Marston’s Shares Jump as LFL Sales Growth ‘Ahead of Market’

Marston's (LON: MARS) saw its shares surge over 6% in early Tuesday trading after reporting strong financial results for the 52 weeks ended September 28, 2024.

The company revealed that total revenue increased by 3% to £898.6 million, driven by a 4.8% increase in like-for-like (LFL) sales. Underlying pub operating profit surged 17.9% to £147.2 million, benefiting from strong top-line performance and operational efficiencies.

Underlying EBITDA margin expanded to 21.4%, and the underlying operating margin improved to 16.4%. The company generated a robust recurring free cash flow of £43.6 million and significantly reduced net debt to £883.7 million.

Marston's underlying pre-tax profit came in at £42.1 million, representing growth of 64.5%, while its statutory profit before tax was £14.4 million. In 2023, the company posted a statutory loss before tax of £30.6 million.

The sale of a 40% stake in Carlsberg Marston's Brewing Company (CMBC) was a significant milestone for Marston's, allowing the company to focus on its core pub business and enhance its financial flexibility.

The company's refreshed strategy, outlined at its Capital Markets Day in October, aims to build a high-margin, cash-generative local pub company.

Looking ahead, Marston's is optimistic about its outlook, with positive current trading and strong Christmas bookings.

Christmas bookings are said to be tracking ahead of last year, “with many venues securing high levels of reservations.” However, the company noted that the UK Government's Autumn Budget “puts some additional pressure on costs, but the overall package of measures is considered manageable in the context of the Group's CMD targets.”

The company is confident in its ability to drive efficiencies and deliver sustainable growth. Justin Platt, CEO of Marston's, stated: “This single-minded focus, combined with our rejuvenated strategy, is already showing in strong financial results.

“We've delivered like-for-like sales growth ahead of the market, significant margin improvements and robust cash flow, while current trading is encouraging with Christmas bookings already ahead of last year.”