8th Jan 2021 10:38
(Alliance News) - Marston's PLC said its joint-venture with the UK arm of Danish brewer Carlsberg AS has helped boost its liquidity during a time when Covid-19 restrictions have heaped pressure on the pub industry.
Marston's said trading in the 13 weeks to January 2 was "materially disrupted due to Covid-19 related trading restrictions".
During the period, large parts of England were placed under stringent tier 3 and tier 4 restrictions, which forced pubs to close. Under tier 3, pubs are only permitted to provide takeaway services. Wales and Scotland - where Marston's also operates - were also subject to restrictions.
"Despite the ongoing temporary disruption to trading, we have significant liquidity following the completion of the joint venture," Marston's said.
"The joint venture between Carlsberg UK and Marston's Beer Co completed on October 30 and we received initial proceeds of GBP233 million which were used to reduce debt. The profit on disposal of Marston's Beer Co into the joint venture is estimated to be around GBP280 million and the spot value of the contingent payment to be received in October 2021 is approximately GBP20 million."
The company said it has bank facility headroom of GBP176 million. It added that 97% of its staff have been furloughed and its weekly cash burn during lockdown is between GBP3 million and GBP4 million.
Marston's also noted the deal it struck with Welsh brewer SA Brain to operate its portfolio of 156 pubs in Wales through leased and management contract agreements.
"The SA Brain transaction demonstrates our commitment to growing our pub business and our confidence in the medium-term outlook for the UK pub sector," Marston's added.
The company expects all its pubs to be closed until March "at the earliest" as the UK's vaccination rollout progresses.
"Despite these challenges, Marston's has a significantly strengthened balance sheet following the creation of the joint venture with Carlsberg and the financial headroom to weather the extended period of current trading restrictions. With the roll-out of the vaccine programme now underway nationwide, we remain well positioned to rebuild trading momentum once restrictions are lifted," Chief Executive Ralph Findlay said.
Marston's shares were 1.5% higher at 75.61 pence each in London on Friday morning.
By Eric Cunha; [email protected]
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