- Marston’s expects to report net debt for the year ending September of c.£885m
- It completed the sale of its Carlsberg Marston’s Brewing Company stake in July
Marston’s slashed its debt pule by about £300million last year thanks to healthy trade at pubs and the sale of its stake in a brewing business.
The hospitality chain, which operates more than 1,300 pubs across the UK, expects to report net debt for the year ending 28 September of around £885million.
It completed the £206million disposal of its 40 per cent stake in Carlsberg Marston’s Brewing Company in July, bringing to an end a 190-year involvement in brewing for the Wolverhampton-based firm.
Lower liabilities: Marston’s said its debt pile slumped by about £300million last year thanks to healthy trade at pubs and the sale of its stake in a brewing business
Marston’s said the deal would also enable it to focus on being a pub-focused business, while still benefiting from its brand distribution agreement with CMBC.
Alongside this, the group sold numerous pubs, including 18 to private equity-backed Admiral Taverns and 23 to Chester-based Red Oak Taverns.
The London-listed company further credited its debt reduction to a dividend it received from CMBC and a ‘strong trading performance’ last year.
Retail sales at its managed and franchised pubs rose by 5.8 per cent, supported by ‘encouraging’ food demand and ‘good momentum’ from food and drink occasions.
Over the final quarter, like-for-like sales expanded by 3.8 per cent despite much of England experiencing record rainfall in September.
Following this, Marston’s still expects underlying pre-tax profits, excluding the sale of its CMBC stake, for the recent financial year will be aligned with consensus forecasts of £40.5million.
Justin Platt, chief executive of Marston’s, said the ‘very pleasing’ result ‘reflects the quality of the experiences we are providing for our guests as well as the continued focus and passion of our team’.
He added: ‘This performance, combined with our recent disposal of CMBC, puts Marston’s in a strong position to drive value for our shareholders as a focused pub business.’
Marston’s originally formed CMBC in October 2020 at the height of the Covid-19 pandemic when it sold a 40 per cent stake to Carlsberg’s UK business in return for a £273million upfront payment.
The tie-up allowed the Danish brewing giant to sell its drinks, which include Tuborg Pilsner and Somersby Cider, alongside beers like Hobgoblin and Wainwright in Marstons’ pubs.
Both parties believed it would also lead to higher productivity and cost savings and create one of Britain’s top brewing businesses.
Marston’s shares were 0.8 per cent up at 43.2p on late Wednesday morning, taking their gains over the past 12 months to 54 per cent.
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