Marston's shares surge as pub revamp lifts margins, draws customers

(Reuters) -Marston's said on Tuesday its turnaround strategy is delivering results, with refreshed pubs helping lift annual margins and attract more holiday bookings in the new fiscal year, sending the British company's shares up more than 20%.

The group, which operates more than 1,300 pubs across the UK, said it was heading into the crucial holiday season with Christmas bookings 11% ahead of last year after beating profit expectations for the year ended September 27.

With British consumers becoming more cautious about discretionary spending amid political and economic uncertainty, Marston's said it is focusing on its upgraded menus and refreshed pub settings to attract customers while tightly managing costs and staffing.

The Wolverhampton-based company expects its strategy to strengthen margins and cash flow to fuel further pub upgrades in 2026.

"Matching the right people to the right place and matching demand with the supply of labour is something that we're going to be relentlessly focused on going forward," CFO Stephen Hopson told analysts on a post-earnings call.

Slowing sales have plagued the British hospitality industry as companies contend with weak consumer sentiment and the possibility of rising costs from higher taxes and wages in the upcoming budget on Wednesday.

Marston's is also banking on events such as the 2026 FIFA World Cup and its own promotions to drive footfall at its sites.

The company posted an underlying pretax profit of 72.1 million pounds ($94.54 million) for fiscal 2025, while analysts were expecting 69.9 million pounds, according to a company-compiled consensus.

Shares in the British pub and hotel operator rose as much as 21.4% to 60.7 pence by 1250 GMT.

($1 = 0.7627 pounds)

(Reporting by Ankita Bora and Pushkala Aripaka in Bengaluru; Editing by Mrigank Dhaniwala and Tasim Zahid)