Marston's shares soar as profits rise amid bumper Christmas bookings
Martson's shares surged on Tuesday after the group unveiled a sharp rise in profits, thanks to cost-cutting efforts and investment in its pub estate. The London-listed pub group posted a 71.3 per cent rise in pre-tax profit to £72.1million for the year to 27 September.Total revenues were broadly flat year-on-year at £897.9million, as 'revenue management initiatives' offset the impact of around £50million worth of pub disposals in the prior period.The group has invested £61.2million over the last year to launch new pub formats and wider estate upgrades.Marston's completed 31 format conversions this year, resulting in average revenue uplifts of 23 per cent and return on invested capital of over 30 per cent, according to the firm.'The roll-out of our pub formats is building momentum, and we plan to accelerate this growth engine this year with at least 50 new format launches,' it added. On the up: Marston's unveiled higher annual profits on TuesdayMarston's toasted a second consecutive year of 'significant profit growth and margin expansion'. The business, which has more than 1,300 pubs, said its upturn in profit was driven by 'progress' on like-for-like sales, 'contribution from new formats, disciplined cost control, and reduced interest costs'. It said Christmas bookings were 'strong' and up 11 per cent from the same point a year ago. The business said it was 'well positioned' for a strong Christmas period and 2026 as it looks ahead to the 2026 World Cup football tournament. Shares in the group rose 10.6 per cent or 5.30p to 55.30p on Tuesday, having risen over 42 per cent in the last year. Like-for-like sales at managed pubs rose 1.6 per cent, outperforming the market, with growth of 2.2 per cent for food and 0.3 per cent for drink.Recurring free cash flow of £53.2million was reported, ahead of its £50million capital markets day target.Net debt excluding lease liabilities fell to £837.5million, down from £883.7million a year ago, and down nearly a third since 2022. Margins rose to 22.8 per cent from 21.4 per cent and the business saw a 16.5 pern cent drop in interest costs. Like-for-like sales for the eight weeks to 22 November were said to be tracking in line with the previous year. Marston's shakes off higher labour costs On absorbing tax hikes and extra costs, the business said it was adopting the 'Right People, Right Time' labour model offsetting National Insurance and minimum wage increases, demonstrating ability to absorb external cost pressures and protect margins; with further opportunity ahead.'Justin Platt, chief executive of Marston's said: 'We've delivered another strong year ahead of plan, executing on our strategy to be a high-margin, highly cash-generative local pub company. 'For the second consecutive year, we've delivered significant growth in profit, margin and free cash flow, underlining the strength of our market-leading pub operating model and the outstanding work of our teams.'He added: 'We enter 2026 with significant momentum and confidence in our ability to keep driving growth, while delivering great experiences for our guests and creating sustainable value for our shareholders.'Dan Lane, lead analyst at Robinhood UK, said: 'On the face of it, flat revenues might be a worry but there’s a lot of positivity under the bonnet with profits and margins up, and spending plans in motion ahead of the festive season and a big year for footie fans. 'Crucially, these "format conversions" are boosting takings and are more than justifying themselves - the timing here could be a stroke of genius, with consumers having to choose wisely where to spend their hard-earned cash and clearly seeing something they like. 'Free cash flow topping the £50million target is a good sign, as is the reduced leverage ratio. 'Chipping away at the debt pile pint by pint shows progress but it’s still uncomfortably high - however, for now, as long as refurbs carry such promise, it looks like Martson’s is funnelling cash into all the right areas.' DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
