- Like-for-like sales 3% ahead of pre-pandemic
- Encouraging trading ahead of World Cup
- Energy costs hedged
Pubs and hotels group Marston’s (MARS) said like-for-like sales grew 3% in the last 10-weeks to 1 October, 3% ahead of 2019 and 4% up on last year, driving a 4% increase in the shares to 37.4p.
The company highlighted continuing recovery from the pandemic with ‘encouraging’ customer demand while electricity prices have been hedged for the winter and gas prices have been fixed until March 2025.
Taking a glass half-full attitude, CEO Andrew Andrea commented: ‘Looking forward, we are primed to maximise the trading opportunities provided by the forthcoming World Cup and first restriction-free Christmas in three years. Marston’s is in good shape and well positioned to navigate the future.’
Marston’s update was in sharp contrast to the downbeat tone given by rivals Mitchell’s & Butlers (MAB) and JD Wetherspoon (JDW). The former warned of squeezed margins while the latter doesn’t seem to be benefitting from trading down in the current challenging cost backdrop.
Marston’s finished the period with net debt £16 million below last year at £1.22 billion. The firm’s borrowing is mainly long term and 86% backed by property values.
The company had £65 million of headroom against its £280 million banking facility and £10 million of cash.
EXPERT VIEW
Greg Johnson, leisure analyst at Shore Capital, commented: ‘Looking into FY23F, our starting position is for a further recovery in profitability, reflecting weak comparatives in H1, continued investment in the estate, with cost pressures (bar energy) broadly offset by pricing and cost initiatives.
‘At this stage, we forecast PBT of £53 million (EPS: 6.9p), which we believe is broadly consistent with annualising the second half performance (seasonally adjusted) and a positive contribution (circa £10 million) from CMBC (Carlsberg Marston’s Brewing Company).’
