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Wed 27th Nov 2019 - Update: Marston's, Nando's and Britvic results
Marston’s ahead of schedule on £200m debt reduction target, reorganises pub divisions: Marston’s has reported it is ahead of schedule in its progress as it aims to reduce debt by £200m by 2023. It is targeting £70m of disposal proceeds in the current year. Earlier this week it completed the disposal of 137 pubs to Admiral Taverns for £44.9m. A further £40m reduction in capital expenditure reflects lower new-build spend with the company having announced in July it had decided to halt all pub restaurant new-build projects over the next three years. The company has reorganised its pub operational and commercial structure to no longer operate the business as distinct Destination and Premium, and Taverns segments as just as a single pubs and bars business. Marston's reported underlying profit before tax of £101.0m for the year ending 28 September 2019, compared with £104.0m the previous year. Underlying Ebitda of £221.9m was maintained against last year's £222.6m. It reported revenue growth in all trading segments and earnings momentum in the drinks business. Average profit per pub was in line with last year, “reflecting the balanced pub portfolio”. Ebitdar per pub (adjusting for sale and leaseback agreements) increased by 2%. Brewing volumes rose 1% while completion of the Charles Wells integration has delivered £4m targeted synergies. A total of eight new-build pub-restaurants, 15 wet-led pubs and two lodges opened in the year. As previously reported, underlying group turnover rose 2.9% to £1.2bn. The company saw a sixth consecutive year of like-for-like pub sales growth – like-for-like sales growth was 0.8% with wet-led pubs outperformed food-led pubs. In the first seven weeks of the period pub like-for-like sales are ahead of last year and beer performance is in line with expectations. Chief executive Ralph Findlay said: “We are making good progress with our debt reduction plans and are ahead of schedule in meeting the accelerated £70m of disposal proceeds that we are targeting in the current year. We continue to benefit from Marston’s balanced business model and our Taverns wet-led community pubs and brewing businesses have both once again outperformed the market, building on an outstanding year last year. We are employing a renewed focus on the proposition in our food-led pubs and remain well placed to benefit from reduced supply in this market segment, of which there is beginning to be some evidence. Our principal focus remains to reduce our net debt by £200m by 2023 – or earlier – and the measures we are taking now will result in a high quality business that is cash generative after dividends and capital expenditure. 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.” On current trading, the company added: “In the first seven weeks of the period pub like-for-like sales are ahead of last year and beer performance is in line with expectations. As noted previously, the majority of profit in the first quarter is generated over Christmas and new year, and we are well prepared for this all-important trading period. As noted elsewhere, consumer confidence remains weak. Brexit, political uncertainty and real wage pressures could further impact on consumer confidence, but to date there has been no marked change in spending patterns across the business. Brexit contingency plans are in place to ensure we are as prepared as we can be for the critical Christmas and new year trading period, though current indications are that the risk of a disorderly Brexit have reduced. If a disruptive exit from the EU does happen we believe it would impact the wider sector in relation to the cost of goods and labour. Our direct exposure is relatively limited, with only 5% of our workforce of non UK EU origin. The year ahead will be a 53-week period. Following a reorganisation of the pub operational and commercial structure we no longer operate the business as distinct Destination and Premium, and Taverns segments. To align our reporting and operational structures we will therefore be reporting our pub business under a single ‘pubs and bars’ segment from FY2020 to reflect these changes.”

Nando’s reports sales pass £1bn: Nando’s has reported sales rose 8.4% to £1.1bn for the year ending 24 February 2019, compared with £969.3m the year before. Operating profit decreased 1.9% to £41.9m, compared with £42.8m the previous year “largely due to higher costs as the business grew”. It reported a “continued high level of capital expenditure at £87.9m, compared with £101.2m the year before, reflecting high levels of confidence in the business and growth prospects as it invested in new restaurants, infrastructure and expanded the international footprint”. The total number of restaurants decreased by one to 936 as of 24 February 2019. This consisted of 740 company-owned restaurants and 196 restaurants run on a franchise basis. The company bought out five franchised restaurants during the year – four in Australia and one in new Zealand – for a total of £278,000. The previous year it bought 24 restaurants from franchisees – 20 in Australia and four in New Zealand – for £7.6m. The company reported a pre-tax loss of £38.5m in the year, compared with a loss of £36.1m the year before. Of total sales, £1.0bn came from company-owned restaurants, compared with £958.2m the previous year while £12.1m came from royalties and franchise fees, compared with £11.1m the year before.

Britvic reports full-year revenue up 1.4%: Britvic has reported revenue increased 1.4% to £1,545.0m for the 52 weeks to 29 September 2019. Adjusted Ebit increased 4.4% to £214.1m. Profit after tax decreased 30.9% to £80.9m due to adjusting items of £84.6m, including write down of France assets. Chief executive Simon Litherland said: “I am pleased to report that Britvic has once again delivered a strong performance, with good momentum in our key brands and categories. In 2019 we have increased revenue, adjusted margin and Ebit, as well as significantly improving free cash flow generation. Our commercial execution, innovation agenda and revenue management continue to deliver results. Our transformational business capability programme is now complete – and importantly forms a key part of our broader commitment to building a more flexible and sustainable business model going forward. Building on this strong platform, I am confident that Britvic is well placed to capitalise on the future growth opportunities in the years ahead. While we anticipate conditions to remain challenging, we fully expect that we will make further progress in 2020.” Of the UK market, he added: “Against a backdrop of softer consumer demand, we have focused on consistent execution of our commercial plans, which has resulted in increased revenue and brand contribution in both our carbonates and stills brands. The GB soft drinks market (as measured by Nielsen) has continued to grow value at 2.3%, while volume declined 1.3%. As a year-on-year comparison, these figures must be set against the backdrop of exceptional summer weather in 2018. Our well-positioned portfolio benefited from the continued trend toward low and no-sugar brands, with Robinsons, R Whites, Tango, Pepsi MAX and 7UP Free all in strong revenue growth. The new Robinsons brand extensions launched last year have continued to be very successful, with the cordials range the number one brand in the premium category. The combined retail market value of creations and cordials is £32m. Fruit Shoot performance has stabilised this year, gaining market value share, while J2O was in decline, driven by a weaker performance in the on-trade. Robinsons Refresh'd, Lipton Ice Tea and Purdey's all grew strongly. Pepsi had another very successful year, with revenue growth of more than 6% and further gains in market share. The growth was driven by our continued focus on no-sugar Pepsi Max. Tango revenue grew by 13%.”

Manorview appoints head of people: Scottish-based boutique hotel and leisure group Manorview has appointed Claire Johnston as head of people. Johnston joins from Auchrannie Resort in Arran where she had been its HR and people development manager for three years. She has vast experience in the industry and has previously worked for JJW Hotels & Resorts as well as The Roxburghe Hotel in Kelso. Manorview was formed in 2007 with the purchase of The Commercial Hotel in Wishaw. Its portfolio now spans eight hotels, two pubs, two nightclubs, a leisure club and luxury spa. For the past three years the group has focused on its culture and people development by implementing initiatives such as its HeartCount profit share fund. Managing director David Tracey said: “The Manorview culture is very people-focused and while we’ve been busy implementing lots of initiatives over the past three years, there’s still so much more we want to achieve and progress towards. Claire’s appointment will help drive our journey, and we’re delighted she’s joined our team.” Johnston added: “Manorview's passion for people resonates with me, and its forward-thinking plans, drive and energy is infectious.”

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