By Jaime Llinares Taboada
Marston’s PLC on Friday warned on booking higher costs for the second half of fiscal 2020 in its pub-business and said that beer volumes were slightly lower in the first four months of fiscal 2020 compared with a year earlier.
The British chain /zigman2/quotes/203821737/delayed UK:MARS -5.62% said that costs are expected to increase by around 2 million pounds to 3 million pounds ($2.6 million-$3.9 million) due to a recently announced 6.2% rise in the U.K.’s national minimum wage, which the company said is higher than expected.
The London-listed company said that beer volumes for the four months ended Jan. 18 are anticipated to be slightly behind last year’s due to a weaker performance in the off-trade in December, particularly with lager sales. It said that earnings are in line with management expectations.
The company said that pub revenues rose 1.0% for the four months, reflecting continued growth in drink sales. It added that costs are expected to be in line with last year’s expenses and that trading over Christmas was strong, with like-for-like growth in sales of 4.5%.
The company said that, as part of its plan of reducing its debt by GBP200 million by 2023, it has further increased the target of disposals to GBP85.0 million-GBP90.0 million, from the last target of GBP70.0 million.
“We are making excellent progress on our debt reduction strategy, well ahead of the original 2023 target,” Chief Executive Ralph Findlay said, adding that the company “has delivered a creditable performance in a challenging market”.