Marstons sales hit by Omicron but future looks brighter

Marston's PLC has today issued the following trading update for the 16-week period to 12 January 2022.

Trading Sales comparisons are compared to the same period in FY2019. Total like-for-like sales for the period were down 3.9% vs. FY2019, reflecting the impact of the Omicron variant and consumer sentiment related to the new variant in the last 8 weeks.

Total sales declined by 3.6%. During the five-week period of December like-for-like sales compared to the market outside the M25 were 1% ahead of the market and total sales were 5% ahead.

Prior to the emergence of Omicron and subsequent introduction of renewed restrictions, like-for-like sales in the first 8 weeks to 27 November were up 1.3%, as previously reported, with encouraging trading momentum.

As a result of Government messaging including guidance to work from home and the call to limit social distancing, like-for-like sales were (8.8)% in the last 8 weeks of the period under review. Drinks sales have outperformed food sales during the period.

From a geographic perspective, the group’s pubs in Wales and Scotland were more significantly impacted than those in England by the tighter restrictions that were enforced during the period. Costs remain in line with the guidance provided at the Preliminary Results in November.

During the period, and as a result of the strong trading momentum prior to restrictions being implemented, the group generated positive cash inflow despite the net outflow of £8m for the one-off payments outlined in the Preliminary Results relating to duty/VAT and the CMBC contingent consideration.

As at 1 January 2022, bank borrowings were £199m against the group’s £280m bank facility, which is in place until March 2024.

CEO Andrew Andrea said, “Whilst the emergence of the Omicron variant and subsequent Government guidance temporarily impacted consumer sentiment, we remain confident that the strong trading momentum which we were experiencing prior to that will resume.

“We welcome the various plans underway to gradually ease trading restrictions in Scotland and Wales. These, together with the reduction in the required self-isolation period and anticipation of an imminent end to the work from home directive, should enable some semblance of normalised trading patterns to return.

“Indeed, there is growing evidence over the most recent of weeks of the New Year that consumer confidence is rebuilding, and guests are returning to our pubs in greater numbers, which is encouraging.

'Importantly, Marston’s has a well invested, predominantly community pub estate which is well placed to benefit from the pent-up consumer demand which we are confident remains.”