Marston's LFL sales growth outperforms market, net debt reduced

(Sharecast News) - Pub group Marston's said on Wednesday that full-year like-for-like sales outperformed the market and that it had significantly reduced debt. In an update for the 52 weeks to 28 September, the company said total retail sales in the managed and franchised pubs rose 5.8% on the prior year, with LFL sales up 4.8%, outperforming the broader market.

Marston's said that both food and drink occasions had shown good momentum, with food sales particularly encouraging as its "high-quality offering and simplified menus have resonated well with guests".

In the 13 weeks to 28 September, LFL sales were up 3.8%. Marston's said this was a "strong" result despite very wet weather towards the end of the period. Food sales performed exceptionally well, it said, adding that this was a positive indicator for the festive season.

"The strong trading performance and growth ahead of the broader market, coupled with the continued focus on driving cost efficiencies, gives management confidence in delivering pub profitability in line with market consensus for FY24," it said.

Consensus expectations are for underlying pre-tax profit, excluding the contribution from CMBC, of £40.5m.

Marston's also said that it has managed to materially cut its net debt thanks to a strong trading performance, the company's disposals strategy, the sale of its 40% share in CMBC, and the CMBC dividend received for the first half.

It expects net debt for the year to be about £885m, down around £300m on FY23.

Chief executive Justin Platt said: "The strong revenue performance is very pleasing. This reflects the quality of the experiences we are providing for our guests as well as the continued focus and passion of our team.

"This performance, combined with our recent disposal of CMBC puts Marston's in a strong position to drive value for our shareholders as a focused pub business. We look forward to sharing more about the Marston's growth opportunity at our investor day next week."