Strong Christmas sales
Marston’s sees minimum wage adding £2-3 million to costs
Gen!us low-cal lager is brewed by Marston’s
Brewing and pubs company Marston’s reported a strong Christmas fortnight with like-for-like sales up 4.5%, but said a higher than anticipated hike in the minimum wage will add up to £3m million to costs.
In a statement ahead of its AGM it said total managed and franchise like-for-like sales growth for the 16 weeks to 18 January increased 1.0%, reflecting continued growth in drinks sales offset by weaker food sales.
Higher trading over the Christmas fortnight compensated for more subdued trading in the first three weeks of December as a consequence of poor weather.
The company brews low calorie Gen!us lager at its Eagle Brewery in Bedford for the product’s Glasgow-based owners.
The board said costs have generally been in line with the guidance provided at the preliminary results in November. However, the recently announced 6.2% increase in the National Minimum Wage from April is higher than anticipated, and will increase second half year costs by a further c. £2-3 million.
It said it intends to reduce borrowings by £200 million by 2023, with the intention to generate annual net cashflow of at least £50 million after dividends by that time.
Commenting, Ralph Findlay, CEO said: “Greater clarity on the political agenda should positively impact consumer confidence.
“Overall the economic environment for the consumer looks encouraging with low unemployment and healthy wage growth providing us with increasing confidence that the market will grow in 2020.”