Marston's PLC

FY25 revenue was GBP 898 million, reported as broadly flat year-on-year, with like-for-like revenue growth of 1.6% and a negative about GBP 40 million impact from pub disposals. EBITDA rose 7% to GBP 205 million, with margin up 140 basis points to 22.8%; operating profit increased 8.6% to GBP 159.9 million; and underlying profit before tax climbed 71% to GBP 72 million. Recurring free cash flow was GBP 53.2 million, up 22% year-on-year and ahead of the GBP 50 million target. Net debt excluding lease liabilities fell to GBP 837.5 million, or 4.6x EBITDA versus 5.2x last year; cash balances were GBP 35.9 million. For FY26, management expects like-for-like sales to remain in line with last year so far, Christmas bookings up 11%, another year of around GBP 50 million recurring free cash flow, CapEx at 7% to 8% of revenue, at least 50 further refurbishments, and continued leverage reduction toward below 4x pre-IFRS 16.

Justin Platt framed FY25 as evidence that the strategy from the Capital Markets Day is working, emphasizing Marston's goal of becoming a high-margin, highly cash-generative local pub company. He highlighted revenue momentum in peak periods, the role of events in driving visits, and strong progress on guest satisfaction, which reached 816. His tone was upbeat and confident, with particular enthusiasm about the 31 format launches and the opportunity to scale them across the estate.

Stephen Hopson focused on execution against financial targets: EBITDA margin rose 140 bps to 22.8%, recurring free cash flow reached GBP 53.2 million, and net debt excluding leases fell GBP 46.2 million to GBP 837.5 million. He said labor productivity was the biggest margin driver, offsetting National Living Wage and National Insurance increases, while food and drink margins, energy savings, and other efficiencies also helped. He also noted CapEx of GBP 61.2 million, or 6.8% of revenue, and said FY26 cash tax payments should roughly double to about GBP 10 million before normalizing later.

Analysts asked why Grandstand and Two Door are the main rollout formats; management said those formats have more testing data and more certainty of return, and Grandstand is especially attractive ahead of a World Cup year. On margins, management said FY26 EBITDA margins should improve again, but not by as much as the 140 bps seen in FY25, with labor optimization and better visibility on food and drink input costs cited as the main opportunities. Questions on cash tax and the budget were answered with guidance that FY26 cash tax should be about GBP 10 million, with no assumptions made on business rates or gaming duty changes and no expectation of further National Insurance changes. Management also said roughly 75% of the estate could potentially suit the new formats, and that managed and partnership sites are performing similarly.