FINANCIAL HIGHLIGHTS
1. Results from continuing operations
INVESTMENT CASE
An investment case for a reliable growth company
We are a leading pub business with an estate of 1,339 pubs, supported by over 10,000 employees and 753 Pub Partners, and our vision is to be the UK’s leading local pub company. Our Purpose is to offer our guests the best experience and locations for Shared Good Times. This is underpinned by a clear strategy to create a high-margin, highly cash-generative model based on differentiated formats and a brand portfolio that is naturally balanced to appeal across a range of consumers.
Powerful value drivers for growth
Our investment case is based on our five key value drivers:
- 1Execute a market-leading pub operating model
- 2Capex to create differentiated pub formats
- 3Digital transformation
- 4Expansion of Managed and Partnership models
- 5Leveraging Marston's synergies in targeted acquisitions
Differentiated to win in a growing market
- Suburban dominated locations
- Flexible estate to evolve at pace
- Pubs with scope for multi-occasions
- Expertise in running local pubs
Sustained free cash flow generation
Like-for-like revenue growth faster than the market, sustained capex and further operating and cost efficiencies will deliver £50 million+ of recurring free cash flow in the near term.1
1. Market is forecast to grow at 3% CAGR, according to Mintel. Free cash flow is cash flow after capex before debt repayments and excluding disposals. Free cash flow is defined as cash flow after capital expenditure, interest and tax but before debt repayments and disposals.
Clear and consistent metrics to track success
Near to medium-term targets:
- Revenue growth ahead of the market
- EBITDA margin expansion of 200-300 basis points, beyond FY2024
- £50m+ recurring free cash flow
- >30% incremental returns on investment capex
OUR STRATEGY
Shared Good Times
Our vision is to be the UK’s leading local pub company
Our strategy is to create a high-margin, highly cash-generative local pub company based on differentiated formats and a brand portfolio that is naturally balanced to appeal across a range of consumer segments.
Our strategy is centred around five key value drivers, enabling us to deliver on our long-term target of becoming the UK’s leading local pub company. These value drivers will leverage the strength of our market-leading pub operating model, increasing revenue and driving efficiencies, whilst building the basis of a reliable growth company.
200 - 300 bps
Our strategy and business model are underpinned by three core enablers which support and help drive our strategic priorities and reflect Marston’s unique culture and how we operate responsibly and ethically.
1.Execute a market leading pub operating model
- We are focused on relentless execution and delivering on our market-leading pub operating model by balancing revenue growth, cost efficiency, and guest satisfaction across our estate.
- We aim to set the standard in operational excellence, ensuring high-quality service, effective cost management, and an outstanding guest experience.
CASE STUDIES
Great guest satisfaction
The Turing Key in Bletchley is an excellent example of setting standards for operational excellence and great guest satisfaction.
2.Capex to create differentiated pub formats
- We have identified the opportunity to tailor our pub portfolio into five well-defined pub formats that meet consumer needs across different segments.
- We expect these unique propositions will drive increased consumer penetration as we roll out these formats across our estate.
3.Digital transformation
- We are a people-led business but we believe there is significant opportunity to complement what we do with technology.
- To drive revenue, we will improve the guest journey and plan to deliver personalised, data-led interactions over time. On costs, our digital strategy focuses on labour productivity tools and AI to optimise stock management.
4.Expansion of Managed and Partnership models
- One of our biggest strengths is the balance between our different management models, particularly the balance between Managed and Partnership.
- These formats are incredibly flexible and a key means of delivering our five distinct consumer-focused formats and our market-leading operating model.
- Our managed pubs are owned and operated by Marston’s employees. As well as offering great guest experiences, they are our engine room of innovation and have a critical role to play in our format rollout.
- Our Partnership pubs are operated by self-employed, entrepreneurial licensees. The Partnership model enables our Pub Partners to share the risks and manage some of the biggest costs involved in running a pub, such as utilities, whilst taking a weekly share of the total revenue. All of our Pub Partners are supported by our Pub Support Centre, offering expert guidance and support in core areas.
5.Leveraging Marston’s synergies in targeted acquisitions
- Over time, we aim to leverage Marston’s significant operational strengths, established brand, and scale to unlock synergies in targeted acquisitions.
- By applying our proven and market-leading pub operating model and integrating digital capabilities, we expect to drive synergies from acquisitions that align with our strategic vision.
SUSTAINABILITY
Shared responsibility
Our sustainability approach aims to ensure we are a responsible and resilient business through identifying, assessing and managing our environmental and social impacts. As a local pub company, with a national reach, we’re uniquely placed to help make, and shape positive change for all our stakeholders, including the planet our most fragile stakeholder.
As part of the review of strategy, we also revisited our sustainability strategy to ensure it remains connected to the core of what we do, while supporting the Company’s vision and purpose. Our people strategy and commitment to operating safely and sustainably are two of the three key enablers and we remain committed to doing more in our four priority areas: Planet, People, Product and Policy. These priority areas, or 4P’s, are the central thread of our sustainability strategy with a clear connection to our purpose and where we believe we can have the biggest impact.
Our 2024 Impact Report, previously known as our Insight Report, is a statement of our aims, targets and intentions, and includes our focus areas and the stories to support our initiatives. Included in our report are details of the progress against our targets and the activities from each of the four pillars during the year.
Our responsibility pillars
Our Planet promise is to operate our business and supply chain more efficiently to reduce our energy consumption, emissions and water use and to reduce our impact on the environment by reducing or repurposing our waste and encourage our suppliers to do the same.
For our most fragile stakeholder, we want to operate our business and supply chain more efficiently to reduce our energy consumption, carbon emissions and water use. We also want to reduce our impact on the environment by reducing or repurposing our waste and encourage our suppliers to do the same.
KEY TARGETS
- To achieve Net Zero by 2040
- To promote energy from renewable or self-generated sources
- To reduce the volume of water we consume across our estate every year
- To increase reclaimed rates of used cooking oil
CASE STUDIES
Our EV infrastructure
The installation of EV chargers at our pubs, inns and at our Pub Support Centre is an area where we can support our guests, people and suppliers to make the transition to lower carbon transport.
Our sustainable Pub Support Centre
St Johns House, our Pub Support Centre (PSC) in Wolverhampton, has been awarded Sustainability Champion status by the British Institute of Innkeeping (BII).
Our People promise creates a culture of engagement, support and development that attracts, retains and supports the best people from diverse backgrounds. We support our People to ‘come as you are’, building an inclusive culture among our employees, Partners and suppliers which reflects the diversity of our guests and communities.
At Marston’s we believe that people make our pubs. We embrace the diversity of our employees, Pub Partners, guests and our local communities, and strive to provide equitable opportunities for growth and social mobility. We want to create an inclusive culture that engages and inspires, and work with charitable partners that share our core values.
KEY TARGETS
- To achieve an employee engagement score of 8 or more
- Striving towards being an inclusive employer that attracts and appeals to diverse, disadvantaged, and vulnerable groups of people and that nurtures and develops people joining from all backgrounds.
- We aim to assess and enhance our performance across diversity and inclusion, and health and wellbeing. We will use scores and feedback from employee engagement surveys to inform and develop our agenda.
CASE STUDIES
Excel programme and the Lock Inn, HMP Liverpool
Excel is our ex-offender recruitment programme. Working closely with the MOJ, the Prison Service and several charities (including those tackling homelessness), we support those released from prison back into work.
The Marston’s Mile with the Burnt Chef Project
This year, we have continued our partnership with the Burnt Chef Project, who provide education and resources to tackle mental health stigma and work to ensure the hospitality industry is healthier and more sustainable by focusing on people’s wellbeing first.
Our Product promise is to deliver quality food and drink to our guests, that is ethically sourced and in a way which reduces food waste and emissions.
We want to ensure that the food and drink that we source to serve to our guests in our pubs is responsibly sourced with as little impact on the planet as possible. We also have our guests interests in mind when we provide information about the dishes we serve, to help them make balanced food choices that meet their lifestyles and dietary preferences.
KEY TARGETS
- 50% reduction in food waste by 2030
- To enhance the authentication of our supply base against our charters and policies
- To provide guests with access to information and products that meets their lifestyle and dietary preferences
CASE STUDIES
Reducing food waste with Too Good To Go
Making further progress on our mission to reduce food waste across our business, our incredible Community Carvery sites have made a monumental impact this year through their partnership with Too Good To Go (TGTG).
Training our team effectively on allergen management procedures
This year on our interactive learning platform, we have launched an interactive learning module to support all our teams' understanding of the importance of allergen management within the guest journey.
Our Policy promise is to support the development of our business in delivering its objectives by promoting high standards of governance, risk management and transparency.
The way in which we do business is embedded into our governance framework which is communicated to our People, Partners and suppliers through pragmatic policies and risk management frameworks, that reflect our culture and values. Through regular reporting, we are able to share our progress and demonstrate transparency around our ESG practices and policies.
KEY TARGETS
- All of our pubs to be 5* EHO
- Maintain FTSE4Good certification
- To grow the number of suppliers sharing data with us on Sedex
CASE STUDIES
‘High 5’ Safety Courses
Our safety courses support the understanding of the measures involved in achieving a 5* food hygiene rating in our pubs, a key enabler to our strategy and a KPI. It helps to develop the quality of kitchen compliance and develop the competence of each team member to drive the EHO score higher.
Introducing our Family Leave Policy
We launched our updated and improved family leave policy, encompassing primary and secondary caregiver leave, marriage, fertility leave and flexible working. We understand that the journey to parenthood is unique for each person and want our policies to reflect the flexibility that all families need.
