TIDMMARS
RNS Number : 6288V
Marston's PLC
05 December 2023
5 December 2023
MARSTON'S PLC
PRELIMINARY RESULTS FOR THE 52 WEEKSED 30 SEPTEMBER 2023
IMPROVED UNDERLYING PROFITABILITY, POSITIVE CASH FLOW AND
CONTINUED STRATEGIC MOMENTUM
Marston's, a leading UK operator of 1,414 pubs, today announces
its Preliminary Results for the 52 weeks ended 30 September 2023.
The period under review commenced on 2 October 2022.
Underlying Total
2023 2022 2023 2022
--------- ---------- ---------- ----------
Total revenue GBP872.3 GBP799.6 GBP872.3 GBP799.6
m m m m
--------- ---------- ---------- ----------
Pub operating profit GBP124.8 GBP115.4 GBP90.2 GBP 142.1
m m m m
--------- ---------- ---------- ----------
Share of associate GBP9.9 m GBP3.3 m GBP9.9 m GBP 3.3 m
--------- ---------- ---------- ----------
Profit/(loss) before GBP35.5 GBP27.7 m GBP(20.7) GBP 163.4
tax m m* m
--------- ---------- ---------- ----------
Net profit/(loss) GBP32.0 GBP27.5 m GBP(9.3) GBP 137.2
m m m
--------- ---------- ---------- ----------
Earnings/(loss) per
share 5.1 p 4.3 p (1.5)p 21.7p
--------- ---------- ---------- ----------
Net cash inflow GBP34.4 GBP26.2 m GBP34.4 GBP26.2 m
m m
--------- ---------- ---------- ----------
NAV per share GBP1.01 GBP1.02
--------- ---------- ---------- ----------
Underlying operating
margin 14.3% 14.4%
--------- ---------- ---------- ----------
*Includes a GBP21.6 million net loss in respect of interest rate
swap movements, a partial reversal of the GBP109.2 million net gain
reported in FY2022, and GBP31.2 million of charges in respect of
the impairment of freehold and leasehold properties.
Revenue and underlying pub operating profit growth, despite
macroeconomic environment
-- Continued progress on 'Back to a Billion' sales and net debt
targets, with revenue up 9.1% to GBP872.3 million
-- Like-for-like sales up 10.1% vs last year
-- Both drink and food sales were encouraging, demonstrating the
trading resilience of the Group's predominantly community pub
estate
-- 8% increase in underlying pub operating profit: GBP124.8 million (FY2022: GBP115.4 million)
-- Underlying operating margin effectively flat at 14.3% (2022:
14.4%), preserving margins in a high inflation environment
-- Improved share of CMBC's profits: GBP9.9 million (FY2022:
GBP3.3 million) and GBP21.6 million of dividends received
Positive cash generation and debt reduction
-- Operating cash inflow of GBP141.2 million (FY2022: GBP134
million) and net cash inflow for the period of GBP34.4 million
(FY2022: GBP26.2 million)
-- Continued progress with debt reduction strategy: net debt
excluding IFRS 16 lease liabilities reduced by GBP31 million to
GBP1,185 million (FY2022: GBP1,216 million)
-- GBP54.5 million generated from non-core strategic disposals, proceeds ahead of net book value
-- Successfully secured amendment and extension of banking
facilities totalling GBP340 million, comprising GBP300 million RCF
and GBP40 million private placement
Continued evolution of pub portfolio
-- 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
-- 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%
-- Successful trial of franchise-style model in food-led managed
pubs; sales growth significantly exceeding that of the broader food
business
-- Completed 41 capital schemes and GBP4m garden investment;
GBP50-55m of capex investment earmarked for FY2024
Current trading and outlook
-- Positive current trading, with like-for-like sales since year end +7.4% vs. last year
-- Christmas bookings tracking well and ahead of last year
-- Continuing to manage inflationary challenges within our
control: energy costs secured with electricity fixed until end of
FY2024 and gas until end of March 2025; offsetting other costs
through efficiencies and pricing strategies
-- Improved business resilience: targeting margin improvement of
at least 200bps in the medium term
-- Over and above the progress already made, the Group will
continue to find efficiencies to improve margin
-- Justin Platt joins as CEO on 10 January 2024
Commenting, William Rucker, Chair 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 that 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. "
ENQUIRIES:
Marston's PLC Tel: 01902 329516 Instinctif Partners Tel: 020 7457 2020
William Rucker, Chair 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 1,414 pubs situated nationally,
comprising managed, franchised and leased pubs
-- Marston's employs around 11,000 people
-- The Group uses a number of alternative performance measures
(APMs) to enable management and users of the financial statements
to better understand elements of financial performance in the
period. APMs are explained and reconciled in the appendix to the
financial statements
GROUP OVERVIEW
2023 PERFORMANCE OVERVIEW
2023 has been a year of focusing on the core estate and our
strategic aims with a clear objective to create a simplified ,
high-quality, predominantly community pub business, with minimal
exposure to city centres where demand is more volatile.
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 consumer demand remains reassuring,
and we have continued to make positive progress on guest
satisfaction measures and standards over the year, through our
engaged and focused pub teams.
We have traded well during the year, outperforming the market,
and have made encouraging earnings progress on last year, despite
the challenging macroeconomic environment. In addition, as
described below, we have taken cost actions to improve the
resilience of the business model and improve profitability for the
coming year.
The successful trial of our franchise-style model in our
food-led managed pubs, with sales growth significantly exceeding
that of our broader food business, provides positive momentum and
additional options in optimising our estate.
The performance supports the progress we are making against our
strategy and the transformation which has been implemented across
the business during the last two years. Our two primary corporate
goals remain: to reach two GBP1 billion financial targets over
time, namely to reduce the Group's debt (excluding IFRS 16 lease
liabilities) to below GBP1 billion by 2026 and the achievement of
GBP1 billion of sales. We continue to make progress on both of
these goals.
Trading
Revenue increased by 9.1% to GBP872.3 million (2022: GBP799.6
million), total retail sales in the Group's managed and franchised
pubs for the 52-week period were +9.8% on last year, and
like-for-like retail sales for the year as a whole were up 10.1%
versus FY2022.
Both drink sales and food sales have been strong, demonstrating
the resilience and appeal of our business. We continue to have
confidence that our pub strategy is delivering positive momentum
through the challenging macroeconomic environment.
Underlying operating profit excluding income from associates was
GBP124.8 million (2022: GBP115.4 million). Underlying operating
margins were effectively flat compared to last year, with a margin
of 14.3% (2022: 14.4%); managing price increases, product mix and
efficiencies to preserve margins in a period of high cost
inflation. H1 margin was 10.6% and H2 margin was 17.6%.
Underlying operating profit including income from associates was
GBP134.7 million (2022: GBP118.7 million), an increase of
13.5%.
Underlying profit before tax was GBP35.5 million (2022: GBP27.7
million). Statutory loss before tax was GBP(20.7) million (2022:
profit of GBP163.4 million), reflecting the impact of
non-underlying items explained later.
Property and net assets
Net assets were GBP640.1 million (2022: GBP648.1 million), with
net asset value stable at GBP1.01 per share (2022: GBP1.02).
The carrying value of the estate remains GBP2.1 billion (2022:
GBP2.1 billion). As a result of the valuation and leasehold
impairment review there is an effective freehold impairment of
GBP24.3 million and a leasehold impairment of GBP4.9 million. The
valuation of non-core pubs and an increase in discount rates have
contributed to the impairment. Importantly, despite the valuation
reflecting a challenging macroeconomic environment, the value of
the core estate has been maintained.
During the year we generated GBP54.5 million of non-core pub
disposal proceeds (net of VAT), which comprised GBP51.3 million
proceeds net of GBP1.1 million fees and GBP2.1 million lease
liabilities. The net proceeds were above book value.
Debt and financing
The vast majority of our borrowings are long-dated and
asset-backed, including the securitisation debt of c.GBP611
million, which has low interest rates in the current environment
and a payment structure that reduces debt. The weighted average
fixed interest rate payable by the Group on its securitised debt at
30 September 2023 was 5.1%. The Group has confidence in the loan to
value of its debt, which is improving year on year and is currently
68% for debt excluding IFRS 16 lease liabilities and 53% for the
securitisation debt.
93% of our borrowings are hedged and therefore not at risk from
any changes in interest rate movements that may occur during the
year. Further detail is set out in the Performance and Financial
Review.
Net debt, excluding IFRS 16 lease liabilities, was GBP1,185
million, a reduction of GBP31 million from last year (2022:
GBP1,216 million). Total net debt of GBP1,566 million (2022:
GBP1,594 million) includes IFRS 16 lease liabilities of GBP380
million (2022: GBP378 million).
Carlsberg Marston's Brewing Company (CMBC)
Income from associates was GBP9.9 million (2022: GBP3.3
million), which is the Group's share of the statutory profit after
tax generated by CMBC. CMBC's results show an improvement from last
year.
Dividends from associates of GBP21.6 million were received
(2022: GBP19.4 million), the prior year dividend having primarily
resulted from one-off working capital movements. We remain
confident that we will continue to receive future dividends from
CMBC as its trading continues to improve.
Dividend
The Board confirms that given its priority to reduce the overall
level of borrowing and the continued macroeconomic uncertainty, no
dividends will be paid in respect of financial year 2023. The Board
is cognisant of the importance of dividends to shareholders and
intends to keep potential future dividends under review.
OUTLOOK
New CEO
Post the year end, the Group announced that Andrew Andrea had
agreed with the Board that he would step down as Chief Executive
Officer as of 17 November 2023, albeit he is available to the
business for a period to ensure a smooth handover of
responsibilities. The Board wishes to take this opportunity to
express its gratitude to Andrew for his commitment to Marston's
over his tenure, which extends over 20 years.
Following an external process, Justin Platt has been appointed
as Chief Executive Officer with effect from 10 January 2024. With
over 30 years' experience in hospitality and consumer-facing
businesses, Justin spent the last 12 years at Merlin Entertainments
- most recently as Chief Strategy Officer and prior to that in a
variety of operational leadership roles. William Rucker, Chair,
will support the management transition in the short interim period
with the Executive team reporting directly into him prior to Justin
being in situ.
Costs
As highlighted in our October trading update, 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, generating savings in FY2024
onwards.
The Group is highly confident of delivering cost efficiencies of
at least a further GBP3 million in FY2024, principally from savings
in energy usage and pub labour costs as described in the strategic
review below, further improving operating profit margin. These cost
reductions are expected to translate into higher pub operating
profitability in future years than was previously anticipated. This
cost efficiency delivery is not impacted by the changes to National
Minimum (Living) Wage ("NLW") rates.
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.
With regard to interest costs as described above, our borrowings
are 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.
It is anticipated that the increases to the NLW rates, which
were announced in the recent Autumn Statement will be c.GBP1
million for H2 of FY2024 (c.GBP2 million annualised). We intend to
mitigate this increase through a variety of actions including the
acceleration of our cost efficiency programme, together with price
increases where appropriate. Other Autumn Statement measures
announced, such as the changes to business rates, are expected to
have minimal impact.
Current trading
The positive trading momentum from last year has continued, with
like-for-like sales in our managed and franchised pubs since year
end up 7.4% vs the same period last year, with growth in both.
Bookings for the Christmas period are promising and tracking
ahead of last year. As always, walk-in trade represents a
significant proportion of overall sales over the period; however,
the booking momentum demonstrates that, despite economic pressures,
people still want to go out and celebrate in a pub.
We remain cognisant of the current macroeconomic environment,
and the resulting challenges this brings in respect of cost
inflation and the potential impact on disposable income. However,
pubs have historically demonstrated their resilience as an
affordable treat and there is no discernible evidence in our
trading performance to suggest that there has been a material
change to consumer behaviour.
Outlook
Looking forward, the combination of our strategy and the
principally community location of our pub portfolio positions us
well to withstand the challenging consumer environment. In
addition, the actions to dispose of non-core pubs and introduce our
franchise-style model in our food-led pubs will ensure we have a
portfolio of well-invested pubs which will continue to deliver
high-quality earnings and sustainable future growth.
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.
STRATEGIC PRIORITIES
Market Dynamics
Last year saw the first restriction-free financial year of
trading since 2019 and, as such, it was the first 'clean' year in
which to understand the behaviour of consumers following the
pandemic.
We have learnt a great deal to inform our future trading
strategies. It is clearer than ever before that delivering a great
guest experience is key. Consumers are increasingly demanding in
this regard, and our guests are prepared to spend more money when
they visit our pubs. Red letter days are becoming more and more
important and, from an impulse perspective, the Google search "Best
place for" is increasingly used by consumers, whether for a great
pub garden, televised sport, or dog friendliness. The evolution of
working from home is stabilising and, in our view, this behavioural
change is best suited to community pub businesses such as Marston's
with limited exposure to city centres.
However, inflationary pressures have continued this year, and
the UK has seen significant increases in interest rates, both of
which have presented challenges to consumers and businesses alike.
Despite this, what is clear is that the demand to go out and
socialise and enjoy the everyday treat of going to the local pub,
remains core to many people's lives.
Strategy
Our vision and strategy is unchanged. That is creating 'Pubs to
be proud of', comprising a high-quality, predominantly community
pub business, with minimal exposure to city centres.
Operationally, we are focused on the core pillars of driving
guest satisfaction in a great environment served by engaged and
motivated teams. This remains relevant despite the macroeconomic
challenges continuing to impact the consumer.
A key driver of our strategy is simplification. We have two core
propositions: Community is our entry point offer, and Signature is
our more premium mainstream offer for pubs with a more affluent
customer base. Whilst food is clearly important in many of our
pubs, we are focused on ensuring that, regardless of food mix, all
our pubs are regarded as a place to socialise and have a drink in a
welcoming environment. This year we have also undertaken a detailed
estate review which enabled us to consider a number of future
operational strategies from a rich and relevant data source, from
targeted capital expenditure to opportunities linked to cluster
planning, including potential acquisitions or disposals. The estate
review has been one of the main contributing factors to the
increase in our disposals guidance for FY2024.
Financially, we are focused on three key priorities which we are
confident will deliver shareholder value in the medium to long term
by creating a sustainable business that is growing sales, earnings
and cash generation, whilst reducing debt levels and increasing
returns.
Borrowings Below GBP1 Billion by 2026
This corporate goal is our main strategic focus and where we see
the greatest shareholder value creation opportunity. Our actions to
achieve this are twofold:
-- Accelerated disposal of non-core assets : in 2023 we
generated GBP55 million of disposal proceeds (net of VAT) from the
sale of non-core assets. Following a further strategic review of
the estate we are targeting around GBP50 million in financial year
2024. Thereafter we are anticipating returning to a natural churn
rate of GBP10-15 million of disposals per annum.
-- Growth of Free Cash Flow: in achieving the borrowings target
we are seeking to maximise the free cash flow of the business which
provides us with optionality on the allocation of capital in
future, including additional capital expenditure and the
reintroduction of dividend payments. Given the hedged debt profile
of the business, outside pub EBITDA, the future cash flows are
predictable with interest charges falling as we pay down debt and
the cessation of pension payments targeted by 2025.
The effective use of capex remains key in both maintaining the
quality of the estate and driving future growth. Underpinning the
estate repositioning described above is a comprehensive capital
programme focused on deploying capital as efficiently as possible
and maximising returns. During the year we completed 41 capital
schemes and we invested GBP4 million in our pub gardens. The Group
has GBP50-55 million of capex investment earmarked for FY2024.
Sales Above GBP1 Billion
To complement our debt reduction strategy, we will continue the
progress made this year on this corporate goal by driving sales and
gaining market share. There are five key actions to achieve
this:
-- Clear pub goals : we have previously set out the three core
pub goals of high guest satisfaction scores, engaged teams and
strong pub standards, and there is a clear correlation between
attainment of pub goals and sales. We have made excellent progress
on all three measures this year with an average Google star rating
of 4.4 and a Reputation score of 766, high employee engagement with
an average score of 8.2 and aggregated participation rate of 84%,
and 93% of our managed and partnership pubs have a 5* EHO
rating.
-- Driving a harder sales culture : our internal call-to-action
on driving sales is 'Never Full Fancy Another' and this is focused
on ensuring that we maximise spend per visit and we can always
accommodate a guest, regardless of how busy a pub is. During the
year, as part of the garden investment programme, we developed our
order and pay system further and have seen continued increased
usage. In addition, in the final quarter, we launched a drinks
incentive for hourly paid team members which increased both drinks
volumes and spend per visit and this will be continued into 2024.
We also refined our booking system to ensure an improved booking
experience for guests and our pub teams alike.
-- Effective category management: we continue to simplify our
product proposition to make our supply chain as efficient as
possible and make it simple for our teams to recommend and serve
quality drink or food, without compromising guest choice. We have
launched a new drinks strategy based on similar principles, which
is delivering enhanced margins in the form of upsell opportunities,
improved speed of service and reduced stock holding requirements
and wastage.
-- Efficient digital and marketing strategy : an effective
marketing strategy underpins increasing footfall and our focus is
on ensuring any marketing expenditure is deployed efficiently with
the emphasis on maximising activity returns. We have continued to
evolve and develop our digital strategy during the year with
improved pub websites and the introduction of card-linked
partnerships from which we anticipate an uplift in 2024. In
addition, our targeted door-drop and digital campaigns in 2023
generated a pleasing return on investment and we shall continue
this in the coming year.
-- Development of Marston's franchise-style agreements : the
partnership model has been extremely successful in our wet-led pubs
since it launched in 2009 and now operates in c.730 pubs. Key to
its success is that the model ensures all stakeholders are focused
on maximising sales and the 'owner driver' mentality of the partner
has delivered consistently strong results. The estate review and
simplification of the business has now enabled us to launch the
model into food-led pubs with 19 pubs now operating as food-led
partnerships. The initial results have been very encouraging and we
are targeting 50 pubs (c.11% of our food-led pubs) to be operating
under this model by the end of 2024.
Improved Business Resilience: Margin Improvement of at least
200bps in the medium term
Whilst driving the top line is key to delivering growth, it is
equally critical to ensure that those sales are effectively
converted into profit. As reported, operating margins effectively
remained flat in 2023 following a year of significant inflation,
and we are one of the highest margin operators in the sector.
Regardless of this already strong position, we believe there are
clear opportunities to drive margins harder in the next 2-3 years,
including:
-- Pub support centre and culture : the simplification of the
business has enabled us to refine our structure and we reduced
central payroll costs by GBP5 million, of which the vast majority
will be realised in 2024. In addition, we have internally launched
a focus on cost reduction and 'Every Penny Counts' which is aimed
at embedding a culture of reviewing any expenditure across the
business, no matter how small.
-- Pub labour : during the year, we rolled out our labour
scheduling system, the final modules of which were implemented in
November 2023, providing us with a system to ensure we are
deploying labour in our pubs in the most efficient way.
-- Energy : the increased cost of energy has been widely
reported and whilst we are seeing an improvement in energy costs
for 2024, we do not anticipate those costs falling back to
pre-pandemic levels. The focus is therefore to reduce underlying
energy usage through a combination of investment and
incentivisation and seek opportunities through innovative power
purchasing. We have now completed the rollout of smart meters
across the managed and partnership estate and integrated this into
our reporting systems, which enables us to monitor usage and
identify usage savings at a more granular level.
People
Our people are the main underpin to the performance of our
business - in short, happy engaged teams deliver great guest
experiences, which deliver higher sales. Our engagement scores have
improved in the year and survey participation is extremely high -
over 80% of our people have participated in at least one of our
monthly surveys during the year. Employee turnover has reduced
during the year and licensee stability remains an important metric
in ensuring we have the right operator in every pub, first
time.
From a recruitment perspective, we continue to evolve the use of
social media platforms and media to attract talent. In addition, we
are looking at alternative talent pools, and this year we have made
excellent progress on our Excel programme (formerly Latitude) which
supports ex-offenders with employment and training opportunities.
We have recently launched the 'Lock Inn' in collaboration with HMP
Liverpool, which is a training facility inside the prison that we
have converted to look and feel like a Marston's pub and will
provide guaranteed job opportunities for any ex-offenders that
complete the training course upon their release.
The development of internal talent is also key to long-term
success. Our Aspire programme which develops deputy managers was
successfully launched this year and we plan to extend this in 2024
to increase the pipeline of new licensees, whether that be as a
manager or Pub Partner. We have a well-established apprenticeship
programme with 306 apprentices within the business at a retention
rate of over 75%.
Doing more to be proud of
As we have previously reported, our environmental, social and
governance (ESG) strategy is embedded and supports our business
strategy through our 'Doing more to be proud of' (DM2BPO)
initiative and our four core pillars: Planet, People, Product and
Policy. The People and Planet-positive practices resonate and
reflect our core values and strategic priorities, whilst being
underpinned by strong Policy - that is good governance, risk
management processes and stewardship. Earlier this month, we
published our inaugural Insight Report which sets out our aims,
targets, and intentions, and shines a light on our focus areas,
positive impacts and where we can improve.
Highlights this year include:
-- Launching our Diversity & Inclusion strategy where our
people are encouraged to 'come as you are'.
-- E stablished our carbon baseline in conjunction with the Zero
Carbon Forum and development of our roadmap to Net Zero.
-- Over 170 pubs with live EV charging points, with over 40
million miles travelled by electric vehicles from our pubs since
inception.
-- 302,575 pints per day saving from identification and resolution of water inefficiencies.
-- Over 23,000 carvery meals rescued from waste, being resold
with Too Good to Go, saving c.60 tonnes of CO(2) e.
-- Increasing our FTSE4Good Score to 4.
PERFORMANCE AND FINANCIAL REVIEW
Revenue
Revenue increased by 9.1% to GBP872.3 million (2022: GBP799.6
million), demonstrating the resilience and appeal of our
predominantly community pub estate in the still-challenging
macroeconomic environment and with momentum from strong drink and
food sales. Our guests still want to visit our pubs for an
affordable treat.
Like-for-like retail sales for the year as a whole were up 10.1%
versus FY2022, showing positive momentum. Both drink sales and food
sales have been strong.
Total retail sales in the Group's managed and franchised pubs
for the 52-week period increased by 9.8% to GBP806.1 million (2022:
GBP 734.1 million) and total outlet sales increased by 10.0% to
GBP832.8 million (2022: GBP757.2 million).
Within our pub business we operated 230 pubs under the
traditional tenanted and leased model generating revenues of
GBP39.5 million (2022: GBP42.4 million) . It is still our intention
to convert the remainder of the tenanted and leased estate to
turnover based models in the medium term.
Accommodation sales grew to GBP35.6 million (2022: GBP33.1
million), benefitting from the continuing demand for UK
staycations.
Profit
Underlying operating profit excluding income from associates was
GBP124.8 million (2022: GBP115.4 million). Underlying operating
margins were effectively flat compared to last year, with a margin
of 14.3% (2022: 14.4%); managing price increases, product mix and
efficiencies to preserve margins in a period of high cost
inflation. Due to the seasonal nature of the Group's business, the
majority of profit is typically earned in the second half of the
year. H1 margin was 10.6% and H2 margin was 17.6%.
Underlying EBITDA excluding income from associates increased to
GBP170.3 million (2022: GBP159.6 million).
Underlying profit before tax increased to GBP35.5 million (2022:
GBP27.7 million) and statutory loss before tax was GBP(20.7)
million (2022: profit of GBP163.4 million), reflecting the impact
of non-underlying items.
The difference between underlying profit before tax and profit
before tax is GBP56.2 million of non-underlying items, which
includes a GBP21.6 million net loss in respect of interest rate
swap movements, GBP31.2 of impairments to the freehold and
leasehold property values, GBP2.9 million of reorganisation,
restructuring and relocation costs and GBP0.5 million of pension
past service costs.
Interest
Our borrowing is largely long-dated and asset-backed. The
securitisation is in place until 2035 which provides financing
security and high visibility of future cash flows; this is of
particular importance in an environment where interest rates have
been rising to curb inflation. The securitisation is fully hedged
until 2035. Other lease related borrowings are index linked, capped
and collared at 1%-4%, providing protection against high inflation.
Of our GBP300 million bank facility, GBP120 million is now hedged.
Overall, we are 93% hedged, providing significant protection
against changes in interest rate movements that may occur during
the year.
The GBP60 million forward floating-to-fixed interest rate swap,
which was due to take effect from April 2025, was brought forward
and started in October 2022.
Taxation
Underlying profit before tax was GBP35.5 million (2022: GBP27.7
million) upon which the underlying tax charge was GBP3.5 million
(2022: GBP0.2 million). This gives an underlying tax rate of 9.9%.
The effective tax rate is lower than the standard rate of
corporation tax primarily due to the post-tax share of income from
associates, additional deductions on which tax relief is available
including super-deductions, and an adjustment to the deferred tax
on property calculation relating to the prior period.
The total tax credit is GBP11.4 million (2022: charge of GBP26.2
million) on total loss before tax of GBP(20.7) million (2022:
profit of GBP163.4 million), with an effective tax rate of 55.1%.
The key drivers outlined above increase the tax rate (credit) on
the total loss for the year, and there is a further positive impact
due to the additional tax credits associated with PPE impairments,
and the rate difference between current tax and deferred tax.
Non-underlying items
There is a net non-underlying charge of GBP56.2 million before
tax and GBP41.3 million after tax.
The GBP56.2 million charge primarily relates to a GBP21.6
million net loss in respect of interest rate swap movements and a
GBP31.2 million net impairment to the freehold and leasehold
property values following the external estate valuation of the
Group's effective freehold properties and the impairment review of
the Group's leasehold properties undertaken during the year.
Other non-underlying items comprise GBP2.9 million of
reorganisation, restructuring and relocation costs, including the
reduction to head office costs detailed earlier, and GBP0.5 million
of pension past service costs.
The tax credit relating to these non-underlying items is GBP14.9
million.
Earnings per share
Total earnings per share were (1.5) pence loss per share (2022:
21.7 pence per share). Underlying earnings per share were 5.1 pence
per share (2022: 4.3 pence per share).
Capital expenditure and disposals
Capital expenditure was GBP65.3 million in the year, including
property acquisitions of GBP0.4 million (2022: GBP70.1 million). We
expect that capital expenditure will be around GBP50-GBP55 million
in 2024, as we focus on the most effective use of our capital spend
for our well-invested pubs.
During the year we generated GBP54.5 million of non-core pub
disposal proceeds (net of VAT), which comprised GBP51.3 million
proceeds net of GBP1.1 million fees and GBP2.1 million lease
liabilities. The net proceeds were above book value.
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.
Property
The Group has an annual external valuation of its properties and
all pubs are inspected on a rotational basis, with approximately
one third of the estate being inspected each year and the remainder
subject to a desktop valuation . Christie & Co undertook an
external valuation in July 2023 and the results have been reflected
in the full year accounts.
The carrying value of the estate remains GBP2.1 billion (2022:
GBP2.1 billion). As a result of the valuation and leasehold
impairment review there is an effective freehold impairment of
GBP24.3 million and a leasehold impairment of GBP4.9 million. The
valuation of non-core pubs and an increase in discount rates have
contributed to the impairment. Importantly, despite the valuation
reflecting a challenging macroeconomic environment, the value of
the core estate has been maintained.
Share of Associate - Carlsberg Marston's Brewing Company
(CMBC)
Included in our Group income statement is income from associates
of GBP9.9 million (2022: GBP3.3 million), which is the Group's
share of the statutory profit after tax generated by CMBC. CMBC's
results show encouraging recovery from last year.
The Group also benefits from dividends received from CMBC, as
shown in our Group cash flow statement. Dividends from associates
of GBP21.6 million were received (2022: GBP19.4 million), the prior
year dividend having primarily resulted from one-off working
capital movements. Dividends in respect of CMBC's calendar
financial year are paid in September in year (for January - June)
and March the following year (for July - December). The dividends
are generated from CMBC's operating cash flows adjusted for working
capital and other movements.
We remain confident we will continue to receive future dividends
from CMBC as its trading continues to improve and produce positive
results.
Pensions
The balance on our final salary scheme was a GBP12.9 million
surplus at 30 September 2023 (2022: GBP15.1 million surplus). This
change has primarily been driven by the increase in the discount
rate assumption, from 5.2% in October 2022 to 5.6% in October 2023,
and a fall in asset values. The net annual cash contribution is
c.GBP6m and is only expected to continue for the short term. The
results of the next triennial valuation are expected in early
2024.
Debt and financing
The Group remained focused on cash management during the year
and continued to prioritise cash preservation whilst maintaining an
appropriate level of pub investment to ensure our pubs are well
positioned to deliver our strategy.
The Group generated a net cash inflow for the period of GBP34.4
million including IFRS 16 (GBP29.3 million excluding IFRS 16). The
net cash inflow would have been GBP63.4 million were it not for the
working capital outflows of GBP29.0 million, principally comprising
one-off cash flows arising from the final settlement following our
transitional services agreement with CMBC. Future recurring cash
flows are expected to be in line with our debt reduction plans, as
part of which we are targeting debt reduction of at least GBP60
million in FY2024.
Net debt, excluding IFRS 16 lease liabilities, was GBP1,185
million, a reduction of GBP31 million from last year (2022:
GBP1,216 million). Total net debt of GBP1,566 million (2022:
GBP1,594 million) includes IFRS 16 lease liabilities of GBP380
million (2022: GBP378 million).
There was an operating cash inflow of GBP141.2 million in the
year, ahead of last year (2022: GBP134.0 million), principally
reflecting higher profits in the year. The operating cash inflow
would have been GBP170.2 million were it not for the working
capital outflows of GBP29.0 million.
As set out in our Interim Results, we successfully secured an
amendment and extension ('A&E') to our banking facility and
private placement to the end of January 2025. The revised GBP340
million facilities are comprised of a GBP300 million Revolving
Credit Facility (the 'RCF') with the continued support of all of
our existing banks and with two new banks keen to join the
syndicate, together with a restatement of our current GBP40 million
private placement. The RCF replaces the Group's existing GBP280
million facility. The facility cost is variable: to be determined
by the level of leverage or drawings from time to time alongside
changes in the SONIA rate, together with issue costs. As previously
reported, GBP120 million of the facility is hedged.
During the period and prior to the A&E, we secured the
covenant amendments that we required, as reported in our 2022
financial results, again demonstrating the good relationship and
support we continue to have with our banking group and private
placement provider. No further covenant amendments have been
required.
The Group anticipates commencing formal discussions with the RCF
banks and private placement holder in early 2024 in order to secure
the refinancing of these facilities to beyond January 2025. Whilst
there is no guarantee, based on the successful A&E to the RCF
and private placement during the period, and the positive
conversations held to date, the Directors are confident that they
would expect to be able to secure refinancing on similar terms.
The vast majority of our borrowings are long-dated and
asset-backed, including the securitisation debt of c.GBP611
million, which has low interest rates in the current environment
and a payment structure that reduces debt. The weighted average
fixed interest rate payable by the Group on its securitised debt at
30 September 2023 was 5.1%. The Group has confidence in the loan to
value of its debt, which is improving year on year and is currently
68% for debt excluding IFRS 16 lease liabilities and 53% for the
securitisation debt.
The Group's financing, providing an appropriate level of
flexibility and liquidity for the medium term, comprises:
-- GBP300 million bank facility to January 2025 - at the year
end GBP229 million was drawn providing headroom of GBP71 million
and non-securitised cash balances of GBP10 million
-- GBP40 million private placement in place until January 2025
-- Seasonal overdraft of GBP5-GBP20 million, depending on dates
- which was not used at the period end
-- Long-term securitisation debt of approximately GBP611 million
- at the year end GBP10 million of the GBP120 million
securitisation liquidity facility had been utilised, which was
repaid in October 2023.
-- Long-term other lease related borrowings of GBP338 million
-- GBP380 million of IFRS 16 leases
The securitisation is fully hedged to 2035. Other lease related
borrowings are index-linked capped and collared at 1% and 4%. There
are GBP120 million of floating-to-fixed interest rate swaps against
the bank facility: GBP60 million is fixed at 4.03% until 2031 and
GBP60 million is now fixed at 3.45% until 2029.
In summary, we have adequate cash headroom in our bank facility
to provide operational liquidity. Importantly, c.93% of our medium
to long-term financing is hedged thereby minimising any exposure to
interest rate increases that may arise over the next few years.
Going Concern
As part of the annual reporting process, we are formally
required to assess the extent to which our forecasts and therefore
our financing requirements may or may not affect our going concern
assumption in preparing the accounts. In performing this
assessment, we have considered the Group's financial position and
exposure to principal risks, including the cost-of-living crisis
and inflationary pressure. The Group's forecasts assume moderate
sales price increases, operational costs that have not been secured
rising broadly in line with inflation. We have also considered a
severe but plausible downside scenario, incorporating a 5%
reduction in sales volume as a consequence of the cost-of-living
crisis and current inflationary pressures along with a reasonably
plausible increase in costs compared to the base case forecast.
The conclusion of this assessment was that the Directors are
satisfied that the Group has adequate liquidity and is not forecast
to breach any covenants within its banking group, private placement
or securitisation in its base case forecast. The Directors are also
satisfied that the Group has adequate liquidity to withstand the
severe but plausible downside scenario. However, in this severe but
plausible forecast only, even after factoring in mitigations under
the control of management such as reductions in discretionary
spend, the Group would be required to obtain covenant amendments in
respect of its Interest Cover covenant associated with the Group's
bank and private placement borrowings in the outer quarters of the
going concern period.
In such a severe but plausible downside, the Group could
leverage the supportive relationship it has with its lenders and
renegotiate the terms of its financing in advance of any covenant
amendment being required or it would seek a covenant amendment.
Whilst there is no guarantee, based on covenant amendments
previously secured, the successful amend and extend to the RCF and
private placement during the period and the continued positive
relationships, the Directors would be very confident that they
would be able to secure any such amendments. Accordingly, the
financial statements continue to be prepared on the going concern
basis, but with a material uncertainty arising from the current
macroeconomic environment. Full details are included in Note 1.
CMBC: Due to the size of Marston's investment in CMBC, and the
potential sensitivity of the recoverable amount of the investment
to a change in assumptions, an impairment review was undertaken
under IAS 36 'Impairment of Assets'. The recoverable amount of our
investment was estimated on a value in use basis. This was based on
forecast cash flows approved by the board of CMBC, which were
reviewed by management and CMBC's external auditors. The impairment
review indicated there was sufficient headroom over the carrying
amount and consequently no impairment has been recognised. A number
of different potential downside scenarios were considered and
changing each key assumption to the limit of the reasonably
possible downside did not result in impairment. A severe downside
scenario which considered a combination of reduced dividends
together with a decrease in growth rate and a large increase in
discount rate could lead to a small impairment.
Market Capitalisation: Uncertainty and restricted trading during
the last few years, including the pandemic and cost-of-living
crisis, have negatively impacted our share price. This share price
suppression, which also affects our industry peers and other UK
listed entities to varying extents, has resulted in a gap between
our market capitalisation and asset values. The Group has performed
a market capital gap analysis to determine whether an impairment of
the asset values is required. The analysis showed that there is
sufficient headroom between the total asset value and enterprise
value such that no impairment is required.
Key estimates and significant judgements
Under IFRS the Group is required to make estimates and
assumptions that affect the application of policies and reported
amounts. Estimates and judgements are continually evaluated and are
based on historical experience and other factors including
expectations of future events that are believed to be reasonable
under the circumstances. Actual results may differ from these
estimates. The Group's key assumptions and significant judgements
are:
-- Non-underlying items - determination of items to be classified as non-underlying.
-- Property, plant, and equipment - valuation of effective freehold land and buildings.
-- Retirement benefits - actuarial assumptions in respect of the
defined benefit pension plan, which include discount rates, rates
of increase in pensions, inflation rates and life expectancies.
-- Financial instruments - valuation of derivative financial instruments.
-- CMBC - recoverable amount of the investment in associate estimated on a value in use basis.
Notes:
-- Prior period was a 52-week period to 1 October 2022.
-- The Group uses a number of alternative performance measures
(APMs) to enable management and users of the financial statements
to better understand elements of financial performance in the
period. APMs are explained and reconciled in the appendix to the
financial statements.
GROUP INCOME STATEMENT
For the 52 weeks ended 30 September 2023
2023 2022
-------------------------------------- -----------------------------------------
Non-
underlying Non-
Underlying(1) (1) Total Underlying(1) underlying(1) Total
GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 872.3 - 872.3 799.6 - 799.6
Net operating expenses (747.5) (34.6) (782.1) (684.2) 26.7 (657.5)
Income from associates 9.9 - 9.9 3.3 - 3.3
Operating profit/(loss) 134.7 (34.6) 100.1 118.7 26.7 145.4
----------------------------- -------------- ------------ -------- -------------- --------------- --------
Finance costs (100.4) - (100.4) (91.9) - (91.9)
Finance income 1.2 - 1.2 0.9 0.5 1.4
Interest rate swap
movements - (21.6) (21.6) - 109.2 109.2
Contingent consideration
fair value movement - - - - (0.7) (0.7)
----------------------------- -------------- ------------ -------- -------------- --------------- --------
Net finance (costs)/income (99.2) (21.6) (120.8) (91.0) 109.0 18.0
--------
Profit/(loss) before
taxation 35.5 (56.2) (20.7) 27.7 135.7 163.4
Taxation (3.5) 14.9 11.4 (0.2) (26.0) (26.2)
----------------------------- -------------- ------------ -------- -------------- --------------- --------
Profit/(loss) for
the period attributable
to equity shareholders 32.0 (41.3) (9.3) 27.5 109.7 137.2
----------------------------- -------------- ------------ -------- -------------- --------------- --------
The results for the current period reflect the 52 weeks ended 30
September 2023 and the results for the prior period reflect the 52
weeks ended 1 October 2022.
2023 2022
Earnings/(loss) per share: p p
------------------------------------------ ------ -----
Basic (loss)/earnings per share (1.5) 21.7
Basic underlying(1) earnings per share 5.1 4.3
Diluted (loss)/earnings per share (1.5) 21.4
Diluted underlying(1) earnings per share 5.1 4.3
------------------------------------------- ------ -----
(1) Alternative performance measures (APMs) are defined and
reconciled to a statutory equivalent in the APM section of these
Preliminary Results.
GROUP STATEMENT OF COMPREHENSIVE INCOME
For the 52 weeks ended 30 September 2023
2023 2022
GBPm GBPm
----------------------------------------------------------- ------- -------
(Loss)/profit for the period (9.3) 137.2
------------------------------------------------------------ ------- -------
Items of other comprehensive income that may subsequently
be reclassified to profit or loss
(Losses)/gains arising on cash flow hedges (3.0) 23.9
Transfers to the income statement on cash flow
hedges 11.4 17.0
Other comprehensive income/(expense) of associates 0.8 (0.8)
Tax on items that may subsequently be reclassified
to profit or loss (2.1) (10.2)
------------------------------------------------------------ ------- -------
7.1 29.9
------------------------------------------------------------ ------- -------
Items of other comprehensive income that will
not be reclassified to profit or loss
Remeasurement of retirement benefits (9.2) 23.3
Unrealised surplus on revaluation of properties 95.6 105.8
Reversal of past revaluation surplus (93.9) (34.3)
Tax on items that will not be reclassified to profit
or loss (0.2) (20.5)
------------------------------------------------------------ ------- -------
(7.7) 74.3
------------------------------------------------------------ ------- -------
Other comprehensive (expense)/income for the period (0.6) 104.2
------------------------------------------------------------ ------- -------
Total comprehensive (expense)/income for the period
attributable to equity shareholders (9.9) 241.4
------------------------------------------------------------ ------- -------
The results for the current period reflect the 52 weeks ended 30
September 2023 and the results for the prior period reflect the 52
weeks ended 1 October 2022.
GROUP CASH FLOW STATEMENT
For the 52 weeks ended 30 September 2023
2023 2022
GBPm GBPm
---------------------------------------------------------- -------- --------
Operating activities
(Loss)/profit for the period (9.3) 137.2
Taxation (11.4) 26.2
Net finance costs/(income) 120.8 (18.0)
Depreciation and amortisation 45.5 44.2
Working capital movement (29.0) (31.8)
Non-cash movements 12.3 (30.4)
Decrease in provisions and other non-current liabilities (0.8) (7.0)
Difference between defined benefit pension contributions
paid and amounts charged (7.6) (7.3)
Dividends from associates 21.6 19.4
Income tax (paid)/received (0.9) 1.5
----------------------------------------------------------- -------- --------
Net cash inflow from operating activities 141.2 134.0
----------------------------------------------------------- -------- --------
Investing activities
Interest received 1.8 0.9
Sale of property, plant and equipment and assets
held for sale 51.3 9.9
Purchase of property, plant and equipment and
intangible assets (65.3) (70.1)
Disposal of subsidiary - 28.2
Finance lease capital repayments received 2.5 2.7
Net transfer (to)/from other cash deposits (0.1) 0.2
Net cash outflow from investing activities (9.8) (28.2)
----------------------------------------------------------- -------- --------
Financing activities
Interest paid (93.1) (79.4)
Arrangement costs of bank facilities (4.0) -
Repayment of securitised debt (39.4) (37.4)
Advance of bank borrowings 14.0 25.0
Net repayments of capital element of lease liabilities (5.1) (8.5)
Repayment of other borrowings (5.0) (10.0)
Net cash outflow from financing activities (132.6) (110.3)
----------------------------------------------------------- -------- --------
Net decrease in cash and cash equivalents (1.2) (4.5)
----------------------------------------------------------- -------- --------
The cash flows for the current period reflect the 52 weeks ended
30 September 2023 and the cash flows for the prior period reflect
the 52 weeks ended 1 October 2022.
GROUP BALANCE SHEET
As at 30 September 2023
30 September 1 October
2023 2022
GBPm GBPm
---------------------------------- -------------- ----------
Non-current assets
Intangible assets 32.9 35.1
Property, plant, and equipment 2,064.8 2,111.0
Interests in associates 250.9 260.3
Other non-current assets 15.0 17.9
Deferred tax assets 0.9 -
Retirement benefit surplus 12.9 15.1
Derivative financial instruments 2.7 1.8
2,380.1 2,441.2
---------------------------------- -------------- ----------
Current assets
Derivative financial instruments 1.1 3.3
Inventories 14.9 12.6
Trade and other receivables 26.9 30.1
Current tax assets 0.4 -
Other cash deposits 3.1 3.0
Cash and cash equivalents 26.5 27.7
------------------------------------- -------------- ----------
72.9 76.7
Assets held for sale 1.4 4.8
------------------------------------- -------------- ----------
74.3 81.5
---------------------------------- -------------- ----------
Current liabilities
Borrowings (65.9) (64.1)
Trade and other payables (170.4) (204.4)
Current tax liabilities - (1.2)
Provisions for other liabilities
and charges (1.4) (1.0)
------------------------------------- -------------- ----------
(237.7) (270.7)
---------------------------------- -------------- ----------
Non-current liabilities
Borrowings (1,529.5) (1,560.6)
Derivative financial instruments (37.4) (25.5)
Other non-current liabilities (7.1) (6.5)
Provisions for other liabilities
and charges (2.6) (3.3)
Deferred tax liabilities - (8.0)
(1,576.6) (1,603.9)
---------------------------------- -------------- ----------
Net assets 640.1 648.1
Shareholders' equity
Equity share capital 48.7 48.7
Share premium account 334.0 334.0
Revaluation reserve 412.1 417.1
Capital redemption reserve 6.8 6.8
Hedging reserve (44.4) (50.7)
Own shares (110.6) (110.9)
Retained earnings (6.5) 3.1
------------------------------------- -------------- ----------
Total equity 640.1 648.1
------------------------------------- -------------- ----------
GROUP STATEMENT OF CHANGES IN EQUITY
For the 52 weeks ended 30 September 2023
Equity Share Capital
share premium Revaluation redemption Hedging Own Retained Total
capital account reserve reserve reserve shares earnings equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------------- --------- --------- ------------ ------------ --------- -------- ---------- --------
At 2 October 2022 48.7 334.0 417.1 6.8 (50.7) (110.9) 3.1 648.1
Loss for the period - - - - - - (9.3) (9.3)
Remeasurement of
retirement benefits - - - - - - (9.2) (9.2)
Tax on remeasurement
of retirement benefits - - - - - - 2.3 2.3
Losses on cash flow
hedges - - - - (3.0) - - (3.0)
Transfers to the
income statement
on cash flow hedges - - - - 11.4 - - 11.4
Tax on hedging reserve
movements - - - - (2.1) - - (2.1)
Other comprehensive
income of associates - - - - - - 0.8 0.8
Property revaluation - - 95.6 - - - - 95.6
Property impairment - - (93.9) - - - - (93.9)
Deferred tax on
properties - - (2.5) - - - - (2.5)
Total comprehensive
(expense)/income - - (0.8) - 6.3 - (15.4) (9.9)
------------------------- --------- --------- ------------ ------------ --------- -------- ---------- --------
Share-based payments - - - - - - 0.4 0.4
Sale of own shares - - - - - 0.3 (0.3) -
Transfer disposals
to retained earnings - - (5.0) - - - 5.0 -
Transfer tax to
retained earnings - - 0.8 - - - (0.8) -
Changes in equity
of associates - - - - - - 1.5 1.5
------------------------- --------- --------- ------------ ------------ --------- -------- ---------- --------
Total transactions
with owners - - (4.2) - - 0.3 5.8 1.9
------------------------- --------- --------- ------------ ------------ --------- -------- ---------- --------
At 30 September
2023 48.7 334.0 412.1 6.8 (44.4) (110.6) (6.5) 640.1
------------------------- --------- --------- ------------ ------------ --------- -------- ---------- --------
For the 52 weeks ended 1 October 2022
Equity Share Capital
share premium Revaluation redemption Hedging Own Retained Total
capital account reserve reserve reserve shares earnings equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------- --------- --------- ------------ ------------ --------- -------- ---------------- --------
At 3 October 2021 48.7 334.0 360.5 6.8 (81.4) (111.1) (151.1) 406.4
Profit for the
period - - - - - - 137.2 137.2
Remeasurement of
retirement
benefits - - - - - - 23.3 23.3
Tax on
remeasurement
of retirement
benefits - - - - - - (5.8) (5.8)
Gains on cash flow
hedges - - - - 23.9 - - 23.9
Transfers to the
income statement
on cash flow
hedges - - - - 17.0 - - 17.0
Tax on hedging
reserve
movements - - - - (10.2) - - (10.2)
Other
comprehensive
expense of
associates - - - - - - (0.8) (0.8)
Property
revaluation - - 105.8 - - - - 105.8
Property
impairment - - (34.3) - - - - (34.3)
Deferred tax on
properties - - (14.7) - - - - (14.7)
Total
comprehensive
income - - 56.8 - 30.7 - 153.9 241.4
------------------- --------- --------- ------------ ------------ --------- -------- ---------------- --------
Share-based
payments - - - - - - 0.5 0.5
Sale of own shares - - - - - 0.2 (0.2) -
Transfer disposals
to retained
earnings - - (0.2) - - - 0.2 -
Changes in equity
of associates - - - - - - (0.2) (0.2)
------------------- --------- --------- ------------ ------------ --------- -------- ---------------- --------
Total transactions
with owners - - (0.2) - - 0.2 0.3 0.3
------------------- --------- --------- ------------ ------------ --------- -------- ---------------- --------
At 1 October 2022 48.7 334.0 417.1 6.8 (50.7) (110.9) 3.1 648.1
------------------- --------- --------- ------------ ------------ --------- -------- ---------------- --------
NOTES
For the 52 weeks ended 30 September 2023
1 Accounting policies
The Group's principal accounting policies are set out below:
Basis of preparation
These consolidated financial statements for the 52 weeks ended
30 September 2023 (2022: 52 weeks ended 1 October 2022) have been
prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted within the UK and in accordance with
the requirements of the Companies Act 2006. The financial
statements have been prepared under the historical cost convention
as modified by the revaluation of certain items, principally
effective freehold land and buildings, certain financial
instruments, retirement benefits and share-based payments, as
explained below.
Going concern
The cost-of-living crisis and inflationary pressures has led to
lower underlying(1) profit and operating cashflows than would
otherwise have resulted had these macroeconomic conditions not
existed.
The Group's sources of funding include its securitised debt, a
GBP300.0 million bank facility available until January 2025 (of
which GBP229.0 million was drawn at 30 September 2023), a GBP40.0
million private placement in place until January 2025, and a GBP5.0
million seasonal overdraft facility which extends to GBP20.0
million from 25 January to 6 May and 1 July to 12 August each year
(of which GBPnil was drawn at 30 September 2023).
There are two covenants associated with the Group's securitised
debt - free cash flow to debt service coverage ratio (FCF DSCR) and
Net Worth. The FCF DSCR is a measure of free cash flow to debt
service for the group headed by Marston's Pubs Parent Limited and
is required to be a minimum of 1.1 over both a two-quarter and
four-quarter period, and the Net Worth is derived from the net
assets of that group of companies.
There are three covenants associated with the Group's bank and
private placement borrowings for the non-securitised group of
companies - Debt Cover, Interest Cover and Liquidity. The Debt
Cover covenant is a measure of net borrowings to EBITDA which is a
maximum of 4.5 times from 30 September 2023, reducing to 4.0 times
from 29 June 2024. The Interest Cover covenant is a measure of
EBITDA to finance charges, which is a minimum of 1.5 times from 30
September 2023, rising on a stepped basis to 1.75 times from 30
December 2023 and 2.0 times from 29 June 2024. The Liquidity
covenant is a measure of headroom on the Group's bank and private
placement borrowings, which is a minimum of GBP35.0 million on the
last day of each fiscal month from 30 September 2023, increasing to
GBP45.0 million from 27 July 2024.
The Directors have performed an assessment of going concern over
the period of 12 months from the date of signing these financial
statements, to assess the adequacy of the Group's financial
resources. In performing their assessment, the Directors considered
the Group's financial position and exposure to principal risks,
including the cost-of-living crisis and inflationary pressure. The
Group's base case forecasts assume moderate sales price increases
and operational costs (that have not already been secured) rising
broadly in line with inflation. On the Group's base case forecast,
no covenants are forecast to be breached within the next 12 months
and the Group has adequate liquidity throughout the going concern
period.
The Directors have also considered a severe but plausible
downside scenario, incorporating a 5% reduction in sales volume as
a consequence of the cost-of-living crisis and current inflationary
pressures along with a reasonably plausible increase in costs
compared to the base case forecast. The conclusion of this
assessment was that the Directors are satisfied that the Group has
adequate liquidity to withstand such a severe but plausible
downside scenario. However, in this severe but plausible downside
scenario only, even after factoring in mitigations under the
control of management such as reductions in discretionary spend,
the Group would be required to obtain covenant amendments in
respect of its Interest Cover covenant associated with the Group's
bank and private placement borrowings in the outer quarters of the
going concern period. In such a severe but plausible downside, the
Group has a number of options. The Group would be very confident in
leveraging the supportive relationship it has with its lenders and
renegotiate the terms of its financing in advance of any covenant
amendment being required or the Group would seek covenant
amendments. Whilst there is no certainty since it requires the
agreement of its lenders, based on covenant amendments previously
secured, the successful amend and extend to the RCF and private
placement during the period and the continued positive
relationships, the Directors believe they will be able to secure
any such amendments required.
Considering the above, the Directors are satisfied that the
Group and the Company have adequate resources to continue in
operational existence for the foreseeable future, being at least 12
months from the date of signing these financial statements. For
this reason, the Directors continue to adopt the going concern
basis of accounting in preparing these financial statements.
However, a material uncertainty exists as a result of the potential
requirement to obtain covenant amendments in the severe but
plausible downside scenario, which may cast significant doubt on
the Group's and the Company's ability to continue as a going
concern and, therefore, to continue realising their assets and
discharging their liabilities in the normal course of business. The
financial statements do not include any adjustments that would
result from the basis of preparation being inappropriate.
2 Segment reporting
The Group is considered to have one operating segment under IFRS
8 'Operating Segments' and therefore no disclosures are presented.
This is in line with the reporting to the chief operating decision
maker and the operational structure of the business. The measure of
profit or loss reviewed by the chief operating decision maker is
underlying(1) profit/(loss) before tax.
Geographical areas
All of the Group's revenue is generated in the UK. All of the
Group's assets are located in the UK.
3 NON-Underlying (1) items
2023 2022
GBPm GBPm
------------------------------------------------------------ ----- --------
Non-underlying (1) operating items
Impairment/(impairment reversal) of freehold and leasehold
properties 31.2 (21.6)
Special discretionary pension increase 0.5 -
Reorganisation, restructuring and relocation costs 2.9 -
VAT claims - (5.1)
34.6 (26.7)
------------------------------------------------------------ ----- --------
Non-underlying (1) non-operating items
Interest on VAT claims - (0.5)
Interest rate swap movements 21.6 (109.2)
Contingent consideration fair value movement - 0.7
21.6 (109.0)
------------------------------------------------------------ ----- --------
Total non-underlying (1) items 56.2 (135.7)
------------------------------------------------------------ ----- --------
Impairment/(impairment reversal) of freehold and leasehold
properties
At 2 July 2023 the Group's effective freehold properties were
revalued by independent chartered surveyors on an open market value
basis. The Group also undertook an impairment review of its
leasehold properties in the current and prior period.
The revaluation and impairment adjustments in respect of the
above were recognised in the revaluation reserve or income
statement as appropriate. The amount recognised in the income
statement comprises:
2023 2022
GBPm GBPm
----------------------------------------------------- ------- -------
Impairment of property, plant and equipment 70.9 48.2
Reversal of past impairment of property, plant, and
equipment (40.0) (69.8)
Impairment of assets held for sale - 0.3
Reversal of past impairment of assets held for sale - (0.6)
Valuation fees 0.3 0.3
31.2 (21.6)
----------------------------------------------------- ------- -------
Special discretionary pension increase
A past service cost of GBP0.5 million (2022: GBPnil) arose in
the current period as a result of a one-off, and discretionary,
increase to pensions in payment for members of the Marston's PLC
Pension and Life Assurance Scheme.
Reorganisation, restructuring and relocation costs
During the current period the Group commenced the implementation
of an operational programme to simplify the business and drive
efficiencies. The cost of implementing this programme in the
current period was GBP2.9 million (2022: GBPnil).
VAT claims
The Group submitted claims to HM Revenue & Customs (HMRC) in
respect of the VAT treatment of gaming machines from 1 January 2006
to 31 January 2013. Following detailed information gathering to
support the claims made the Group recognised the estimated amounts
receivable, including interest, in the prior period. The claims
were settled by HMRC in the current period.
Interest rate swap movements
The Group's interest rate swaps are revalued to fair value at
each balance sheet date. For interest rate swaps which were
designated as part of a hedging relationship a loss of GBP3.0
million (2022: gain of GBP23.9 million) has been recognised in the
hedging reserve in respect of the effective portion of the fair
value movement and GBP2.1 million (2022: GBP6.2 million) has been
reclassified from the hedging reserve to underlying(1) finance
costs in the income statement in respect of the cash paid in the
period. A loss of GBP0.6 million (2022: GBP1.3 million) in respect
of the ineffective portion of the fair value movement has been
recognised within non-underlying(1) items in the income statement.
An amount representing the cash paid of GBP1.4 million (2022:
GBP1.5 million) has subsequently been transferred from
non-underlying(1) items to underlying(1) finance costs to ensure
that underlying(1) finance costs reflect the resulting fixed rate
paid on the associated debt. As such there is an overall gain of
GBP0.8 million (2022: GBP0.2 million) recognised within
non-underlying(1) items. In addition, GBP9.3 million (2022: GBP10.8
million) of the balance remaining in the hedging reserve in respect
of discontinued cash flow hedges has been reclassified to the
income statement within non-underlying(1) items.
For interest rate swaps which were not designated as part of a
hedging relationship a loss of GBP9.5 million (2022: gain of
GBP111.2 million) in respect of the fair value movement has been
recognised within non-underlying(1) items in the income statement.
An amount representing the cash received of GBP3.6 million (2022:
cash paid of GBP8.6 million) has subsequently been transferred from
non-underlying(1) items to underlying(1) finance costs to ensure
that underlying(1) finance costs reflect the resulting fixed rate
paid on the associated debt. As such there is an overall loss of
GBP13.1 million (2022: gain of GBP119.8 million) recognised within
non-underlying(1) items, which is equal to the change in the
carrying value of the interest rate swaps in the period.
Contingent consideration fair value movement
The contingent consideration on the disposal of Marston's Beer
Company Limited was initially recognised at its fair value at the
date of disposal and was subsequently remeasured at its fair value
at 2 October 2021 and the date of settlement during the prior
period. The movement in fair value was recognised within
non-underlying(1) items in the prior period.
Impact of taxation
The current tax charge relating to the above non-underlying(1)
items amounts to GBPnil (2022: GBP1.4 million). The deferred tax
credit relating to the above non-underlying(1) items amounts to
GBP14.9 million (2022: charge of GBP24.6 million).
4 Taxation
2023 2022
Income statement GBPm GBPm
Current tax
Current period 0.1 0.2
Adjustments in respect of prior periods (0.3) (0.3)
Charge in respect of tax on non-underlying(1) items - 1.4
(0.2) 1.3
----------------------------------------------------------- ------- ------
Deferred tax
Current period 5.5 0.1
Adjustments in respect of prior periods (1.8) 0.2
(Credit)/charge in respect of tax on non-underlying(1)
items (14.9) 24.6
(11.2) 24.9
----------------------------------------------------------- ------- ------
Taxation (credit)/charge reported in the income statement (11.4) 26.2
----------------------------------------------------------- ------- ------
2023 2022
Statement of comprehensive income GBPm GBPm
Remeasurement of retirement benefits (2.3) 5.8
Impairment and revaluation of properties 2.5 14.7
Hedging reserve movements 2.1 10.2
Taxation charge reported in the statement of comprehensive
income 2.3 30.7
------------------------------------------------------------ ------ -----
The actual tax rate for the period is higher (2022: lower) than
the standard rate of corporation tax of 22% (2022: 19%). The
differences are explained below:
2023 2022
Tax reconciliation GBPm GBPm
---------------------------------------------------------- ------- ------
(Loss)/profit before tax (20.7) 163.4
---------------------------------------------------------- ------- ------
(Loss)/profit before tax multiplied by the corporation
tax rate of 22% (2022: 19%) (4.6) 31.0
Effect of:
Adjustments in respect of prior periods (2.1) (0.1)
Change in deferred tax asset not recognised 1.0 (8.5)
Net deferred tax credit in respect of land and buildings (1.2) (1.8)
Costs not deductible for tax purposes 0.1 -
Share of income of associate (2.2) (0.6)
Other amounts on which tax relief is available (1.2) (2.4)
Difference between deferred and current tax rates (1.2) 8.6
Taxation (credit)/charge (11.4) 26.2
---------------------------------------------------------- ------- ------
The March 2021 Budget announced that the main rate of
corporation tax would change from 19% to 25% with effect from 1
April 2023. As such the Group's results for the current period have
been taxed at an effective rate of 22%. This change was
substantively enacted on 24 May 2021. This has increased the
Group's current tax charge accordingly. The deferred tax assets and
liabilities at 30 September 2023 have been calculated at 25% (2022:
25%).
The Group is within the Pillar Two income taxes legislation,
which is effective for financial periods beginning on or after 31
December 2023. The Group is currently assessing the impact of the
legislation on its future financial performance and although it
does not anticipate that the legislation will have a material
impact on the Group's results or financial position, this cannot be
confirmed until the assessment has been completed.
5 Ordinary dividends on equity shares
No dividends were paid during the current or prior period. A
final dividend for 2023 has not been proposed.
6 Earnings per ordinary share
Basic earnings/(loss) per share are calculated by dividing the
profit/(loss) attributable to equity shareholders by the weighted
average number of ordinary shares in issue during the period,
excluding treasury shares and those held on trust for employee
share schemes.
For diluted earnings/(loss) per share, the weighted average
number of ordinary shares in issue is adjusted to assume conversion
of all dilutive potential ordinary shares. These represent share
options granted to employees where the exercise price is less than
the weighted average market price of the Company's shares during
the period.
Underlying(1) earnings/(loss) per share figures are presented to
exclude the effect of non-underlying(1) items. The Directors
consider that the supplementary figures are a useful indicator of
performance.
2023 2022
------------------- -----------------------
Per
share Per share
Earnings amount Earnings amount
GBPm p GBPm p
-------------------------------- --------- -------- ----------- ----------
Basic (loss)/earnings per
share (9.3) (1.5) 137.2 21.7
Diluted (loss)/earnings
per share (9.3) (1.5) 137.2 21.4
Underlying(1) earnings
per share figures
Basic underlying(1) earnings
per share 32.0 5.1 27.5 4.3
Diluted underlying(1) earnings
per share 32.0 5.1 27.5 4.3
---------------------------------- --------- -------- ----------- ----------
2023 2022
m m
------------------------------------------- ------ ------
Basic weighted average number of shares 633.3 633.1
Dilutive potential ordinary shares - 9.4
------------------------------------------- ------ ------
Diluted weighted average number of shares 633.3 642.5
------------------------------------------- ------ ------
In the current period in accordance with IAS 33 'Earnings per
Share' the potential ordinary shares were not dilutive as their
inclusion would reduce the loss per share.
7 Net debt
2023 2022
Analysis of net debt GBPm GBPm
--------------------------- ---------- ----------
Cash and cash equivalents
Cash at bank and in
hand 26.5 27.7
26.5 27.7
--------------------------- ---------- ----------
Financial assets
Other cash deposits 3.1 3.0
3.1 3.0
Debt due within one
year
Bank borrowings 2.6 0.7
Securitised debt (41.1) (39.0)
Lease liabilities (17.8) (11.2)
Other lease related
borrowings 0.4 0.4
Other borrowings (10.0) (15.0)
(65.9) (64.1)
--------------------------- ---------- ----------
Debt due after one
year
Bank borrowings (228.2) (214.6)
Securitised debt (560.2) (601.3)
Lease liabilities (362.6) (366.6)
Other lease related
borrowings (338.4) (338.0)
Other borrowings (40.0) (40.0)
Preference shares (0.1) (0.1)
------------------------------- ---------- ----------
(1,529.5) (1,560.6)
Net debt (1,565.8) (1,594.0)
------------------------------- ---------- ----------
Other cash deposits comprises deposits securing letters of
credit for reinsurance contracts. Included within cash and cash
equivalents is an amount of GBP5.6 million (2022: GBP5.6 million)
relating to collateral held in the form of cash deposits. These
amounts are both considered to be restricted cash. In addition, any
other cash held in connection with the securitised business is
governed by certain restrictions under the covenants associated
with the securitisation.
2023 2022
Reconciliation of net cash flow to movement in net
debt GBPm GBPm
----------------------------------------------------- ---------- ----------
Decrease in cash and cash equivalents in the period (1.2) (4.5)
Increase/(decrease) in other cash deposits 0.1 (0.2)
Cash outflow from movement in debt 35.5 30.9
----------------------------------------------------- ---------- ----------
Net cash inflow 34.4 26.2
Non-cash movements and deferred issue costs (6.2) (16.3)
Movement in net debt in the period 28.2 9.9
Net debt at beginning of the period (1,594.0) (1,603.9)
Net debt at end of the period (1,565.8) (1,594.0)
----------------------------------------------------- ---------- ----------
2023 2022
GBPm GBPm
-------------------------------------- ---------- ----------
Net debt excluding lease liabilities (1,185.4) (1,216.2)
Lease liabilities (380.4) (377.8)
Net debt (1,565.8) (1,594.0)
-------------------------------------- ---------- ----------
Changes in liabilities arising from financing activities are as
follows:
2023 2022
------------------------------------------- -------------------------------------------
Derivative Total Derivative Total
financial financing financial financing
Borrowings instruments liabilities Borrowings instruments liabilities
GBPm GBPm GBPm GBPm GBPm GBPm
----------------------- ------------- ------------- ------------- ------------- ------------- -------------
At beginning of the
period (1,624.7) (20.4) (1,645.1) (1,639.3) (170.5) (1,809.8)
Cash flow 35.5 (0.1) 35.4 30.9 16.3 47.2
Changes in fair value - (13.1) (13.1) - 133.8 133.8
Other changes (6.2) - (6.2) (16.3) - (16.3)
At end of the period (1,595.4) (33.6) (1,629.0) (1,624.7) (20.4) (1,645.1)
----------------------- ------------- ------------- ------------- ------------- ------------- -------------
Notes:
(a) The financial information contained in this preliminary
announcement does not constitute the Group's statutory accounts
within the meaning of section 434 of the Companies Act 2006. The
financial information has been extracted from the statutory
accounts of the Group for the 52 weeks ended 30 September 2023,
which will be filed with the Registrar of Companies in due course.
The statutory accounts for the 52 weeks ended 1 October 2022 have
been delivered to the Registrar of Companies. The auditor has
reported on those accounts; their reports were (i) unqualified,
(ii) for the 52 weeks ended 30 September 2023 included reference to
a matter to which the auditor drew attention by way of emphasis
without qualifying their report in respect of a material
uncertainty in respect of going concern (unchanged from 2022), and
(iii) did not contain a statement under section 498 (2) or (3) of
the Companies Act 2006.
(b) The Annual Report and Accounts for the 52 weeks ended 30
September 2023 will be posted to shareholders on 20 December 2023.
The Annual Report and Accounts will be available to be downloaded
from the Marston's PLC website: www.marstonspubs.co.uk.
Alternatively, copies will be obtainable from the Group General
Counsel & Company Secretary, Marston's PLC, St Johns House, St
Johns Square, Wolverhampton, WV2 4BH.
ALTERNATIVE PERFORMANCE MEASURES (APMs)
In addition to statutory financial measures, these full year
results include financial measures that are not defined or
recognised under IFRS or FRS 102, all of which the Group considers
to be alternative performance measures (APMs). APMs should not be
regarded as a complete picture of the Group's financial
performance, which the Group presents within its total statutory
results.
The APMs are used by the Board and management to analyse
operational and financial performance and track the Group's
progress against long-term strategic plans. The APMs provide
additional information to investors and other external shareholders
to enhance their understanding of the Group's results and
facilitate comparison with industry peers.
Capital expenditure (CAPEX)
Capital expenditure is the cost of acquiring and maintaining
fixed assets, comprising both maintenance and investment
expenditure. It is a measure by which the Group and interested
stakeholders assess the level of investment in the estate to
maintain the Group's profit. Capital expenditure is the purchase of
property, plant and equipment and intangible assets as presented
directly within the Group cash flow statement.
Free cash flow (FCF)
FCF represents the net cash inflow from operating activities,
adjusted for cash movements on interest and debt issue costs paid.
The Group uses FCF to determine bonus outcomes for Directors'
remuneration.
2023 2022
--------------------------------------
GBPm GBPm
-------------------------------------- ------- -------
Net cash inflow from operating
activities 141.2 134.0
Interest received 1.8 0.9
Interest paid (93.1) (79.4)
Arrangement costs of bank facilities (4.0) -
-------------------------------------- ------- -------
Free cash flow 45.9 55.5
----------------------------------------- ------- -------
Like-for-like (LFL) sales
LFL sales reflect sales for all pubs that were trading in the
two periods being compared expressed as a percentage, excluding
those pubs that have changed format between tenanted and leased and
the rest of the estate. LFL sales does not exclude those pubs that
have changed format between managed and franchised.
The inclusion of a pub within LFL sales is considered on a daily
basis and a pub is included within LFL sales for only the days
within the trading period where it meets the definition of LFL. A
site is considered fully open for trading if it generated more than
GBP100 per day. If a site is acquired or disposed of during the two
periods being compared, LFL sales includes the days where the site
is fully open for trading in both periods.
LFL sales is a widely used industry measure which provides
better insight into the trading performance of the Group as total
revenue is impacted by acquisitions, disposals, and investment into
the estate through conversions and refurbishments.
52 weeks to 52 weeks to LFL
30 September 1 October
2023 2022
----------------------
GBPm GBPm %
---------------------- -------------- ------------ -----
LFL retail sales 760.9 691.1 10.1
Non-LFL retail sales 45.2 43.0
------------------------ -------------- ------------ -----
Retail sales 806.1 734.1 9.8
Non-EPOS outlet
sales 26.7 23.1
------------------------ -------------- ------------ -----
Outlet sales 832.8 757.2 10.0
------------------------ -------------- ------------ -----
9 weeks to 9 weeks to LFL
2 December 3 December
2023 2022
------------------
GBPm GBPm %
------------------ ------------ ------------ ----
LFL retail sales 125.2 116.6 7.4
Non-LFL retail
sales 6.3 4.4
-------------------- ------------ ------------ ----
Retail sales 131.5 121.0 8.7
-------------------- ------------ ------------ ----
Net asset value (NAV) per share
NAV per share is the value of net assets of the Group, divided
by the number of shares in issue excluding own shares held.
2023 2022
------------------------------ ------ ------
Net assets (GBPm) 640.1 648.1
Number of shares outstanding 633.5 633.3
--------------------------------- ------ ------
NAV per share 1.01 1.02
--------------------------------- ------ ------
Net cash flow (NCF)
NCF is the increase/decrease in cash and cash equivalents in the
period, adjusted for movements in other cash deposits and the cash
movement in debt. NCF is used by the Group to determine targets for
LTIP awards.
2023 2022
------------------------------
GBPm GBPm
------------------------------ ------ ------
Decrease in cash and cash
equivalents (1.2) (4.5)
Increase/(decrease) in other
cash deposits 0.1 (0.2)
Cash outflow from movement
in debt 35.5 30.9
--------------------------------- ------ ------
Net cash flow 34.4 26.2
--------------------------------- ------ ------
Net debt
Net debt is defined as the sum of cash and cash equivalents and
other cash deposits, less total borrowings, at the balance sheet
date. Net debt is presented excluding lease liabilities as the
target for the Group's 'Back to a billion' corporate goal is to
reduce net debt excluding lease liabilities to below GBP1
billion.
2023 2022
--------------------------------------------
GBPm GBPm
-------------------------------------------- ---------- ----------
Decrease in cash and cash equivalents (1.2) (4.5)
Increase/(decrease) in other cash deposits 0.1 (0.2)
Cash outflow from movement in debt
excluding lease liabilities 30.4 22.4
----------------------------------------------- ---------- ----------
Net cash inflow 29.3 17.7
Non-cash movements and deferred issue
costs 1.5 (1.6)
----------------------------------------------- ---------- ----------
Movement in net debt excluding lease
liabilities in the period 30.8 16.1
Net debt excluding lease liabilities
at beginning of the period (1,216.2) (1,232.3)
----------------------------------------------- ---------- ----------
Net debt excluding lease liabilities
at end of the period (1,185.4) (1,216.2)
----------------------------------------------- ---------- ----------
Non-underlying
Non-underlying items are presented separately on the face of the
income statement and are defined as those items of income and
expense which, because of the materiality, nature and/or expected
infrequency of the events giving rise to them, merit separate
presentation to enable users of the financial statements to better
understand elements of financial performance in the period, so as
to facilitate comparison with future and prior periods. As
management of the freehold and leasehold property estate is an
essential and significant area of the business, the threshold for
classification of property related items as non-underlying is
higher than other items.
Underlying results should not be regarded as a complete picture
of the Group's financial performance as they exclude specific items
of income and expense. The full financial performance of the Group
is presented within its total statutory results.
Operating profit/(loss)
Operating profit/(loss) is revenue less net operating expenses,
plus the share of results from associates. Operating profit/(loss)
is presented directly on the Group income statement. It is not
defined in IFRS however it is a generally accepted profit
measure.
2023 2022
---------------------------------------------------
GBPm GBPm
--------------------------------------------------- ------ -------
Operating profit 100.1 145.4
Income from associates (9.9) (3.3)
--------------------------------------------------- ------ -------
Pub operating profit 90.2 142.1
Non-underlying operating items 34.6 (26.7)
--------------------------------------------------- ------ -------
Underlying operating profit excluding income from
associates ('pub operating profit') 124.8 115.4
Revenue 872.3 799.6
--------------------------------------------------- ------ -------
Underlying operating margin 14.3% 14.4%
--------------------------------------------------- ------ -------
26 weeks to 26 weeks 52 weeks
1 April to to
2023 30 September 30 September
2023 2023
-----------------------------------------
GBPm GBPm GBPm
----------------------------------------- ------------ -------------- --------------
Operating profit 45.3 54.8 100.1
Income from associates (2.2) (7.7) (9.9)
Non-underlying operating items - 34.6 34.6
----------------------------------------- ------------ -------------- --------------
Underlying operating profit excluding
income from associates ('pub operating
profit') 43.1 81.7 124.8
Revenue 407.0 465.3 872.3
----------------------------------------- ------------ -------------- --------------
Underlying operating margin 10.6% 17.6% 14.3%
----------------------------------------- ------------ -------------- --------------
Outlet sales
Outlet sales represents all revenue that is generated at our
managed and franchised pubs, which includes food, drink,
accommodation, and gaming machine income.
Profit/(loss) before tax
Profit/(loss) before tax is profit for the period presented
before the tax charge/credit for the period. Profit/(loss) before
tax is presented directly on the Group income statement. It is not
defined in IFRS, however is a generally accepted profit
measure.
Retail sales
Retail sales represents all revenue that is generated through
the Group's EPOS (electronic point of sale) till systems in our
managed and franchised pubs, which includes food, drink, and
accommodation sales.
Underlying earnings before interest, tax, depreciation, and
amortisation EBITDA
Underlying EBITDA is the earnings before interest, tax,
depreciation, amortisation and non-underlying items. The Directors
regularly use underlying EBITDA as a key performance measure in
assessing the Group's profitability. The measure is considered
useful to users of the financial statements as it is a widely used
industry measure which allows comparison to peers, comparison of
performance across periods, and is used to determine bonus outcomes
for Directors' remuneration.
2023 2022
----------------------------------------------------
GBPm GBPm
---------------------------------------------------- ------ -------
Operating profit 100.1 145.4
Non-underlying operating items 34.6 (26.7)
Depreciation and amortisation 45.5 44.2
------------------------------------------------------- ------ -------
Underlying EBITDA including income from associates 180.2 162.9
Income from associates (9.9) (3.3)
------------------------------------------------------- ------ -------
Underlying EBITDA excluding income from associates 170.3 159.6
------------------------------------------------------- ------ -------
Wholesale sales
Wholesale sales represents revenue generated from our tenanted
and leased pubs.
Year
The current year refers to the 52-week period ended 30 September
2023. The prior year refers to the 52-week period ended 1 October
2022.
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END
FR FSFFWLEDSEDE
(END) Dow Jones Newswires
December 05, 2023 02:00 ET (07:00 GMT)
Grafico Azioni Marston's (LSE:MARS)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni Marston's (LSE:MARS)
Storico
Da Apr 2023 a Apr 2024
