officer Justine Warren
Hayleigh Lupino, Chief Financial Officer Matthew Smallwood
Joe Quinlan
NOTES TO EDITORS
-- Marston's is a leading pub operator with a 40% holding in
Carlsberg Marston's Brewing Company
-- It operates an estate of 1,415 pubs situated nationally,
comprising managed, franchised and leased pubs
-- Marston's employs around 11,000 people
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