(Sharecast News) – Marston’s boss called on the government to support pubs unable to trade during the Covid-19 lockdown as the company said it was financially strong enough to deal with the crisis.
Chief Executive Ralph Findlay said extending the business rates holiday and VAT cut for the rest of 2021 was the minimum needed to help prevent otherwise viable pubs shutting down.
The government imposed a strict, indefinite lockdown on Wednesday in an attempt to curb soaring rates of Covid-19 infections. Pubs are closed but can sell takeaway drinks within restrictions. Marston’s said all its 1,368 pubs were shut and that it did not expect any to reopen until March at the earliest.
Findlay said: “The pub sector has been closed for much of the last nine months and remains in a very difficult position. Regrettably there have been casualties across the sector and It is vital that the government reviews urgently the opportunity to continue to support pubs. Pubs are viable businesses which are part of the social fabric of Britain and which make a major contribution to the economy and communities.”
Marston’s said its trading was materially disrupted by Covid-19 restrictions in the 13 weeks to 2 January and that revenue for the quarter was £54m. The company said it had plenty of liquidity and that it had drawn £104m of a £280m loan facility leaving £176m of headroom.
The company will burn through £3-4m a week of cash during full lockdown but with financing in place and the prospect of positive trading in the second half “we remain confident in our ability to navigate the current difficult environment”, Marston’s said.
Marston’s struck a deal with Carslberg in October to sell the brewer half of its beer business and received initial proceeds of £233m. It will receive a contingent payment of about £20m in October. Rival pub operator Mitchells & Butlers said on Thursday it was planning to raise cash from shareholders to get through the crisis.
Findlay said: “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 rollout of the vaccine programme now underway nationwide, we remain well positioned to rebuild trading momentum once restrictions are lifted.”
