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Marston's Sales Weak, To Cut 2,150 Jobs Amid New Restrictions; Stock Down

Shares of Marston's Plc (MARS.L) were losing around 7 percent in London trade after the British brewery, pub and hotel operator reported weak sales in its fiscal 2020. The company also said the newly introduced restrictions due to increasing Covid- 19 cases in the country would impact around 2,150 pub-based roles currently subject to furlough.

The UK Government on October 12 introduced a '3 Tier' system of guidance depending upon rates of infection and perceived risk in different parts of England. The company said the recent additional restrictions will impact jobs.

Within Marston's estate, it has 21 pubs in Scotland, of which 8 are currently closed, and it has 18 pubs in the "highest risk" Liverpool region.

The company said it has initiated a full review of overhead costs which will be concluded by the end of December.

Marston's said, "The initial effect of these new rules has been to undermine consumer confidence and create uncertainty. Restoring confidence will only happen when UK Government and the devolved administrations are able to remove these restrictive measures, which they state are intended to be short term in nature."

Since 4 July, the company had reopened approximately 99 percent of its pubs by fiscal 2020 that ended October 3, though a small number closed subsequently as revised regulations were introduced in Scotland.

In its trading update, Marston's reported 30 percent year-over-year decline in fiscal 2020 sales to 821 million pounds. The company noted that the 15-week period of enforced closure had a material impact on the results for the year.

Total pub sales were 515 million pounds, down 34 percent from last year, principally reflecting the closure period and the impact of the disposal of 168 pubs. In Marston's Beer Company, sales were 306 million pounds, 22 percent below prior year.

Marston's Plc will publish its preliminary results on 10 December 2020.

In London, Marston shares were trading at 41.52 pence, down 7.40 percent.

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