Pub operator Marston’s has revealed it has agreed a £70m banking facility to help improve its liquidity during the ongoing coronavirus pandemic.
In a Covid-19 specific trading update it said it has taken a “highly prudent approach” in its management of the business during this period. It added that all of its board members have volunteered “significant cuts” in pay and fees for the time being and recognise that Marston’s many stakeholders, including employees, tenants and lessees, retailers, customers and communities are facing “major” challenges.
In order to ensure that Marston’s is “best placed” to navigate this period of uncertainty, it added that management has taken this additional step in order to strengthen its balance sheet to provide additional liquidity headroom and financial flexibility.
Marston’s said it believes that this additional 180 day financing facility, together with ongoing Government support on employment costs, deferred tax payments and rent and rates relief, as well as continued income from beer sales into the off-trade, will provide it with sufficient liquidity to meet its financial obligations beyond the end of the financial year.
It said: “We have made good progress to date towards our debt reduction targets and remain committed to our overall strategy to reduce the company’s leverage over the medium term. However, the temporary closure of our pub estate and the additional liquidity described above will impact that trajectory for the time being.”
The firm also revealed that as it prepares for the possibility that the current state of lock-down within the hospitality sector may continue for some months its board believes it is “prudent” to plan for no dividends for financial year 2020.