26th Jun 2020 10:05
(Alliance News) - Marston's PLC on Friday reported a bruising swing to loss in its first half, the pub operator took a GBP40 million sales hit due to Covid-19.
The firm looks to the future with optimism however, hailing a "transformational" joint-venture pact it sealed with Danish lager maker Carlsberg AS.
Revenue in the six months to March 28 fell 7.7% annually to GBP510.5 million from GBP553.1 million, Marston's said. It swung to a pretax loss of GBP33.2 million from a GBP16.3 million profit.
Marston's said revenue was in line with the prior year before Covid-19 began to grip the market and force the UK government to impose lockdown measures.
"Underlying trading ahead of this was solid in the first 19 weeks of the period, with strong Christmas and New Year trading offset by the adverse impact of significant and widespread flooding in November and February, together with the impact of disposals," the company said.
"Covid-19 had a material impact on revenues estimated at about GBP40 million," Marston's added.
Plans are in place for its reopening on Saturday next week, the latest step in the UK lockdown easing. Marston's said the "initial revenue and earnings profile" is uncertain.
The pandemic forced Marston's to turn to cost-cutting, at one point it furloughed 93% of its 14,000 strong workforce, with remaining employees taking a 20% salary cut. It also ruled out a dividend for financial 2020. It made a 2.7 pence interim payout last year.
Chief Executive Officer Ralph Findlay said: "Looking ahead, our transformational deal with Carlsberg positions the company well for the future. Post completion, Marston's will be a focussed pub and accommodation business with a significantly strengthened balance sheet, well placed to rebuild trading momentum and leverage the market opportunities available to us over the medium to longer term."
In May, Marston's said it formed a new joint venture for brewing and distribution in the UK with Carlsberg.
The pub operator said it will receive a 40% stake in the Carlsberg Marston's Brewing Co joint venture, plus a balancing cash payment of up to GBP273 million.
Marston's said the deal values its brewing business at GBP580 million and the Carlsberg UK brewing business at GBP200 million.
Marston's shares were 4.3% lower at 61.71p each in London on Friday morning.
By Eric Cunha; [email protected]
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