Revenues tumble at Marston's as pandemic takes it toll

Marston’s saw revenues and profits tumble in 2020, after lockdown measures closed its pubs during an “extraordinarily difficult” year for the sector.

Underlying revenues came in at £821.0m in the 53 weeks to 3 October, down from £1.17bn a year previously. The underlying loss was £22.0m, compared to 2019’s pre-tax profit of £95.1m.

On a total basis, the loss widened from £20.1m in 2019 to £397.1m.

Marston’s pub estate was closed for 15 weeks from 20 March. The estate reopened on 4 July, but remained under a range of restrictions, from social distancing to a 10pm curfew.

As a result, the group took a non-cash impairment charge of £305.7m for goodwill and for property, plant and equipment, triggered by the pandemic.

Looking ahead, Marston’s – which has an estate of 1,368 managed, franchised and leased pubs – insisted it was well positioned for the future. The group looked to position itself as pure pub operator earlier in the year after signing a joint venture agreement for its brewing business with Denmark's Carlsberg.

But it conceded that the near-term performance remained dependent on the development of restrictions cross England, Wales and Scotland.

“Following the recent government announcements on the tier system and criteria, the winter months will be both challenging and uncertain, and 780 pubs remain closed after the November lockdown,” the firm warned.

Ralph Findlay, chief executive, said: “2020 has been an extraordinarily difficult year for the pub and wider hospitality sector which has been particularly hard hit by the pandemic.

“While short-term uncertainty remains, we have taken swift action to future-proof the business to withstand the challenges presented by the pandemic, and Marston’s has emerged a significantly stronger business, with a substantially strengthened balance sheet, and are well placed to rebuild trading momentum when restrictions are eased.”

Greg Johnson, analyst at Shore Capital, called 2020 a “transformational year” for Marston’s.

He continued: “Aside from the impact of Covid, the formation of the Carlsberg Marston’s Beer Company not only began the process of unlocking value form its high-quality beer portfolio, but significantly supports the deleverage story and repositions Marson’s as a pure pub company.

“We believe that the Marston’s estate is well positioned to benefit from the likely trends to emerge post Covid, notably the ongoing switch in consumption from city to suburbs.”