Marston’s toasts sales growth as disposals help it slash debt pile
9 October 2024, 08:04
Pub operator exited its brewing operations and sold a swathe of pubs over the last year, in a bid to pay off its debts.
Marston’s has enjoyed a surge in its pub sales over the last year, while also trimming its debt pile by about £300 million after selling off its remaining stake in its historic brewing business.
The London-listed company saw a 4.8% rise in like-for-like sales over the past year, amid strong growth across both its food and drink divisions.
The group, which operates 1,339 pubs across the UK, said sales growth eased during the most recent three months to September 28, amid unusually wet weather during the quarter.
Like-for-like sales grew 3.8% for the most recent 12 weeks as punters continued to drink and dine at its venues despite pressures on consumer budgets.
Analysts had predicted Marston’s would report like-for-like growth of 5% for the year to September.
Net debt has fallen to about £885 million, Marston’s said, down £300 million compared with the same point last year, amid a number of disposals across the business.
The trading update comes amid a transition period for the business, as it fully focuses on pub operations after exiting brewing operations fully.
In 2020, Marston’s agreed to sell part of its brewing business – which makes Hobgoblin and Shipyard – to Carlsberg and form a joint venture with the Danish brewer.
In July this year, it sold its remaining stake in the cask ale brewer, the Carlsberg Marston’s Brewing Company (CMBC), for around £206 million.
Marston’s said offloading the spin-off will allow it to focus purely on operating its pub chain and will reduce the amount of debt it holds.
On top of this, the company has sold off a swathe of pubs over the last year amid a bid to improve its portfolio.
Those include the disposal of 18 pubs to private equity rival Admiral Taverns, and 19 pubs to Red Oak Taverns in a deal in May.
Marston’s said the combination of its sales growth, its pub disposals strategy, the sale of its share in CMBC and a dividend payout for CMBC in the first half of this year helped it slash its debt pile.
Chief executive Justin Platt said: “The strong revenue performance is very pleasing. This reflects the quality of the experiences we are providing for our guests as well as the continued focus and passion of our team.
“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.”
