Marston’s doubles pub sell-off target

Pub group Marston’s has more than doubled its disposal target in a drive to reduce its borrowings by £200m by 2023.

The Wolverhampton-based group said it is focused on achieving this target “as quickly as possible” and having originally targeted £40m of disposal proceeds, it increased that to £70m in November and today further increased it to £85-90m as it looks to generate annual net cashflow of at least £50m after dividends.

Marston’s chief executive Ralph Findlay said: “We are making excellent progress on our debt reduction strategy, well ahead of the original 2023 target.”

In November Marston’s announced the sale of 137 of its pubs to Admiral Taverns in a £44.9m deal in in line with the plan to reduce debt in part through the disposal of certain non-core assets.

Meanwhile, updating the markets on its trading performance for the 16 weeks to January 18, Marston’s said total managed and franchise like-for-like sales growth for the period increased 1.0%, reflecting continued growth in drinks sales offset by weaker food sales.

Trading over the Christmas fortnight was strong, with like-for-like sales growth of 4.5%, compensating for more subdued trading in the first three weeks of December as a consequence of poor weather.

It said costs have generally been in line with its guidance from November but that the recently announced 6.2% increase in the National Minimum Wage from April is higher than anticipated, and will increase second half year costs by a further c. £2-3m.

Findlay added: “Marston’s has delivered a creditable performance in a challenging market.  Trading in the key Christmas fortnight was good and has remained solid since which is encouraging.  Our balanced pub portfolio enables us to perform well in the context of current market dynamics and our market-leading Beer Company has continued to increase market share in both the on and the off trade in the period.

“Looking forward, greater clarity on the political agenda should positively impact consumer confidence.  Overall the economic environment for the consumer looks encouraging with low unemployment and healthy wage growth providing us with increasing confidence that the market will grow in 2020.”