Pub giant Marston’s has plunged to a loss for the past year after £43 million was wiped from the value of its property portfolio.
The brewing and pub group said it swung to a £20 million pre-tax loss for the year to September 28, sliding from a £54.3 million profit last year.
Last month it warned that annual profits would be lower than expected due to a poor performance in food sales, which more than offset growth in its drinks business.
Marston’s said it hopes to restore profitability and reduce its debts by securing £70 million through asset sales.
The company said it has made “good progress” with its debt reduction plans, after it completed the sale of 137 pubs to Admiral Taverns for £44.9 million on Monday.
It said it has already completed £50 million worth of disposals for the current year as it seeks to cut £200 million off its debt by 2023.
Revenues across the group jumped 2.9% to 1.17 billion, with growth in both its drink-oriented and food-focused pubs driving 0.8% like-for-like growth.
Sales volumes rose by 1% in its brewing arm despite strong comparatives from the previous year, it said.
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 segmentRalph Findley, chief executive of Marston's
Marston’s said trading has been “on track” for the start of the current financial year and that it is “well-prepared” for the key Christmas period.
The group has an estate of 1,400 pubs across the country and employs around 14,000 people.
Ralph Findley, chief executive of the company, said: “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.”
Mr Findley added that he believes Christmas could drive punters into pubs as they look to “escape” the turbulent political backdrop.
He admitted that the timing of the General Election is “not great” but said he is hopeful it can result in greater certainty for businesses.
Paul Ruddy, leisure analyst at Goodbody, said: “There was little surprise in today’s results from Marston’s, which continues to face the dual headwinds of increasing costs and weak consumer spending across the sector.
“Looking ahead, our view remains cautious given it will be difficult to grow profits in the coming year and net debt remains high.”