Pub company Marston's has revealed it has moved away from securing city centre pubs, where demand remains volatile.
In its preliminary results for the 52 weeks ended 30 September 2023, the group reported like-for-like sales had increased by 10.1% compared to 2022, while underlying profit before tax rose to £35.5m from £27.7m following "a year of focusing on the core estate".
Marston's said its "well-positioned, predominantly freehold pub estate, with limited exposure to city centres" led to positive momentum in food and drink spend per head, which rose by 8.1% and 8.6% respectively.
The group also trialled a franchise-style model for its food-led managed pubs, which resulted in sales growth significantly exceeding that of the broader food business.
The pub company said it is highly confident it will achieve cost efficiencies of at least a further £3m in full-year 2024 due to savings from energy usage and pub labour.
Marston's added it will not be impacted by the rise in National Living Wage, which is set to increase by almost 10% next April, and expressed optimism around its Christmas bookings, which are "tracking ahead of last year".
The group's new chief executive, Justin Platt, will be taking on the role from 10 January 2024.
William Rucker, chair of Marston's, said: "We anticipate an improving outlook in which cost headwinds are largely abating and like-for-like sales are up over 7% since the year end. This, together with the actions we have taken this year to drive further efficiencies, leave us confident that Marston's remains well-placed to continue to outperform and to grow revenue, margin and profitability."
Julie Palmer, partner at Begbies Traynor, added: "Like many leisure businesses, the pub giant will also be impacted by the National Living Wage increases set out in the Autumn Statement. It's true that Marston's fixed energy costs, along with its lower price point when compared to many in the sector, should allow it to mitigate the full effect of this change, but it's still another concern for the group."
Marston's operates an estate of over 1,400 pubs and employs roughly 11,000 people.