(Alliance News) - Marston's PLC said Wednesday it swung to pretax loss in its recent financial year but reported an increase in revenue as it said it is "well prepared for the all-important Christmas and New Year period".
The brewer and pub operator said for the 52 weeks ended 28 September, its revenue was GBP1.17 billion, an increase from GBP1.14 billion in comparative period a year ago.
Marston's swung to pretax loss of GBP20.0 million, compared to GBP54.3 million profit in 2018. The firm's results were hit by a GBP43.4 million impairment of underperforming Destination and Premium properties and a GBP48.7 million loss reflecting interest rate swap valuation movements.
Underlying pretax profit still declined marginally, to GBP101.0 million from GBP104.0 million.
Like for like sales grew 0.8% with growth in both wet-led and food pub segments, while total volumes rose 1% on strong growth in independent free trade.
The company said proposed a final dividend of 4.8 pence per share, unchanged from a year before, resulting in a total dividend for the year of 7.5 pence per share, also in line with 2018.
Net debt at the financial year end was GBP1.40 billion, up slightly from GBP1.39 billion a year ago, which the company said reflected investment in new sites.
However, Marston's said it is ahead of schedule in its aim to reduce net debt by GBP200 million by 2023, having reduced growth capital spend on new-build pubs and lodges in 2019. The firm has raised its pub disposal target for the 2020 financial year to GBP70 million from GBP40 million.
"As a result of this good progress we are aiming to achieve the debt reduction target in a shorter timeframe. When we achieve the target, our aim is to operate a high quality pub and beer business generating sustainable and consistent net cash flow after dividends of at least GBP50 million per annum," said Marston's.
Chief Executive Officer Ralph Findlay said: "Our principal focus remains to reduce our net debt by GBP200 million by 2023 - or earlier - and the measures we are taking now will result in a high quality business which is cash generative after dividends and capital expenditure," Findlay said.
"Trading is on track for the initial weeks of the current year and we are well prepared for the all-important Christmas and New Year period," Findlay noted.
At the beginning of November Marston's agreed to sell 137 pubs for GBP44.9 million to Admiral Taverns in a bid to cut its debt load.
Marston's shares were down 0.1% in London at 127.26 pence each on Wednesday.
By Loreta Juodagalvyte; loretajuodagalvyte@alliancenews.com
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Marstons (MARS)