Marston's reports strong results, shares jump

Investing.com -- Shares of Marston’s Plc (LON:MARS ) jumped over 7% on Tuesday after the company reported a strong set of results, reflecting strong growth across key metrics and strides in operational efficiency. 

The pub operator, which has sharpened its focus on hospitality following the sale of its brewing stake, reported a 64.5% increase in underlying profit before tax, reaching £42.1 million for the year ended September 2024.

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

The growth was attributed to a balanced improvement in both food and drink sales, signaling resilient consumer demand. 

The company also reported a marked improvement in profitability, with its underlying operating margin increasing by over 200 basis points to 16.4%, driven by efficiencies in energy, property management, and operational simplification.

Another key highlight driving investor confidence was the company’s progress in reducing debt. Net debt, excluding IFRS 16 lease liabilities, fell sharply by £301.7 million to £883.7 million, aided by the sale of its stake in Carlsberg (CSE:CARLb ) Marston's Brewing Company and robust free cash flow generation. 

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

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

The company has also begun piloting a two-room pub format designed to cater to both family diners and pub regulars, which has shown promising early results. 

The company noted positive trading momentum, with like-for-like sales in the first six weeks of FY2025 up 3.9%. 

Christmas bookings are also tracking ahead of last year, further underscoring confidence in sustained consumer demand despite cost pressures highlighted 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 at Marston’s Plc.

Source: Investing.com