Investing.com -- Shares of Marston’s PLC (LON:MARS) climbed 7.8% on Tuesday after the company reported strong interim results, demonstrating significant strategic progress and a confident outlook for the full year.
The U.K.-based pub operator announced its results for the 26 weeks ended 29 March 2025, which showed a stable total revenue of £427.4 million despite around £50 million in disposals from the previous fiscal year.
The company’s like-for-like (LFL) sales increased by 1.3% in the first half of 2025, and a notable 10.5% growth was seen in the five weeks following the period end. Underlying pub operating profit soared by 20.1% to £63.3 million, compared to £52.7 million in the same period last year.
The improvement was attributed to strong operational delivery and strategic cost-saving measures, including technology-led improvements in labor deployment and procurement efficiency.
Marston’s also reported an underlying profit before tax of £19.0 million, a significant turnaround from a £0.2 million loss in the first half of 2024.
The company has reduced its net debt to £881.1 million, down from £1,160.9 million in the first half of 2024, and has made considerable strategic and operational progress, with guest satisfaction scores remaining high.
Looking ahead, Marston’s expects LFL sales to continue their upward trajectory, bolstered by demand-driving events and strategic initiatives.
The company is confident in delivering recurring free cash flow of over £50 million a year in the near-to-medium term, which will support further investment and deleveraging.
Marston’s is on track to meet the targets outlined at the October 2024 Capital Markets Day, with FY2025 performance expected to be in line with current market expectations.
Jefferies analysts has noted concerns regarding the company’s level of debt and its impact on potential dividends and growth capex, given that bond amortisation payments are expected to consume much of the new £50 million free cash flow per annum target.
Despite these concerns, the valuation is slightly below historical averages, and the equity component of Marston’s enterprise value is about 10%, indicating high sensitivity of the share price to changes in the company’s overall value.