Marston’s, a leading pub operator, has announced an impressive increase in sales, surpassing market averages.
- For the 52 weeks ending 28 September, total retail sales were up by 5.8% from the previous year.
- Like-for-like sales grew by 4.8%, slightly exceeding analysts’ expectations.
- The company attributes its growth to strong food and drink sales and efficient cost management.
- Marston’s strategic shift following the Carlsberg divestment has positioned it favourably in the market.
In its latest market update, Marston’s, a prominent pub operator listed on the FTSE, reported a significant rise in total retail sales for the 52-week period ending 28 September. The sales increased by 5.8% compared to the previous year. This growth highlights the company’s strong performance, particularly in a challenging market environment.
The firm noted a 4.8% increase in like-for-like sales, which slightly exceeded the 4.5% growth anticipated by analysts for the full year. This achievement is attributed to the ‘good momentum’ in both food and drink sales, with a particular emphasis on the positive impact of a menu simplification.
Marston’s operates a portfolio of 1,339 pubs across the UK and cites its robust trading performance as a reason for its confidence in meeting full-year profit forecasts. The company has focused on driving cost efficiencies, which has enabled it to outpace broader market growth.
Earlier this year, Marston’s strategically divested its stake in Carlsberg, securing over £200 million. This move was intended to allow the company to focus entirely on its pub operations. The sale proceeds not only boosted Marston’s share price but also significantly reduced its net debt, bringing it down to approximately £885 million, a reduction of £300 million from the previous year.
Justin Platt, Marston’s Chief Executive, expressed satisfaction with the company’s strong revenue performance, noting it reflects the quality of experiences offered to guests and the dedication of the team. He highlighted that the recent Carlsberg divestment positions Marston’s favourably for future growth.
However, the industry faces challenges, notably the ‘double whammy’ of upcoming property tax increases and the end of current business rates relief in April next year, as reported by Altus. These changes could potentially increase bills significantly, impacting the pub sector’s financial dynamics.
Despite these potential headwinds, Marston’s strategic focus on enhancing its pub portfolio appears to be yielding positive results. Julie Palmer from Begbies Traynor remarked that although the economic climate has made consumer spending cautious, Marston’s has adapted by leveraging its strong food sales, much to its advantage into the festive season.
Palmer further commented that, while the threat of changes to business rates and minimum wage looms with Labour’s upcoming Budget, Marston’s proactive approach in managing its operations should help it navigate these challenges. The focus remains on maintaining customer loyalty and profitability amid broader industry difficulties.
In conclusion, Marston’s demonstrates a robust position in a challenging market, with strategic shifts and operational efficiencies supporting its continued growth.
