MARSTON'S PLC
PRELIMINARY RESULTS FOR THE 52 WEEKS ENDED 28 SEPTEMBER 2019
Improved operating cash flow, dividend maintained, debt reduction plans progressing well
Revenue growth in all trading segments, earnings momentum in drinks businesses
- Underlying profit growth in Taverns and Beer Company
- Statutory result principally reflects non-cash impact of asset impairment and swap mark-to-market movements
Sales growth in both pub segments
- LFL sales growth of 0.8% with growth in both wet-led and food pub segments
- Continued sales and earnings growth in Taverns impressive against strong comparatives
- Average profit per pub in line with last year reflecting balanced pub portfolio
- 8 new-build pub-restaurants, 15 wet-led pubs and 2 lodges opened in the year
Continued growth in Brewing against challenging comparatives
- Total volumes up 1%, strong growth in independent free trade
- 2.5 million composite barrels of beer delivered to one in four of UK pubs
- Completion of Charles Wells integration delivering £4 million targeted synergies
- New 15 year licence agreement signed with Shipyard
Operating cash flow +7%, fixed charge cover maintained; Net debt of £1,399 million in line with expectations
- Leverage before leasing of 4.7x, strong fixed charge cover maintained at 2.5x
- CROCCE up 0.1% to 10.4%
Final dividend maintained at 4.8p per share covered 1.8x by earnings
Ahead of schedule in progressing £200 million debt reduction targeted for 2020-2023:
- Targeting at least £70 million disposals of non-core pubs and assets in 2020, £50 million of which have already been exchanged or completed
- Further £40 million reduction in capital expenditure reflecting lower new-build spend
Commenting, Ralph Findlay, CEO said:
“We are making good progress with our debt reduction plans and are ahead of schedule in meeting the accelerated £70 million of disposal proceeds which we are targeting in the current year.
“We continue to benefit from Marston's balanced business model and our Taverns wet-led community pubs and brewing businesses have both once again outperformed the market, building on an outstanding year last year. We are employing a renewed focus on the proposition in our food-led pubs and remain well placed to benefit from reduced supply in this market segment, of which there is beginning to be some evidence.
“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.”