Marston’s PLC (LON:MARS) has reported a dip in profits for its latest full-year as a result of slower food sales, however the shares crept higher on Wednesday as trading in the first weeks of its current year strengthened ahead of the crucial Christmas period
For the year ended 28 September, the FTSE 250 pubs and bars group reported an underlying pre-tax profit of £101mln, down from £104mln in 2018, while revenues inched up to £1.17bn from £1.14bn.
The group blamed “more subdued sales in food-led pubs” for the slight reduction in earnings, as well as challenging comparatives from the prior year which saw a boost from the hot summer and the 2018 World Cup, which drove more customers into its pubs and beer gardens.
Despite the fall in profits, Marston’s said like-for-like (LFL) sales were 0.8% higher over the year, while total volumes for its brewing business rose 1%.
The final dividend for the year was maintained at 4.8p per share, with the total dividend also unchanged at 7.5p.
Looking ahead, the company said as part of a strategy to cut down on its debts it had reduced its capital growth spending, and as a result, is not planning to open any new pubs in 2020.
"We are making good progress with our debt reduction plans and are ahead of schedule in meeting the accelerated £70mln of disposal proceeds which we are targeting in the current year”, said chief executive Ralph Findlay.
"Our principal focus remains to reduce our net debt by £200mln by 2023 - or earlier - and the measures we are taking now will result in a high-quality business which is cash generative after dividends and capital expenditure”, he added.
Earlier this month, Marston’s continued efforts to cut down its debt pile by selling off 137 of its pubs to rival Admiral Taverns for £45mln.
Into its current year, Marston’s said LFL sales at its pubs in the first seven weeks were ahead of the year-ago period and that it is “well-prepared” for Christmas and New Year when most of its profit for the quarter is generated.
However, the company highlighted weak consumer confidence as well as “Brexit, political uncertainty and real wage pressures” as factors that could impact the business, although to date there had been no major changes to spending patterns among its customers.
The positive outlook helped lift the shares 0.9% to 128.5p in early deals.