Pub group Marston’s today said it has no plans to lower its financial forecasts as it has forward contracts in place to mitigate any impact of currency fluctuation on supply chain costs.
Despite one of the most turbulent six months the British economy has ever seen, the company said there had been “no material changes” to market conditions that would impact upon its expectations for the full year.
While it acknowledged wider concerns regarding the possible impact of Brexit on consumer sentiment and input costs due to sterling weakness since the vote, it said there has been no discernible change in the spending habits of its customers to date.
And it stressed that shareholders did not need to be worried about the prospect of higher costs. “We have forward contracts in place for 2017 and much of 2018 which will mitigate the risk of higher input costs due to exchange rate fluctuation,” it stated.
Marston’s said it has planned for a “modest” increase in business rates in 2017, but noted that it is protected from more significant increases by its low exposure on the high street and in city centres.
It said the only notable increase would be in non-cash pension interest costs, which will rise by £1.4m this year as a consequence of the impact of falling gilt yields on pension deficits.
Marston’s continues to see a healthy food-drink sales mix. Its Revere business acts as an ‘innovation hotbed’ for trialling new food styles and concepts that can then be extended to the broader pub estate.
This year it has rolled out its ‘Pizza Kitchen’ concept to 70 sites and introduced ‘smokehouse food’ and ‘better burger’ concepts in its Generous George pubs following successful trials in the Revere business.