Marston’s said annual profit would beat expectations, extending a run of strong growth, as its new pub formats and tighter costs offset broadly flat sales.
The pub operator, which runs more than 1,300 outlets, said underlying pre-tax profit for the year to 26 September would exceed the top of market forecasts, marking a third consecutive year of significant growth and more than tripling profits from 2023.
Its margins widened by around one percentage point, helped by cost control and its pub operating model.
A key driver of Marston’s success was the shake-up of its pub formats, led by a concept called Grandstand, which aimed to turn pubs into sports and events venues.
Martson’s said it was generating returns on investment above 30% and lifting sales at converted pubs by around 30%.
Having converted 60 pubs this year, Marston’s plans at least 100 more in the coming year. Like-for-like sales, which fell 1.2% over the year, improved to broadly flat in the final quarter, helped by stronger summer trading and the World Cup.
The company has also continued to cut its debt, which has roughly halved since 2023 to about 4.2 times earnings. Building on this progress, it said it intends to announce a shareholder returns programme, likely share buybacks, at its full-year results.
Justin Platt, CEO of Marston’s PLC, said: “We have delivered a third consecutive year of significant profit growth, margin improvements and strong recurring free cash flow. Our differentiated pub formats continue to drive excellent returns, and our guest satisfaction scores show that we continue to delight our customers – a credit to our talented, hard-working teams.
“Our progress over the last three years shows the momentum we have as a high margin, highly cash generative local pub company, with profits substantially up and debt levels halved. With clear strategic priorities and our new format conversion programme expanding to at least 100 pubs next year, we enter the new year well set to drive our next phase of growth.”