Marston’s Shares Jump as Pub Group Guides Profit Above Forecasts

Marston’s (LON: MARS) shares jumped about 18.6% in early trading today after the pub operator said its full-year underlying profit will beat the top of market forecasts. The group, which runs more than 1,300 pubs across the UK, also said it intends to announce a programme of shareholder returns, expected to be share buybacks.

The shares traded at around 54.8p at 09:11 London time, against yesterday’s close of 46.2p, after opening at 51.1p. That is about 15.2% above their close on the 11th of September, but still about 9.5% below the first close of 2026, 60.5p on the 2nd of January.

In a trading update at 7am, Marston’s said underlying profit before tax, which excludes one-off items, will land above the top of market expectations. Its own compilation of forecasts puts consensus at £78.4m, within a range of £76.1m to £83.2m.

It is the third consecutive year of significant profit growth. Profit is now more than three times the £25.6m reported for the 2023 financial year, restated to exclude the discontinued CMBC business. The underlying EBITDA margin, operating profit before depreciation as a share of sales, rose by about 100 basis points, or one percentage point.

Like-for-like sales, from pubs open in both periods, fell 1.2% over the year but improved to broadly flat in the fourth quarter, supported by new pub formats, a stronger summer and the World Cup.

Format conversions, refitting a pub as a new concept, are the next lever. Marston’s completed 60 in the year and plans at least 100 next year, focused on Grandstand, with returns on invested capital above 30%. Chief executive Justin Platt said:

We have delivered a third consecutive year of significant profit growth, margin improvements and strong recurring free cash flow.

Justin Platt, CEO, Marston’s PLC

Net debt has fallen to about 4.2 times EBITDA, excluding lease liabilities under accounting standard IFRS 16, roughly half the 2023 level, supported by recurring free cash flow. The board intends to announce a programme of shareholder returns, expected to be buybacks, subject to market conditions.

Full-year results are due on the 24th of November, when the board intends to announce the programme.