Marston's Plc – Half-Year Results 2022

MARSTON'S PLC

 RESULTS FOR THE 26 WEEKS ENDED 2 APRIL 2022

CONTINUED STRATEGIC MOMENTUM, TRADING NORMALISED, SOLID BALANCE SHEET;

CLEAR GROWTH PLANS

Marston's, a leading UK operator of 1,482 pubs, today announces its Interim Results for the 26 weeks ended 2 April 2022.  The period under review, which commenced on 3 October 2021, included a period of disrupted trading in December due to the Omicron variant of COVID-19. 

Return to more normalised trading despite COVID disruption

·     H1 like-for-like sales 97% of 2019 despite restrictions over Christmas trading period

·     Brains estate performing well despite longevity of restrictions in Wales

·   Return to pub operating profit; £39.9 million (H1 2021: loss of £(57.2) million)

·   CMBC profitability impacted in H1, anticipate improvement in H2

Strong H1 cash generation; improving balance sheet

·     £30 million H1 cash inflow from operating activities; underlying net cash inflow (excluding one-offs) of £13 million. Further cash inflow anticipated in H2

·     Net asset value (NAV) improved by 7 pence per share since October 2021; disposals 35% ahead of net book value

·     Financial strategy on track to reduce net debt to below £1 billion by 2025

“Pubs to be proud of” underpinned by significant change management programme underway

·     Revitalised leadership group; 30% new to role including 5 external recruits

·     Clear plans to reposition pub estate into simplified segmental structure to generate strong returns: Community, Signature and Revere

o  10 conversions completed in H1; 8 planned for H2

·     Menu overhaul driving simplicity and efficiency without compromising guest satisfaction

·     Recruit, Reward, Retain: innovative people plans in challenging labour market

Well-positioned to meet challenging market conditions

·     Pubs historically resilient to challenging consumer environments

·     Current trading in line and stable, with like-for-like sales in the last 6 weeks slightly higher relative to 2019

·     Well-positioned, predominantly freehold pub estate with limited exposure to city centres

·     Managing inflationary challenges within our control

·     No compromise on guest experience: service, standards, product

·     Accelerated transition away from Two for One format, complete by October 2022 to improve returns

Financial Highlights

*Results from continuing operations

·     The financial performance for the period reflects the disruption to trading from the pandemic during the key Christmas trading period and through to January 2022

·     Solid balance sheet position with c. £90m of headroom (banking and cash facilities)

Commenting, Andrew Andrea, CEO said:

“We are pleased that since restrictions lifted trading has largely normalised enabling us to return to profitable trading, as well as focusing – and making considerable progress – on our strategic growth plans towards achieving £1 billion of sales.  We remain on track to reduce the Group's debt by the end of FY2022.

“We continue to evolve our estate to maximise returns and will have transitioned away from the value food segment, our Two for One brand, by the end of September.   Investment into our estate through conversions and refurbishments continued in H1, with a further eight projects scheduled in H2, targeting a minimum return of 30%.

“Whilst mindful of the challenges which every hospitality business currently faces, trading remains stable and we look forward to an uninterrupted summer.  We are navigating our way through cost increases, mitigating these as much as we can through cost efficiencies and pricing strategies, whilst welcoming customers back without compromise to the best Marston's guest experience.  The pub remains the home of affordable socialising and has continually proven its resilience in previous times of economic challenge.  We are operating a “business as usual” mindset, positioning the Group's balanced and well invested pub estate for future sustainable like-for-like growth over the medium to long term. “