News & Updates

Preliminary Results – 3 December 2024

3rd December 2024

LFL REVENUE GROWTH AHEAD OF MARKET, SIGNIFICANT MARGIN EXPANSION AND RECURRING FREE CASH FLOW GENERATION

Marston’s, a leading local pub business with an estate of 1,339 pubs across the UK, today announces its Preliminary Results for the 52 weeks ended 28 September 2024. The period under review commenced on 1 October 2023.

Underlying Statutory / Total
FY2024 FY2023 Change FY2024 FY2023 Change
Total revenue (£m) 898.6 872.3 3.0% 898.6 872.3 3.0%
EBITDA1 (£m) 192.5 170.3 13.0% - - -
Pub operating profit (£m) 147.2 124.8 17.9% 151.7 90.2 68.2%
Profit before tax1 (£m) 42.1 25.6 64.5% 14.4 (30.6) n/a
Total earnings per share1 (pence) 5.2 3.5 48.6% 2.8 (3.0) n/a
NAV per share (£) - - - 1.03 1.01 2.0%
EBITDA margin1 (%) 21.4 19.5 190bps - - -
Underlying operating margin1 (%) 16.4 14.3 210bps - - -
Recurring free cash flow (£m) - - - 43.6 (38.5) n/a
Net debt excluding IFRS16 (£m) - - - 883.7 1,185.4 25.5%

1 - Results from continuing operations

Strong Financial Performance

  • Revenue up 3.0% to £898.6 million (2023: £872.3 million) and LFL sales up 4.8%, consistently outpacing the broader market, with growth in both food and drink sales
  • Underlying pub operating profit up 17.9% to £147.2 million (2023: £124.8 million) with strong topline performance and operational efficiencies delivering improvement in underlying profitability
  • Underlying EBITDA margin increased to 21.4% (2023: 19.5%) highlighting early success in strategic plan to drive margin improvement
  • Underlying operating margin improved over 200bps to 16.4% (2023: 14.3%) driven by energy, property and simplification efficiencies, delivering further cash upside
  • Underlying profit before tax of £42.1 million (2023: £25.6 million), representing growth of 64.5%, and statutory profit before tax of £14.4 million (2023: loss before tax of £(30.6) million)

Positive Cash Flow and Debt Reduction

  • Robust recurring free cash flow of £43.6 million (2023: outflow of £(38.5) million), with operating cash inflow of £207.4 million (2023: £141.2 million), supported by the proceeds from Carlsberg Marston’s Brewing Company (CMBC) sale
  • Material reduction in net debt, excluding IFRS 16 lease liabilities, to £883.7 million, (reduction of £301.7 million (2023: £1,185.4 million)) driven by proceeds from sale of stake in CMBC, robust levels of organic recurring free cash flow generation and disposal proceeds from non-core and unlicensed properties
  • Significant progress on debt reduction has resulted in pre-IFRS 16 debt/EBITDA leverage ratio reducing to 5.2x, from 8.0x in prior year
  • Management committed to a new capital allocation framework outlined at October 2024 Capital Markets Day (CMD)

Operational Update

  • Sale of 40% stake in CMBC marks a defining moment for the Group, creating a pure-play hospitality business wholly focused on running and operating pubs, as well as significantly enhancing financial and operational flexibility
  • The Group’s guest Reputation score increased to 800 (2023: 766) driven by Marston’s expertise in managing local pubs, along with its strategic commitment to delivering exceptional guest experiences and improving the consistency of its offering across the estate
  • Pilot two-room pubs have demonstrated encouraging results. The two-room format is designed to appeal to both family diners and pub regulars, driving growth in consumer penetration and will be the focus of our FY2025 rollout

Strategic Update

  • At its CMD in October, management presented the Group’s refreshed strategy as a leading pure-play hospitality business
  • The strategy is focused on building a high-margin, highly cash-generative local pub company based on differentiated formats and a brand portfolio that is naturally balanced to appeal across a broad range of consumer segments
  • Delivery of the strategy is underpinned by five key value drivers:
  • Executing a market leading pub operating model
  • Targeted investment to create five differentiated pub formats
  • Digital transformation
  • Expansion of managed & partnership models
  • Leveraging Marston’s synergies in targeted M&A
  • Strong FY2024 financial performance and operational progress highlights early success in embedding this strategy across the business, setting firm foundations for the year ahead

Outlook

  • Positive current trading with continued momentum and early progress in embedding strategy across the business
  • Like-for-like sales in the first six weeks grew by 3.9% marking a strong start to the year and demonstrating continued growth ahead of the market1
  • Christmas bookings are tracking ahead of last year, with many venues securing high levels of reservations
  • Autumn Budget on 30 October puts some additional pressure on costs, but the overall package of measures is considered manageable in the context of the Group’s CMD targets
  • We remain very confident in the Group’s outlook and ability to drive efficiencies in its Operating Model

Justin Platt, CEO of Marston’s PLC, commented:

“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.

“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.

“Community-based pubs like ours play an essential role in UK society, backed by our hardworking local teams who give our guests great experiences every single day. All this gives Marston’s a superb foundation for sustainable, long-term growth, and fills us with confidence for 2025 and beyond.”

A copy of the full announcement can be found here.

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