Marston’s Plc Sees Share Surge

Shares of Marston’s Plc (LON:MARS) jumped over 7% on Tuesday after revealing impressive results, highlighting significant growth across key metrics and advances in operational efficiency.

The pub operator, having focused more on hospitality post the sale of its brewing stake, reported a 64.5% rise in underlying profit before tax, totaling £42.1 million for the year ending September 2024.

Revenue increased by 3% to £898.6 million, with like-for-like sales up 4.8%, surpassing broader market trends.

This growth was driven by a balanced enhancement in food and drink sales, reflecting strong consumer demand.

The company also noted a considerable rise in profitability, with its underlying operating margin advancing over 200 basis points to 16.4%, thanks to efficiencies in energy, property management, and operational simplification.

A key highlight boosting investor confidence was Marston’s notable progress in debt reduction. Net debt, excluding IFRS 16 lease liabilities, sharply decreased by £301.7 million to £883.7 million, supported by the sale of its stake in Carlsberg (CSE:CARLb) Marston's Brewing Company and strong free cash flow generation.

The pre-IFRS 16 debt-to-EBITDA leverage ratio significantly improved, declining to 5.2x from 8.0x in the previous year.

Operationally, Marston’s has achieved strong momentum in guest satisfaction, with its Reputation score climbing to 800 from 766 last year.

The company has initiated a pilot for a two-room pub format aimed at both family diners and regular patrons, which has shown promising initial outcomes.

Positive trading momentum continues, with like-for-like sales in the first six weeks of FY2025 rising by 3.9%. Christmas bookings are also ahead of last year’s figures, reinforcing confidence in ongoing consumer demand despite highlighted cost pressures in the recent Autumn Budget.

“2024 has been a defining year for Marston's as we began an exciting new chapter as a leading pure-play hospitality business. The sale of our stake in CMBC has been transformational, enabling us to significantly reduce debt, increase our flexibility and focus on what we do best: running great local pubs,” said Justin Platt, Chief Executive of Marston’s Plc.