Marston's stalls on tier expansion

On the one hand, the green light for a £780m joint venture deal with Danish brewing giant Carlsberg; on the other, over £300m in goodwill and property revaluation impairments. In common with industry peers, Marston’s (MARS) has been engaged in a damage limitation exercise, cutting operating costs by 29 per cent through FY2020, while making the best of government support schemes.

The brewery, pub and hotel operator swung to an underlying loss of £38.4m during the period, but there were glimmers of hope. Like-for-like sales for its managed and franchised pubs reached 90 per cent of the 2019 rate achieved in the 13-week period to 3 October, while off-trade volumes were up by nearly a quarter.

The group’s freehold pub estate is predominately located outside of high-density urban areas which have suffered disproportionately because of the pandemic. However, that needs to set against the negative impact from the expansion of the government’s tier system. Over half of the Marston’s estate, some 780 pubs, remain closed after the November lockdown. Sell.

Last IC view: Sell, 62p, 26 Jun 2020