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1. Company Snapshot

1.a. Company Description

Marston's PLC operates managed, franchised, tenanted, and leased pubs, bars, restaurants, and accommodations in the United Kingdom and internationally.The company operates through approximately 1,500 bars and pubs; and approximately 1,836 rooms.It is also involved in the property management; telecommunications; and insurance businesses.


The company was formerly known as The Wolverhampton & Dudley Breweries PLC and changed its name to Marston's PLC in January 2007.The company was founded in 1834 and is based in Wolverhampton, the United Kingdom.

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1.b. Last Insights on MARS

Marston's PLC has seen a recent uptick, driven by a positive earnings release. The company's strategic focus on its core pubs and hospitality business appears to be bearing fruit. A recent trading update highlighted improving sales trends, with like-for-like sales growth reported across its pub estate. Furthermore, Marston's has been actively managing its portfolio, with a focus on optimizing its asset base. According to recent reports, the company's efforts to enhance operational efficiency have been well-received by investors.

1.c. Company Highlights

2. Marston's Strong FY 2025 Results Driven by Format Innovation and Operational Efficiency

Marston's reported a profit before tax of GBP 72 million for FY 2025, representing a 71% year-on-year growth, driven by a total revenue of GBP 898 million with a like-for-like growth of 1.6%. EBITDA was up 7% to GBP 205 million, with a margin expansion of 140 basis points to 22.8%. Earnings per share (EPS) came in at 0.021, beating analyst estimates of 0.015. Cash flow was GBP 53 million, ahead of the target of GBP 50 million, demonstrating the company's ability to generate cash.

Publication Date: Nov -30

📋 Highlights
  • Strong Profit Growth: Profit before tax surged to GBP 72 million, a 71% year-on-year increase.
  • Cash Flow Exceeds Target: Generated GBP 53 million in cash flow, surpassing the GBP 50 million target.
  • New Pub Formats Drive Growth: Launched 31 new formats, delivering 23% revenue uplifts and over 30% ROIC.
  • EBITDA Expansion: EBITDA rose 7% to GBP 205 million, with margin expansion of 140 basis points to 22.8%.
  • Deleveraging Progress: Reduced net debt-to-EBITDA to 4.6x from 5.2x, targeting below 4x pre-IFRS 16 by 2026.

Operational Highlights and Format Innovation

The company's new pub formats, including Grandstand and Two Door, have been a significant driver of revenue growth, with 31 new formats launched during the year. These formats have performed strongly, driving revenue uplifts and high returns on invested capital (ROIC). The company plans to accelerate the rollout of these formats, with 50 launches focused on Two Door and Grandstand in 2026.

Margin Expansion and Cost Management

Marston's achieved a 140 basis point margin expansion in 2025, driven by labor efficiency gains, gross margin improvements, and revenue management. The company expects EBITDA margins to increase in 2026, driven by continued labor efficiency gains and gross margin improvements. With a cash tax payment expected to approximately double to GBP 10 million in 2026, the company's ability to manage costs will be crucial.

Outlook and Valuation

Marston's expects further progress in 2026, with like-for-like sales tracking in line with last year and Christmas bookings up 11%. The company plans to accelerate its format growth engine with at least 50 refurbishments and expects to deliver another year of GBP 50 million in recurring free cash flow. With a P/E Ratio of 9.22 and an EV/EBITDA of 8.06, the market appears to be pricing in a reasonable level of earnings growth. The company's ROIC of 7.15% and ROE of 6.65% indicate a decent return on capital, but the Net Debt / EBITDA ratio of 6.18 may be a concern.

Growth Opportunities and Risks

The company sees an opportunity for growth across its estate, with around 75% of its 1,300 pubs potentially benefiting from reallocation into one of its five formats. However, the company faces risks, including a potential increase in National Living Wage and changes to labor costs or business rates. With a strong balance sheet and a focus on delivering sustainable shareholder value, Marston's is well-positioned to navigate these challenges.

3. NewsRoom

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Shareholders in Marston's (LON:MARS) are in the red if they invested five years ago

Nov -22

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Marston's PLC (LON:MARS) is a favorite amongst institutional investors who own 71%

Aug -14

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Why Marston's PLC (LON:MARS) Could Be Worth Watching

Jul -16

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Marston's First Half 2025 Earnings: EPS Beats Expectations, Revenues Lag

May -15

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Marston’s to power 120 pubs in UK with solar energy

May -13

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Pub group Marston’s returns to profit after cost cuts and drawing in punters

May -13

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Global's Undervalued Small Caps With Insider Activity In March 2025

Mar -18

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Marston's PLC (LON:MARS) is largely controlled by institutional shareholders who own 72% of the company

Mar -07

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.53%)

6. Segments

Outlet

Expected Growth: 2.5%

Marston's PLC's 2.5% outlet growth driven by strategic expansion into high-demand locations, increased focus on premium offerings, and effective cost management. Additionally, investments in digital transformation and customer experience enhancements contribute to the growth, while a strong brand portfolio and diversified revenue streams provide a solid foundation for continued expansion.

Wholesale

Expected Growth: 3.5%

Marston's PLC's wholesale segment growth of 3.5% is driven by increasing demand for premium beers, expansion into new markets, and strategic partnerships with pub chains. Additionally, the company's focus on craft beer and cider offerings, as well as investments in digital platforms, have contributed to the growth.

Rental

Expected Growth: 2.0%

Rental growth of 2.0% from Marston's PLC is driven by increasing demand for pubs and restaurants, expansion into new locations, and strategic partnerships. Additionally, the company's focus on premiumization, digitalization, and cost savings initiatives contribute to the growth. Furthermore, the UK's growing food and beverage market, coupled with Marston's strong brand portfolio, also support the rental growth.

7. Detailed Products

Pubs

Marston's PLC operates a chain of pubs across the UK, offering a range of food, drinks, and entertainment options.

Hotels

Marston's PLC offers a range of hotel accommodations, from budget-friendly options to luxury stays, across the UK.

Brewing

Marston's PLC brews and distributes a range of beers, ales, and ciders to pubs, bars, and restaurants across the UK.

Food and Drink

Marston's PLC offers a range of food and drink options, including meals, snacks, and beverages, in their pubs and hotels.

Events and Conferences

Marston's PLC offers event spaces and conference facilities in their hotels and pubs, suitable for weddings, meetings, and other events.

8. Marston's PLC's Porter Forces

Forces Ranking

Threat Of Substitutes

Marston's PLC operates in the pub and brewery industry, where substitutes are limited. However, the rise of at-home drinking and alternative leisure activities poses a moderate threat.

Bargaining Power Of Customers

Marston's PLC has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong brand portfolio and wide range of products limit customers' ability to negotiate prices.

Bargaining Power Of Suppliers

Marston's PLC relies on a network of suppliers for raw materials, ingredients, and services. While the company has some bargaining power due to its scale, suppliers of certain ingredients, such as hops and barley, may have some negotiating power.

Threat Of New Entrants

The pub and brewery industry has high barriers to entry, including significant capital requirements, complex licensing regulations, and established brand recognition. These barriers limit the threat of new entrants.

Intensity Of Rivalry

The pub and brewery industry is highly competitive, with many established players competing for market share. Marston's PLC faces intense rivalry from other major pub operators and breweries, which can lead to pricing pressure and advertising wars.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 65.82%
Debt Cost 10.03%
Equity Weight 34.18%
Equity Cost 11.34%
WACC 10.48%
Leverage 192.59%

11. Quality Control: Marston's PLC passed 0 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Fuller Smith & Turner

A-Score: 5.2/10

Value: 7.8

Growth: 5.8

Quality: 3.4

Yield: 5.6

Momentum: 1.0

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Young's

A-Score: 4.6/10

Value: 5.6

Growth: 4.0

Quality: 3.1

Yield: 3.8

Momentum: 3.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Wetherspoon

A-Score: 4.4/10

Value: 7.4

Growth: 5.1

Quality: 2.7

Yield: 1.2

Momentum: 3.5

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Marstons

A-Score: 4.3/10

Value: 9.1

Growth: 5.7

Quality: 3.1

Yield: 0.0

Momentum: 3.5

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
HelloFresh

A-Score: 3.2/10

Value: 8.9

Growth: 5.3

Quality: 3.4

Yield: 0.0

Momentum: 1.0

Volatility: 0.7

1-Year Total Return ->

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Stock-Card
Elior

A-Score: 2.8/10

Value: 7.1

Growth: 3.2

Quality: 1.9

Yield: 0.0

Momentum: 2.0

Volatility: 2.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

0.6$

Current Price

0.6$

Potential

-0.00%

Expected Cash-Flows