Pub chain Marston’s has posted a strong first half of the financial year off the back of food and drink sales as it looks ahead to the bumper summer months filled with sport, including the Euros.
The outlet which operates 1,395 pubs across the country told markets this morning it had posted an increase in revenue and profit for the 26 weeks up to 30 March, as sales outperformed the market.
Underlying revenue increased from £407m to £428.1m while profit went up from £43m to £52.7m.
The hospitality sector, which has struggled to deal with what has been branded a “cost of living perfect storm”, welcomed a turn in the British summer as it looks to capitalise on the months ahead.
It said this was driven by an increase in like-for-like sales, which went up by 7.3 per cent in the period, while pubs had a 22 per cent uplift in operating profit.
Marston’s also said it has reduced its debt and managed costs well as it looks towards a promising second half. During a summer of sport, millions of Brits will watch the Euros and Olympics in watering holes.
The chain did, however, make a statutory loss before tax of £43.5m, up from £38.1m in the same period last year.
It attributed this to “two non-cash items: the increase in liabilities from interest rate swaps of £25.8m, together with a one-off charge of £16m in respect of CMBC’s ale brand impairment and onerous contract provision”.
Chief executive Justin Platt said: “A positive first half, Marston’s has delivered strong like-for-like sales growth of 7.3 per cent outperforming the market and achieving an impressive 22 per cent uplift in pub operating profit. We have managed costs well and made further progress to reduce debt.”
“The outlook for the second half is encouraging. With a number of ‘must not miss’ major sporting events, our massively upgraded pub gardens and much-loved food menus, we expect our pubs to be very popular this summer.”
“Reflecting on my first few months with Marston’s, I am very excited by the potential that lies ahead. The UK Pub Market offers significant value-driving opportunities for those who can engage and deliver for their guests. With our high-quality estate and guest obsessed team we are well placed to capitalise and to deliver consistent, reliable cashflows that will drive value for our shareholders.”
Looking ahead, Marston’s said it wanted to build on “positive trading momentum” as it seeks to ride the “seasonality of trade which typically sees the majority of revenue, profit and cashflow generated in the second half of the year.”
It also said it would “drive efficiencies and remains confident of delivering at least £8m of cost efficiencies in-year. This will be principally achieved from reduced energy and labour costs”.
Marston’s also commented on job cuts in the chain, saying in the period just gone it had “commenced the implementation of an operational programme to simplify the business and drive efficiencies.
“The costs identified are one-off headcount related costs and this element of the programme is expected to be short term in nature and non-recurring.
“The cost of implementing this programme in the current period was £0.5m”, with £2.9m in the 26 weeks ended 30 September 2023.
As of 30 March 2024 £3.4m has been incurred as part of the “reorganisation, restructuring and relocation costs”.