Marston’s reports dive to £22 million loss as half its pubs remain shut under Tier 3 restrictions

Marston’s reported heavy losses on Thursday as more than half of the pub giant’s estate remained closed under Tier 3 restrictions.

The company, which has an estate of 1,379 pubs nationally, comprising managed, franchised and leased sites, has laid off more than 2,000 workers since the pandemic hit.

It reported an underlying pre-tax loss of £22 million for the full year to October 3, down from a £95 million profit in the previous year. Revenues dropped 30% to £821 million.

Chief executive Ralph Findlay said that even in pubs now open and operating under Tier 2 restrictions, like-for-like sales are only around 50% of those seen last December due to the loss of events such as Christmas and office parties. 

He said: “It’s obviously been the most extraordinary and exceptional and difficult year and the financial results reflect that.

“I’m looking to the second half of next year to say that we will be something like normal by that time.”

The pub boss said he would again call on the Government for extensions of the VAT reduction and business rates holiday post-March 31, and the scrapping of beer duty to help wet-led venues.

His comments came as the British Beer & Pub Association revealed that just four in 10 of its members' pubs re-opened post-lockdown last weekend, with overall sales across UK pubs 84% lower than last year since re-opening. Chief executive Emma McClarkin said: “The tier restrictions that have been unfairly placed on our pubs are killing them." 

Findlay said that Marston’s, unlike many small operators, will  be able to ride out the pandemic.

The giant's like-for-like sales reached 90%of normal levels in the fourth quarter, the company has high levels of liquidity, and the chief executive highlighted its suburban presence as a reason for short-term optimism in the new work-from-home reality.

He said Marston’s is today a more “focused business” and “much leaner more streamlined organisation” today following the £780 million deal for its beer arm to create a joint brewing venture with Carlsberg, and the management integration of its high-end brands such as Pitcher & Piano into the company's main pub business.

He said: “We performed better than the market since July, I was pretty pleased with the way we re-opened… I put that down to the fact that most of our pubs are in suburban locations rather than in city centre locations or in London.”

The £22 million underlying pre-tax loss was slightly lower than the £36 million analysts' consensus.