Pub group Marston’s (MARS) said strong trading had continued since the end of September with like-for-like sales up 7.4% compared with last year while Christmas bookings were also ahead.

The shares were unchanged at 31p, leaving them around 22% below where they started the year and 71% below pre-pandemic levels.

Marston’s pointed to strong booking momentum as evidence that, despite economic pressures, people still wanted to go out and celebrate in a pub.

‘Pubs have historically demonstrated their resilience as an affordable treat and there is no discernible evidence in our trading performance to suggest that there has been a material change to consumer behaviour’, the firm commented.

HOW DID THE BUSINESS PERFORM?

For the 52 weeks to 30 September, sales increased 9% to £872 million and pub operating profit was 8% higher at £124.8 million. Underlying operating margins were flat at 14.3% despite significant cost pressures, showing a resilient performance.

Marston’s profit share of its Carlsberg (CARL-B:CPH) brewing joint venture jumped to £9.9 million from £3.3 million last year, and the company received £21.6 million of dividend income.

Net debt fell by £34.4 million to £1.18 billion, while the company generated £54.5 million from non-core disposals with proceeds ahead of book value.

Looking forward, chairman William Rucker commented: ‘We anticipate an improving outlook in which cost headwinds are largely abating and like-for-like sales are up over 7% since the year end.

‘This, together with the actions we have taken this year to drive further efficiencies, leaves us confident that Marston's remains well-placed to continue to outperform and to grow revenue, margin and profitability.

‘We look forward to welcoming Justin Platt, who joins the Group as CEO in January. The business is in good shape and well-positioned to take advantage of the future opportunities open to us to create value for our shareholders under his stewardship.’

WHAT ARE THE EXPERTS SAYING?

Julie Palmer, partner at Begbies Traynor, observed: ‘It’s happy hour at Marston’s after the pub company delivered double-digit like-for-like sales growth and edged closer to its target of £1bn in sales this morning.

‘For now, Christmas party season will help the beloved pub group continue to deliver and it’s good to see the cost-of-living crisis isn't impacting bookings over this vital period.’

Shore Capital leisure analyst Greg Johnson added: ‘Given the in-line results, continued robust trading at the start of the year and further cost efficiencies, we would not expect much change to our FY24F profit before tax estimate of circa £55m (EPS: 7p).

‘With current trading resilient, ongoing margin improvement and deleveraging targets, we see the valuation normalising over time.’

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