# Marston’s PLC Trading Update

- Link: https://www.directorstalkinterviews.com/marstons-plc-trading-update-2/412788409
- Published: 2019-07-24T07:53:33+01:00
- Author: Amilia Stone

**Marston’s PLC** (LON:MARS) today issued the following Trading Update for the 42
weeks to 20 July 2019. 

**Trading**

We have achieved sales growth in both our pub and beer businesses in the 42 week
period to date, despite weaker sales in the last 16 weeks reflecting strong trading
in the same period last year, which included the World Cup and an unusually hot 
summer.

Like-for-like managed and franchised pub sales increased by 0.5% in the 42 week 
period.  In Destination and Premium, like-for-like sales for the 42 week period 
were 0.1% ahead of last year and in Taverns, like-for-like sales for the 42 week
period were 1.1% ahead of last year.  We continue to remain disciplined in terms
of pricing, discounting and promotion, with operating margin in line with our expectations.

In Marston’s Beer Company, volumes are in line with last year and continue to outperform
the market, with volume performance over the last 16 weeks principally reflecting
weaker lager sales in the off-trade.

**Debt Reduction Plans and Reallocation of Capital Expenditure**

We set out in the Company’s January trading update our target to reduce net debt
by £200 million in the period 2020-2023 through reduced capital expenditure, £120
million of disposals and a reduction in interest and pension costs.  We have made
good progress already in this regard and remain on track to hit our 2019 cashflow
and debt targets.

Following a further review of our plans, we have decided to accelerate the timeframe
within which the debt reduction target is achieved.  As a consequence, we are proposing
to defer £70 million of the new-build investment planned for the next three years
and reallocate £20-30 million of funds into our organic capital plans, which are
generating significantly higher returns.  The earnings impact of this capital reallocation
will be minimal and this will generate an additional £40-£50 million of cash flow
over the next three years.

> **Commenting, Ralph Findlay, Chief Executive Officer, said**:
> “We have achieved modest growth during the 42 weeks to date continuing the long
> term positive LFL sales trend despite May and June being hampered by relatively
> poor weather. We have a high-quality, balanced pub estate and a highly disciplined
> approach to preserving margin, together with a leading beer business which continues
> to perform well leveraging our outstanding brand portfolio and increasing our 
> market share.
> “Having made good progress with our cash generation and debt reduction plans, 
> we have subsequently decided to accelerate our efforts in this context and defer
> our remaining new-build plans and reallocate £20-30 million of the £70 million
> new-build capex over the next three years to drive higher returns from our existing
> estate.  We believe that this focus will further enhance our returns from our 
> existing pub business and reduce our debt at an even greater pace.”

**Forthcoming Events**

Please find below the forthcoming reporting dates for the Group, which are also 
available on the investor calendar on our website – www.marstons.co.uk/investors

| Year-end trading statement | 15 October 2019 | 
| 2019 Preliminary results | 27 November 2019 | 
| 2020 Interim results | 13 May 2020 | 
| 2020 Preliminary results | 25 November 2020 |

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