- Like-for-like festive sales up 11%
- Full-year profit reiterated
- Medium-term targets reaffirmed
Pubs group Marston’s (MARS) reported exceptionally strong festive trading with like-for-like sales growth of 11.1% between 22 December and 4 January and said it is well positioned to deliver full-year pre-tax profit in line with consensus analyst expectations.
The shares dropped 1.4p or 3.3% to 40.9p, reflecting some profit-taking after a strong run which has seen the shares outperform peers and the FTSE-All Share index.
CEO Justin Platt commented: ‘I am pleased to report a solid first quarter performance for Marston’s, with a particularly strong key festive trading period, achieving record sales on Christmas Day.
‘We are excited for the year ahead as we build on this performance through the successful execution of our refocused strategy, driving revenue growth through event driven marketing and the roll out of our differentiated pub formats.’
SOLID QUARTER
Total group retail sales for the 16 weeks to 18 January were up 3% driven by growth in both food and drink sales. On a like-for-like basis sales were up 2%, reflecting the stormy and cold weather in November and January offsetting the strong festive period.
Platt said the business remains well positioned to deliver underlying pre-tax profit for the year ending September 2025 in line with market expectations of £68.3 million, as well as guidance set out at the Capital Markets Day in October 2024.
This includes delivering revenue growth ahead of the market, expanding the EBITDA (earnings before interest, tax, depreciation, and amortisation) margin by 2% to 3% and generating over £50 million of annual recurring free cash flow.
Marston’s defines free cash flow is as cash flow minus capital expenditures, before debt repayments and excluding income from disposals.
EXPERT VIEW
Shore Capital analyst Greg Johnson has maintained his 2025 pre-tax profit estimate of £66 million and believes there are ‘significant’ opportunities in further deleveraging and investment.
Stripping out Christmas and poor weather effects, Johnson estimates the underlying trend in like-for-like sales growth was between 3% and 4%, which is consistent with his full-year assumptions.
‘Looking forward, although the macro backdrop is arguably more challenging, the second half in particular should benefit from softer comparatives over the summer’ added Johnson.
