Pub chain Marston's with 21 Scottish sites cheers post-lockdown sales rebound after losses mount
Marston’s, the pub and inns chain with more than 20 sites in Scotland, has slumped to a £105.5 million pre-tax loss in the first half as the lockdown and restrictions during the winter months hit hard.
But bosses said they are hopeful for a strong summer as restrictions start to ease in most areas and have seen early indications that the future for the business is bright.
Since reopening to customers for outdoors drinking last month, and subsequently welcoming them indoors this week, the firm said sales have been at 80 per cent of pre-Covid levels.
As a result, profits since reopening are likely to be flat, reversing the heavy losses suffered during the year, as the business takes advantage of the continued business rates and VAT relief.
Marston’s said 710 pubs were reopened for outdoor trading on April 12 in England, with 66 more on April 26, while 145 were opened in Wales and Scotland on the same day.
With the further easing of restrictions allowing indoor trading, all of the group’s pubs are now open in England, Scotland and Wales. It has 21 sites north of the Border after building up its presence in Scotland in recent years.
But bosses cautioned that more normalised levels of trading will not be achieved until physical distancing restrictions are removed next month under the UK government’s road map.
Revenues during the 26 weeks to April 3 dropped from £343.3m to just £55.1m, although the balance sheet was boosted by £291m from the sale of Marston’s brewing business. Total losses before tax widened to £105.5m from £31.1m.
Departing chief executive Ralph Findlay said trading had been better than expected over the period.
He added: “Whilst still early days, trading has been encouraging since we were permitted to open our doors for outdoor trading last month and it has been fantastic to have our teams back in the business, doing what they do best, and welcoming customers back into our pubs.
“We look forward to all trading restrictions being removed next month which signals a return to some semblance of normality.”
During last autumn the company, whose sites include Edinburgh’s Old Colliery and the Sweet Chestnut in Dunfermline, invested £2m in outdoor seating and said it is hopeful the summer will be successful with strong demand for UK staycations. Findlay said he had been surprised at people’s “resilience” when choosing to drink and dine outside, given Britain’s changeable weather.
Adam Vettese, an analyst at investment platform eToro, said: “Obviously, the firm has been impacted by the closure of its pub estate: revenue is down 84 per cent year-on-year, losses have surged and, at more than £1.6 billion, its debt is of slight concern. Although the firm is actively trying to tackle this.
“But there are also a number of things to be positive about. Firstly, its estate is now significantly stronger than it was before the pandemic, following the addition of 107 pubs from Welsh brewer SA Brains.
“With pubs now allowed to be open indoors, and with the delayed Euro 2020 football championships around the corner, we’re expecting a strong trading period over the coming months.”