Shares in pub group Marston’s (MARS) fell 4% to 67.2p as it reported a 30% drop in full-year revenues to £821 million and underlying operating profit 57% lower to £74 million, reflecting the 15 weeks of enforced closure during the first lockdown.

CREDIBLE PERFORMANCE

In the 13-weeks to 3 October like-for-like sales averaged 90% of the prior year, which was 7% better than the sector average according to CGA Peach tracker data.

This reflected the favourable positioning of the estate with 90% located in suburban areas with access to gardens and outside space.

This is a credible performance given that social distancing rules reduced capacity by around 30%.

‘WELL SET WHEN LOCKDOWN EASES’

Following the completion of the joint venture with Carlsberg UK in October, which valued the beer business at around £580 million, the company received £233 million of cash while retaining 40% of the business.

Synergies are expected to reach £40 million a year in the medium term.

Peel Hunt estimates that the company has £170 million headroom against the revolving credit facility and £110 million of unused liquidity facility on the bonds which provides total liquidity of £280 million, compared with £3 million-to-£4 million of weekly cash burn when all venues are closed.

Currently around half the estate trades in tier two territories and almost all of then remain open.

Shore Capital analyst Greg Johnson said, ‘Overall, a transformational year for Marston’s and the group appears well set for when lockdown restrictions are eventually relaxed.’

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Issue Date: 10 Dec 2020