LONDON (ShareCast) - (Sharecast News) - Marston's said it had agreed an extra £70m of credit to boost liquidity during the coronavirus shutdown as the brewer and pub operator scrapped dividends for 2020.
The FTSE 250 company said the 180-day increase to its bank facility would give it enough liquidity to meet its obligations beyond the end of the financial year even if pubs stayed shut until then.

Marston's said it had also agreed with its banks to alter its loan covenants for September 2020 and March 2021 and had asked bondholders for some waivers and amendments.

The company warned on 18 March that it was unlikely to recommend an interim dividend in May. In its update Marston's said investors should expect no payout for current financial year to the end of September.

"Pending further guidance from the UK government and in view of the continued uncertainty surrounding the re-opening of the pub sector and how that may be achieved, we have to prepare for the possibility that the current state of lock-down within the hospitality sector may continue for some months," Marston's said. "Therefore, the board believes it is prudent to plan for no dividends for financial year 2020. Future dividends will be reviewed when normalised trading resumes."

The company said it had made good progress with debt reduction but that the closure of its pubs and the required extra liquidity would slow its progress.

Marston's 1,400 pubs, bars and restaurants were closed under orders from the government in March as part of the economic shutdown to stem the spread of Covid-19. The government has said pubs may start to reopen in July but Marston's said the timing was uncertain.

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