Blurry vision puts pub group’s focus on debt reduction

Pub group Marston’s is renewing its focus on debt reduction as it worries about consumer spending, despite enjoying a particularly good Christmas.

Sales were up 5.7% over the Christmas fortnight, with margins keeping pace with a year earlier. Like-for-like pub sales for the longer period of the 16 weeks to January 19 were up 1.4%, while its brewing business increased volumes by 3.5%.

Chief executive Ralph Findlay said it was “a creditable performance in a challenging market” but warned about “increasingly uncertain times” as the business unveiled further steps it is taking to prepare in case of weaker consumer demand.

Marston’s is one of the country’s largest pub groups and employs 14,300 people across its estate of 1,545 pubs.

The group is reducing its new build investment to “around £25m” each year from 2020, and it will focus on sites that also have accommodation. The group currently has more 1,500 hotel bedrooms, and said it is seeing “the strongest returns” on pubs with accommodation.

It also plans to generate up to £90m by selling “non-core assets” between 2020 and 2023, and will be implementing other changes to improve its cash flow.

The Wolverhampton-headquartered pub group expects these measures to drive a £200m reduction in net debt, to £1.2bn, by 2023.

Findlay added: “We are confident of delivering further profitable growth this year, whilst focussing on our strategic priorities of generating cash and delivering our stated £0.2bn debt reduction target between 2020 and 2023.”