Pubs group Marston’s (MARS) said first quarter revenues to 2 January were materially disrupted due to lockdown restrictions and generated revenues of £54 million. The shares fell 1.2% to 73.5p on the news.
SPRINGTIME REOPENING
Considering recent government comments, the company said it expected its pubs to remain closed until the end of March at the earliest and for some of the previous restrictions to remain in place after reopening.
WELL FINANCED
Marston’s highlighted ‘significant liquidity’ following the completion of its joint venture with Carlsberg resulting in initial proceeds of £233 million and a contingent payment of £20 million.
At the period end the company had drawn down £104 million from its banking facilities net of cash which left it with headroom of £176 million. The £280 million facility runs until 2024.
It added that enough cash had been generated in the period to make scheduled repayments of £18 million under its securitisation programme which are due to be paid on 15 January.
Marston’s has a well invested freehold estate and has drawn down £10 million of its £120 million secured liquidity facility.
The company reiterated that weekly cash burn under full lockdown was between £3 million-to- £4 million before scheduled securitisation payments.
Around 97% of staff are on the furlough scheme and the company is receiving business rates relief which is due to end in April. Marston’s said it will also apply for recently announced government grants.
Chief executive Ralph Findlay is urging the government to extend the business rates relief and VAT cut until the end of the year. ‘It is vital that the Government reviews urgently the opportunity to continue to support pubs as we reopen the economy in the coming weeks’, he said.
POSITIONED FOR RECOVERY
Despite uncertainty around the timing of a full reopening the group’s predominantly suburban estate is well positioned to benefit from a bounce in consumer demand.
Shore Capital analyst Greg Johnson concurred saying, ‘We believe the group is well placed as and when the hospitality market reopens and continue its strategy to deleverage and improve trading metrics.’
