Marston’s gears up for a busy summer as it ‘outperforms’ market
Pub group Marston’s has said its focus on community-based pubs has fueled its “outperformance” of the wider market.
In the first half of 2024, Marston’s has seen revenue up 5.2% to £428.1m, with strong momentum across food and drink sales and like-for-like sales up 7.3% and ahead of the market.
The operator of 1,395 pubs reported a 22% increase in underlying pub operating profit to £52.7m, as its debt reduction strategy brings debt down to £1.1bn.
The Wolverhampton-headquartered pub giant has said with 90% of its core estate classed as ‘community’ venues, it has minimal exposure to the more volatile demand in city centre establishments.
It plans to dispose of £50m worth of non-core and unlicensed properties while gearing up for the summer to take advantage of major sporting events. Investments have been made in the estate, particularly in pub gardens, so the group is “well positioned” to capitalise on the trading opportunity.
With a “predominantly freehold estate, our fixed costs and a significant proportion of our food and drink costs secured for FY2024” Marston’s says it has a “high degree of confidence” going into the second half of the year.
Marston’s has also secured an amendment and extension to its banking facility, which was due to expire in January 2025.
The revised £340m of funding comprises £300 million of bank facilities, maturing in July 2026, and an additional £40m bank facility with a maturity of up to July 2026. Drawings of which must be used to repay the existing £40m private placement that matures in January 2025. There are one-off transaction costs of around £4m and the costs of the facilities are variable.
Justin Platt joined the group as CEO in January 2024. Platt was most recently the chief strategy officer for Merlin Entertainments, where he has spent the last 12 years. He has more than 30 years of experience in hospitality and consumer-facing businesses working for firms such as AstraZeneca and Kellogg’s.
Platt said: “A positive H1, Marston’s has delivered strong like-for-like sales growth of +7.3% outperforming the market and achieving an impressive 22% uplift in pub operating profit. We have managed costs well and made further progress to reduce debt. This performance is testament to the dedication and hard work of our talented team, who constantly strive to delight our pub-loving guests.”
“The outlook for H2 is encouraging. With a number of ‘must not miss’ major sporting events, our massively upgraded pub gardens and much-loved food menus, we expect our pubs to be very popular this summer.”
“Reflecting on my first few months with Marston’s, I am very excited by the potential that lies ahead. The UK Pub Market offers significant value-driving opportunities for those who can engage and deliver for their guests. With our high-quality estate and guest obsessed team we are well placed to capitalise and to deliver consistent, reliable cashflows that will drive value for our shareholders.”
