11th Oct 2023 15:24
(Alliance News) - Marston's PLC is set for a rosy future with annual profit between financial years 2022 and 2025 expected to double, according to Shore Capital research analyst Greg Johnson.
The Wolverhampton, England-based Marston's operator of 1,440 pubs Wednesday said retail sales rose 11% in its recent financial year ended September 30, after a wet mid-summer in the UK gave way to a fine September.
The company's sales moment remains robust, with its food-led franchise model of 19 managed pubs proving successful, Shore said.
Net debt as at September 30 stood at GBP1.18 billion, down GBP31 million from a year ago. The company is targeting debt reduction of GBP60 to GBP70 million in the current financial year 2024.
Shore said: "For FY24F, we expect the resilient trading, cost savings and underlying momentum to lead to material upgrades to our operating profit estimates. We anticipate increasing our operating profit estimate by around GBP6 million to towards GBP155 million (a more than 10% increase to earnings per share), with the around GBP20 million year-on-year improvement including cost savings, lower energy costs, investment-led growth and increase contribution from Carlsberg Marston's Brewing Co."
For the near-term future, Shore expects Marston's annual adjusted pretax profit in financial 2023 to rise 34% to GBP37.0 million from GBP27.7 million a year prior, and to climb to GBP49.5 million in financial 2024 and to GBP59.7 million in financial 2025 — growth of 21% from the expected financial 2024 and more than doubled compared to financial 2022.
Revenue is set to grow 5.2% to GBP841.5 million in financial 2023 from GBP799.6 million a year prior and to further climb to GBP846.0 million in financial 2024 and to GBP875.6 million in financial 2025.
Shore expects Marston's not to declare any dividends in the foreseeable future.
Marston's will release its full financial 2023 results on December 5.
Marston's shares fell 2.3% to 28.20 pence each on Wednesday afternoon in London.
Shore has a 'Buy' rating for Marston's
By Tom Budszus, Alliance News reporter
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