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(Company issued correction for 16-week period end date, changing it to January 22 instead of January 12.)
(Alliance News) - Marston's PLC on Tuesday said sales took a hit in the 16 weeks to January 16 due to government restrictions in relation to the Omicron variant but affirmed that costs were still in line with expectations.
The Wolverhampton, Midlands-based pub and hotel operator said like-for-like sales were down 3.9% in the 16-week period to January 22, compared to the same period in the 2019 financial year.
Total sales for the period declined 3.6%, the company said.
Marston's explained this with the emergence of the Omicron variant and subsequent UK government guidance to work from home that temporarily hurt consumer sentiment.
Prior to the emergence of the new variant, like-for-like sales in the first eight weeks to November 27 were up 1.3%, the company added.
"From a geographic perspective, the group's pubs in Wales and Scotland were more significantly impacted than those in England by the tighter restrictions that were enforced during the period," Marston's noted.
Nonetheless, costs remain in line with the guidance provided at the preliminary results in November, the company added.
In the 16-week period, Marston's generated positive cash inflow despite a net outflow of GBP8 million, due to one-off payments relating to value added tax and contingent consideration for Carlsberg Marston's Brewing Company Ltd.
Marston's attributed this to the strong trading momentum before restrictions were implemented.
As at January 1, Marston's bank borrowings amounted to GBP199 million of its GBP280 million bank facility that will remain in place until March 2024.
"Whilst the emergence of the Omicron variant and subsequent government guidance temporarily impacted consumer sentiment, we remain confident that the strong trading momentum which we were experiencing prior to that will resume," Chief Executive Andrew Andrea commented.
"We welcome the various plans underway to gradually ease trading restrictions in Scotland and Wales. These, together with the reduction in the required self-isolation period and anticipation of an imminent end to the work from home directive, should enable some semblance of normalised trading patterns to return. Indeed, there is growing evidence over the most recent of weeks of the New Year that consumer confidence is rebuilding, and guests are returning to our pubs in greater numbers, which is encouraging," Andrea added.
Shares closed up 1.2% at 79.00 pence each on Tuesday in London.
By Abby Amoakuh; abbyamoakuh@alliancenews.com
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