Pub chain Marston’s sinks to a loss
Pub chain Marston’s said today it made a loss of £20m in the last year, compared to a profit of £54.3m in 2018.
The brewer said revenue for the year to 28 September grew to £1.174bn, from £1.141bn in 2018.
It said profit before tax on an underlying basis slipped to £101m from £104m, but on a statutory basis it posted a £20m loss.
Read more: Marston’s sells off 137 pubs for £45m as it looks to slash debt pile
The company blamed “non-cash impact of asset impairment and swap mark-to-market movements” for the loss.
Market analyst at CMC Markets David Madden said: “The firm saw costs associated with interest rate swaps jump by over £48m, and that is what pushed the firm into the red. It is worth noting that operating expenses rose by 5.9 per cent, so the interest rate product can’t be blamed for everything.”
Marston’s said like-for-like sales growth was up 0.8 per cent.
The company’s net debt was £1.399m, in line with expectations.
It said it was ahead of schedule in its plan to cut £200m from its debt pile in 2020-2023.
Earlier this month Marston’s sold 137 pubs for £45m to Admiral Taverns as part of its debt reduction drive.
Shares rose nearly one per cent to 128p this morning.
Read more: Marston’s forecasts lower profit on food sales slump
Chief executive Ralph Findlay said: “Our principal focus remains to reduce our net debt by £200 million by 2023 – or earlier – and the measures we are taking now will result in a high quality business which is cash generative after dividends and capital expenditure.
“Trading is on track for the initial weeks of the current year and we are well prepared for the all-important Christmas and New Year period.”
Paul Ruddy, leisure analyst at Goodbody, said the chain “continues to face the dual headwinds of increasing costs and weak consumer spending across the sector.
“The company has re-confirmed its commitment to dispose of non-core assets as part of its plan to reduce debt by £200m by 2023 or earlier.
“Looking ahead, our view remains cautious given it will be difficult to grow profits in the coming year and net debt remains high”