TIDMMARS
RNS Number : 8131N
Marston's PLC
23 January 2019
23 January 2019
MARSTON'S PLC
Trading for the 16 week period to 19 January 2019
and update on capital allocation
Marston's PLC issues the following trading update for the 16
week period to 19 January 2019 ahead of the Annual General Meeting
to be held at 10:30 today.
Trading
Pubs
Total pub like-for-like sales growth for the period was 1.4%
including strong trading over the Christmas fortnight, with
like-for-like sales growth of 5.7%. Total pub margins were broadly
in line with last year.
In Destination and Premium, like-for-like sales increased by
0.5% in the 16 week period, including like-for-like sales growth of
4.5% in the Christmas fortnight.
In Taverns, trading has continued to be strong with managed and
franchised like-for-like sales growth of 3.2% including growth of
8.1% in the Christmas fortnight. The performance of our tenanted
and leased estate was robust, with earnings up 1% in the 16 week
period.
Marston's Beer Company
We continue to make good progress in Beer Company with total
volumes up 3.5% and own brewed and licensed volumes up 2.5% with
particularly strong performances in both the Free Trade and
Off-Trade channels.
Capital Allocation Update
Following the guidance on cash flow improvements provided in
November 2018, the Board have further reviewed capital allocation
plans going forward. As a result of this review we are now
committed to targeting a GBP0.2bn reduction in net debt to GBP1.2bn
by 2023.
This will be achieved as follows:
- A reduction in new-build investment to around GBP25 million
per annum from 2020 onwards, with investment weighted towards pubs
with accommodation, where we are seeing the strongest returns.
- The disposal of GBP80-90 million of certain non-core assets in 2020-23.
- Through the improvements in free cash flow set out in November
2018 relating to the final salary pension scheme (which has a
modest deficit that is expected to be eliminated within three
years), the securitisation, and reduced organic capital
expenditure.
Although new-build investment is being scaled back, new-build
pubs and accommodation deliver strong returns and will continue to
contribute to growth in Group earnings. In addition, the reduced
level of estate expansion will facilitate increased focus on
generating like-for-like profit growth from the core pub
estate.
In light of the actions described above the Board are committed
to maintain the dividend at the current level during this period of
debt reduction focus.
Commenting, Ralph Findlay, CEO said:
"Marston's continues to perform well and this is a creditable
performance in a challenging market. Taverns and the Beer Company
both delivered strong trading over the core festive period in
particular, continuing the trajectory of recent months, and our
managed food-led pubs also returned to growth.
"We operate in increasingly uncertain times from a political and
macro-economic perspective and, as such, we remain cautious about
the potential consumer outlook until there is more clarity.
However, we are confident of delivering further profitable growth
this year, whilst focussing on our strategic priorities of
generating cash and delivering our stated GBP0.2bn debt reduction
target between 2020 and 2023. In addition, we are committed to
maintaining the dividend at the current level during this period
and believe that the combination of these actions will drive long
term value for shareholders."
There will be a call for sellside analysts at 0730 hours today.
Please contact Andy Low at andy.low@instinctif.com or 020 7866 7886
for the dial-in details.
Forthcoming Events
Please find below the forthcoming reporting dates for the Group,
which are also available on the investor calendar on our website -
www.marstons.co.uk/investors
2019 Interim results 15 May 2019
2019 Preliminary Results 27 November 2019
ENQUIRIES:
Marston's PLC Tel: 01902 329516 Instinctif Partners Tel: 020
7457 2020
Ralph Findlay, Chief Executive Justine Warren
Officer
Andrew Andrea, Chief Financial Matthew Smallwood
and Corporate
Development Officer
NOTES TO EDITORS
-- Marston's is a leading pub operator and independent brewer.
-- It has an estate of 1,545 pubs situated nationally,
comprising managed, franchised and leased pubs, as well as 1,551
hotel bedrooms across the Group's pub and lodge accommodation
portfolio.
-- It is the UK's leading brewer of premium cask and packaged
ales, which include Marston's Pedigree, Wainwright, and Hobgoblin
in addition to a portfolio of regional, craft and world beers
including Estrella Damm and Warsteiner.
-- Marston's employs around 14,300 people.
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END
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