Key points:
- Marston's released a trading update for the year ended October 1
- Sales for the year were relatively flat
- Marston's shares are up over 4%
Shares of Marston's (LON: MARS) climbed in the early part of Tuesday's session after the company released a trading update for the 52 weeks to October 1, 2022.
The pub operator mainly reported flat sales, with total like-for-like sales down 1% compared to the full year 2019. Marston's said this was due to the impact of pandemic-related trading restrictions in December and January.
Marston's shares have risen more than 4% at the time of writing. Despite today's rise, it has fallen 52% in 2022.
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However, Marston's is looking towards a potential boost from the World Cup in the not-too-distant future. The company's Chief Executive Andrew Andrea said Marston's is “primed to maximise the trading opportunities provided by the forthcoming World Cup and first restriction-free Christmas in three years.”
The company's total retail sales in its managed and franchise pubs were up 2% compared to 2019, while like-for-like sales increased 3% compared to 2019 and up 4% on last year. The company said like-for-like sales are encouraging and continued to improve in the 10 weeks from July 24 to October 1. Marston's added that growth continues to be primarily driven by drink sales, with food sales in the period weaker due to the hot weather.
It added that customer demand remains encouraging, “notwithstanding the continued uncertainty around the cost of living,” and it continues to have confidence that its pub strategy is starting to deliver positive momentum.
On energy, the company said it awaits the review of the price cap, although it remains comfortable with its guidance on energy costs for the financial year. However, it acknowledged that electricity costs in the last 10 weeks of FY2022 have been “higher than originally expected due to the volatile market for energy over the last few months.”
Meanwhile, inflationary pressures on Marston's food and drink costs are in line with previous guidance.
Net borrowing as of October 1 was £1.2 billion, £16 million lower than last year and £30 million below the first half.
“This is a good performance, with the trading momentum we experienced in the Summer continuing. Marston's has a long-term capital structure which is well suited to the current market environment and we remain committed to our debt reduction strategy with which we continue to make progress. We are managing cost inflation well with food, drink and energy costs covered for the immediate future,” added Andrea.