Marston’s confident despite £4m weekly cash burn

Marston’s, the Wolverhampton brewer and pubco says it is burning through between £3-4m of cash while its pubs are shut.

In a trading update this morning (January 8), the firm said that despite its sales dropping to £54m in the 13 weeks to January 2, it remains optimistic for the future and believes that consumer demand will be “strong” when lockdown restrictions are lifted.

The joint venture between Carlsberg UK and Marston’s completed on 30 October 2020. The company says it received initial proceeds of £233m which were used to reduce debt. The profit on disposal of Marston’s Beer company into the joint venture is estimated to be around £280m and the spot value of the contingent payment to be received in October 2021 is approximately £20m.

Ralph Findlay, chief executive of Marston’s, said: “The pub sector has been closed for much of the last nine months and remains in a very difficult position. Regrettably there have been casualties across the sector and it is vital that the Government reviews urgently the opportunity to continue to support pubs as we reopen the economy in the coming weeks. Pubs are viable businesses which are part of the social fabric of Britain and which make a major contribution to the economy and the communities in which they serve. It is vital that they not only survive the short-term crisis but are supported in order to recover and flourish. Extending the business rates holiday and VAT cut for the rest of this year is a minimum requirement.

“Despite these challenges, Marston’s has a significantly strengthened balance sheet following the creation of the joint venture with Carlsberg and the financial headroom to weather the extended period of current trading restrictions. With the roll out of the vaccine programme now underway nationwide, we remain well positioned to rebuild trading momentum once restrictions are lifted, as well as to leverage potential market opportunities open to us. We have a clear strategy in place which leaves us confident for the future of our business over the medium term.”