Pubs and brewing group Marston’s (MARS) reported a £40 million impact from coronavirus, which reduced interim pre-tax profit to £9.4 million for the period ended 28 March 2020, sending the shares 6% lower to 61p.

At the end of February revenues were broadly in-line with the prior year, but the closing of the estate in mid-March resulted in around £40 million of lost revenues.


Consequently, Marston’s total first-half revenues fell 8% to £510.5 million and underlying operating margins were 11.3%, around 2% lower. Like-for-like sales were 1% lower while beer volumes were in-line with expectations.

Despite traditionally weaker first-half cash flow and the impact from coronavirus, net debt improved by £20 million to £1.4 billion, ahead of Shore Capital’s expectations. The sale of 168 pubs contributed £61 million while net cash flow increased by up to £55 million.

Chief executive Ralph Findley commented, ‘our immediate priority is to prepare our pubs to reopen on 4 July.  Whilst there is short term uncertainty as the sector emerges from lockdown, we are focussed on offering a great guest experience, synonymous with Marston's hospitality, to welcome our customers back into our pubs within a safe trading environment.’

Previously announced actions, including reduced capital expenditures and salaries for the 7% of employees not on the government’s furlough scheme has reduced Marston’s monthly cash burn to around £10 million a month.

Cash flows have been helped by off-trade beer volumes which have increased 55% since the end of March.


Post period end the company merged its beer business with the UK beer assets of Danish brewer Carlsberg, retaining a 40% stake of the enlarged entity and receiving £273 million in cash.

The transaction will significantly reduce the group’s debts while providing scale benefits for the combined beer entity. It also crystallises the group’s beer assets with Shore Capital estimating the value of its 40% stake at £312 million or around 50 pence per share.

The deal was approved by shareholders on 25 June and is subject to clearance by the competition authorities, expected in the third quarter.


Marston’s said it has made comprehensive plans to reopen safely within government guidance allowing pubs to trade ‘efficiently and profitably’ from 4 July.

However, it also acknowledges the trajectory of both revenue and earnings will be uncertain during the initial reopening phase.

It plans to open 85%-to-90% of pubs which will operate with appropriately spaced tables, disposable menus, hand sanitisers and markers on the floor to help customers navigate the space.

Increased spacing will result in capacity running around 60% of normal trading.

With around 90% of the estate having a garden or outdoor space, and mainly situated outside of busy town centres, Marston’s is hopeful customers will return.

As previously indicated the board will not be recommending the payment of dividends in the current financial year to end of September.


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Issue Date: 26 Jun 2020