Marston'S Plc Unsp/Adr

Good morning, everybody. Thank you for joining us today. Welcome to the Marston's preliminary results for financial year 25. My name is Justin Platt, CEO. And with me, I have Stephen Hobson, our new chief financial officer. We'll take you through our results today. And we'll do that with the following running order. I'll start with the headlines. Stephen will then share the financial results. And I'll then give some insight into the strategic progress we've been making through the year. before wrapping up and taking any questions you might have. So the headlines 2025 has been a very strong year for Marston's. It's been a year when we've been very focused on delivery, delivery of the strategy we outlined a year or so ago at the Capital Markets Day. And the results bear out that the strategy is working and driving real progress for us as a business. With profit before tax of 72 million pounds, That's year on year growth of 71%. And that's on top of the 65% growth we delivered a year ago. And that profit delivery has helped us drive cash flow. So cash flow at 53 million pounds. That's ahead of our 50 million pound target. And it's also earlier than planned. Alongside that, it's really pleasing. We've made great progress with our new pub formats. 31 launches this year. They're performing very strongly for us. and driving big revenue uplifts. It's very clear now that these formats can be a significant growth engine for us in the future. And we've been doing all of that while giving our guests a great time. So record satisfaction scores with a reputation score of 816. So overall, a really good set of results. And it's a set of results that leave us feeling very positive in our outlook going forward. So that's the summary. I'll now hand over to Stephen and he'll take you through the financials.

Thanks, Justin, and good morning, everyone. As Justin said, this is my first set of full year results at Marston's and I joined the business at what is clearly an exciting time for Marston's. As these numbers show, we're making great progress and delivering against our goals with lots more to come. On my first slide, I'd like to begin by looking at some of the key group financial metrics. Total revenue was £898 million, which showed growth of 1.6% on a light flight basis. EBITDA was up 7% to £205 million, with the margin expanding by 140 basis points to 22.8%. That's been driven by good operational discipline, particularly on labour and controlling input costs alongside the revenue growth. As a result of the EBITDA growth and lower finance costs, PBT stepped on significantly. Underlying profit before tax was £72 million, nearly three times where we were just two years ago. And importantly, this has translated into stronger cash generation. Recurring free cash flow was £53 million, which is up 22% year on year and ahead of our £50 million recurring free cash flow target. Finally, we've made real progress on the balance sheet. Net debt has reduced from 5.2 times to 4.6 times EBITDA as we continue to delever. So overall, excellent progress on both profit and cash. Turning now to look at our income statement in a bit more detail on the next slide. As I mentioned, FY25 marked another year of substantial profit growth for Marstons with PBT up 71%. Reported revenue was flat, although this masks the impact of the FY2024 disposal programme, which I'll show on the next slide. I've already mentioned that EBITDA was up 6.5% and that £12.6 million of EBITDA improvement basically flowed through to operating profit, which was up 8.6% to £159.9 million. Net finance costs were significantly lower year on year as a result of ongoing delevering and last year's CNBC disposal, leading to that very significant jump upwards in PBT. And whilst our effective tax rate increased, this simply reflects a return to the UK's headline rate of corporation tax after a period of a lower rate. Together, this income statement shows a stronger and more profitable business with improved earnings quality and stronger margins. Turning to revenue performance, as I've already touched on, revenue for 2025 was £898 million and was broadly flat year on year. But I would like to pick out two points on this chart. First, that the revenue includes a negative movement of about £14 million in relation to the disposal of pubs over FY 2024 and 2025. To put the disposals into context, about £50 million of assets were sold as part of the disposal programme, so it's important to consider that impact when assessing year-on-year revenue progression. And the second point is that our light flight performance continues to be ahead of the market, which grew by 0.7% in the year, with positive contributions across all key categories of drink, food and machines. Turning now to look at margin. A key target for the group outlined at the CMD was to grow our underlying EBITDA margin by 200 to 300 basis points from FY24 levels, giving a target range of 23.4% to 24.4%. And I'm pleased to say that this year we've delivered 140 basis points of margin expansion, achieving total EBITDA margin of 22.8% in the year. Labour productivity gains were the single biggest contributor, supported by the rollout of improved scheduling tools, which Justin will cover in a bit more detail later on. The labour productivity benefits in the year were enough to fully offset the increases in the national living wage and national insurance contributions which came in from April 2025. We also saw benefits from improved food and drink margins, energy savings and other operational efficiencies. These gains were partially offset by inflationary pressures, including those employment cost increases that I mentioned, and some investment in key areas, including more marketing. But overall, we've made real progress embedding cost discipline and delivering margin expansion across the business. And we feel that our EBITDA margins really do benchmark very well across the whole pub sector. We view ourselves as a high margin local pub company, and we see further opportunity to increase the EBITDA margin in FY26 as we move towards our CMD target. Turning now to look at capital expenditure. Total capex for the year was £61.2 million, which is equivalent to 6.8% of revenue. And we're now approaching the 7% to 8% of revenue range that we talked about in the CMD. This is an increase from £46.2 million last year, with the main driver being our pub format conversions, which I'll come back to shortly. Of this total, £53.2 million was in maintenance and other capex deployed across our 1300 strong pub estate. This includes works such as maintenance, estate management, investment in new IT platforms and other items. But I also want to put out a bit more granular information on our pub format conversions, which are very important to our overall growth plans and which Justin will cover in more detail. In the year, we covered 31 conversions to our differentiated formats, which are delivering strong results. Average revenue uplifts were 23% year on year, and EBITDA returns are over 30% to date, in line with our CMD targets. At an average cost of £260,000 a site, we believe these conversions represent excellent value for money. And of course, we've only completed a small number so far in comparison to our estate, so there's a lot more to go at in this space. Clearly, the driver of increasing our capital expenditure is to improve the quality of our estate, so let's turn to that now. On this slide, we show that we ended the year with 1,328 pubs, following the continuation of our estate optimisation strategy. This included a small number of disposals in the T&L estate, as well as conversion of some pubs to the partner model. As a result, the managed and partnership estate consisted of 1,182 pubs, and the T&L estate had 146 sites at the year end. EBITDA per pub increased to 154,000, which, as you can see, is a 28% improvement over the last two years. This uplift reflects both operational improvements and tighter estate management, with gains in both our managed and partnership estate and the remaining T&L pubs. The result is a higher quality, better performing pub estate that's delivering stronger returns at a site level. I think this is a really important slide as it shows how the improvements being made to the business model are feeding through at pub level. Turning now to our cash performance in the year, which was another highlight. The take out from this slide is that we delivered and in fact exceeded our CMD target of £50 million of recurring free cash flow ahead of schedule, with £53.2 million delivered in the period. And how was that delivered? Well, cash from ops increased year on year by 5.6 million, which included the improvements in EBITDA I described earlier. Within that number, we also had a £6 million saving from lower contributions to our DB pension scheme and offsetting that we had a small working capital gain, but it wasn't as large as last year's gain. Finally, we started making cash tax payments again of £5.3 million as our profits improved. And as a small aside, investors and analysts should note that in FY26, we expect to move into the very large company corporation tax regime, which will accelerate our cash tax payments this year. And then in the second line on the chart, we had a £15 million saving on interest offset by £15 million more capex year on year, as I just described, together with lower banking fees. So recurring frat cash was strong and now over £50 million, which we expect to be able to exceed again this year. I also wanted to draw out on this slide that this strong free cash flow is fully absorbed by scheduled debt repayments, £43.8 million of securitised debt repayments and £8.6 million of lease liabilities. Clearly, this does mean that the group is de-levering, as I'll show on the next slide, but also that our cash generation is currently fully utilised. And then just to complete the chart, after other movements in borrowing and disposals, there was a cash outflow of £9.6 million in the year. And I'm now going to return to that progress about delevering in the group. This slide shows the different elements of the group's financing structures and the overall movement in net debt year on year. So starting at the bottom, net debt excluding lease liabilities reduced by £46.2 million to £837.5 million. This takes our net debt to EBITDA multiple, excluding leases, down to 4.6 times from 5.2 times last year. That continues the recent downward trend and reflects the group's stronger cash generation and disciplined approach to capital investment. And then to briefly cover what makes up our financing structures, the largest element shown at the top is the securitization, which provides long-term predictable financing for the group. It does also impose some restrictions, both in terms of the assets that are tied up in the securitization structure and in our ability to move assets and cash around the group. However, these restrictions are manageable at present. Swaps are in place to fix the interest that we pay on this securitised debt. Other lease related borrowings are essentially loans that were raised against other properties in the group outside the securitisation. They were legally structured as sale and lease backs, but where we have the option to buy back the properties at the end of the period for a nominal fee. Therefore, we treat these properties as effective freeholds. And as noted in the slide, we're currently paying interest only on those borrowings. And I've put a new slide in the appendices showing investors how those structures will work over coming years. Our £200 million bank facility was renewed in the year and now extends to July 2027 with relatively low drawings at the year end and cash balances ended the year at £35.9 million. So in summary, we're continuing to deliver at pace while preserving the secure long term funding arrangements in the group. If I then broaden this to look at the group's whole balance sheet rather than just the net debt elements, this slide shows the evolution of our balance sheet and our net asset value per share, which increased to £1.25 this year. And actually, the movements year on year are pretty straightforward. Our balance sheet is underpinned by £2.2 billion of property assets, of which 81% of the estate by number of pubs are effective freeholds. The net book value of those assets increased by over £100 million in the year, reflecting our annual estate reval and also our ongoing investment into the business. Net debt, as I've just described, reduced to £837.5 million, excluding lease liabilities, and lease liabilities were £5.5 million lower. So total net debt was £51.7 million lower year on year. Other liabilities increased by £28.4 million, almost entirely due to an increase of £28.5 million in deferred tax liabilities relating to the upward property revaluation. so overall the property reval with its associated technical tax movements as well as the net cash generation of the group drove 136 million pound increase in their assets which was a 21 increase year on year to 791 million which equates to 1.25 per share given the progress made on the balance sheet i want to finish by looking at our capital allocation framework if i start by saying that this is not a change to our capital allocation policy which remains consistent with what we laid out at the cmd we remain focused on delivering sustainable shareholder value through a disciplined balance of investment in the business, de-levering, and ultimately shareholder returns. That said, there are a couple of updates we wanted to share this morning. On the right-hand side of the chart, you'll see our continued progress on leverage, which, as I mentioned, has reduced substantially. We are pleased with that progress, but would like to see leverage continue to decrease. And today, we're committing to reduce leverage to below four times on a pre-IFRS 16 basis. When we get to that level, we anticipate the start of capital returns to shareholders through dividends, share buybacks or a combination of both. What that looks like will depend on circumstances at the time, including the share price and investor preferences. To be clear, we also expect to see the group continue to deliver below four times even after the recommencement of shareholder returns. We believe this disciplined approach continues to be the right strategy to create and sustain long term value. So to conclude, we've delivered a strong financial performance this year with clear progress on margin, profit and cash flow, and we expect further progress this year. And before I hand back to Justin, I'll briefly touch on five forward looking points. First, we remain confident in the trading outlook for FY26, with light flight sales currently tracking in line with last year and Christmas bookings up 11%. Second, we expect further progress towards our margin target of 200 to 300 basis points of growth versus 2024, following the 140 basis point gain this year. Our format growth engine will be accelerated this year with at least a further 50 refurbishments, and our capex is expected to be within the target range of 7 to 8% of total revenue. And after achieving our CMD target ahead of schedule this year, we expect to deliver another year of £50 million in recurring free cash flow in FY26. And lastly, we've significantly reduced our debt profile over the past couple of years and expect to continue to do so with leverage now at 4.6 times and progressing well towards our sub four times target. So overall, we're delivering against our targets and we remain firmly on track to drive further financial and strategic progress in the year ahead. Thanks very much. And I'll now hand back to Justin.

Thank you, Stephen. So I'll now take you through the progress we've been making as we've implemented our strategy through the year you will remember from the capital markets day we're very focused on being a high margin highly cash generative local pub company and we'll do that with a portfolio of brands that appeal across a range of consumer segments five key value drivers that get us there executing a market leading operating model using CapEx to deliver differentiated formats, unlocking value with digital transformation, expanding our excellent managed and partnership management models, and in time, supporting that with targeted acquisitions. So I'll now deep dive on each of those value drivers to give you a flavor of some of the work that we've been doing. The first one I will spend some time on is the operating model. Really, this is the bread and butter of running a great pub business. It's the balance of revenue growth, cost efficiency, and guest satisfaction. So first of all, I'll talk to revenue. Really good momentum this year. We've continued to do well, especially in our peak trading periods. Across our peak trading periods, we're up almost 6% on the year. And that's enabled us to grow our like for likes ahead of the market at 1.6%. And a lot of what's behind that is our event plan. Our event plan has been a key thing for us this year. In 2025, Marston's pubs have been home to a darts tournament led by Luke Humphries, the world number one. Paddington and his new movie joined us from Peru. We had a national Trivial Pursuit quiz event. And through the summer, when Oasis Mania was sweeping the UK, we had a series of 90s throwback events with tribute bands and the like in our pub life. So all of these are designed to give people reasons to visit our pubs, a range of guest demographics. I think that's essential at any time of year, but especially so in the summer, when of course this year we had no big football tournament. So events are a big success for us and an important driver in supporting our revenue growth. So secondly, on costs. As Stephen has shown you, we've made excellent progress during 25 on our journey to being a high margin business in adding 140 basis points to our margin, despite significant and well-known headwinds. And we've done this with a relentless drive for efficiency across all areas of our cost base. The biggest area of our cost base is labour, where we've saved almost £10 million, a little bit more than one percentage point on our margin. And this has been about continually getting smarter with the way we use our technology to enhance and optimize our labor teams and our labor schedules. All about getting the right people in the right place at the right time. I think probably the best way to bring to life for you the work we've done on labor is to pick a case study of one of our pubs. The lady pictured on the right is Coty. She's one of our fantastic general managers. She runs the King Charles Pub in Chesham. a lot of work with our labor planning this year they've actually reduced their labor costs through the year by eight percent and despite doing that they've grown their revenue by 19 and also grown their guest satisfaction well ahead of our company average so a good example in the way labor's playing out for us in one of our pubs but it also represents our approach across the company So secondly, in terms of food and drink, our formats allow us to simplify the ranges we offer because we're a lot clearer about the demographic by format. And so that allows you to be clear which food offer and which drink offer you need by pub. So that's allowed us to simplify our range. That's helped us with efficiencies. But alongside that, we've also renegotiated our key food and drink contracts to drive efficiencies where we can. So that's labour and food and drink. Finally, energy and estates. Every pound counts on energy. We've been that way for a number of years now, whether it be the usage that we manage, but also the contracts. There's a relentless focus on attempting to drive efficiencies there. But as Stephen said, we take a very judicious approach to estates more broadly with our capex. looking at our maintenance cycles, spending strictly in maintenance cycles, and that helps us on efficiencies with our repairs budget. So overall, really good progress on the cost side of things. And then finally, on the operating model, guest satisfaction. I mean, this is all about ensuring that when our guests come and see us, they have a great time. And it's very pleasing in the context of the efficiency gains I've just talked to, that we're still delivering better and better experiences through our guests. So from a score of 766 in 23 to 800 last year, 816 this year is a very pleasing performance. And this really is a combination of many of the initiatives coming together, whether it be our events program and the visual areas of our Oktoberfest event that we run during September, whether it be through digital ordering or some of the menu enhancements we've made. All of these things together add up to make a difference to the guest experience. It's worth saying, though, that the number one factor that dominates, that really drives a great guest experience is really strong guest service. That requires almost an obsession, a relentless obsession with getting that right day in, day out. And the work on that is never done. Our teams are very focused on delivering that experience all the way through the year. And as I say, it's pleasing that this year we've been able to continually improve on that. So that's the operating model. When you take revenue, cost, satisfaction together, it's good that we've made strong progress across the piece. And this has been complemented with the work we've done on the digital transformation value driver. I think a key example of this would be the new order and pay app that we launched in March. Really well received. It's paying dividends with our guests in terms of both revenue and reputation. And it's complementing the personal service for those guests who want it. So we've got a 10% revenue uplift when using the app. And those pubs with a higher mix of order and pay usage do significantly better on reputation. What's also good about the app is it can work hand in hand with our events. So the Trivial Pursuit Winner Wedge event drove a big uptake in the use of the app. So good progress overall on this area of digital, but a lot more opportunity here in the future as digital transformation can help us both on revenue and on cost. The third value driver I want to focus on is our new pub formats. So against five core consumer target segments across the market, we've designed five pub formats that are specifically designed to meet the needs of those target audiences. And through a series of test and learn launches in 25, we've been assessing the potential of these pubs to drive appeal and importantly drive powerful CapEx returns. Now in May, I did a deep dive on the two-door format, So I thought this time round, we'd share some more information on the Grandstand brand. Grandstand is a local sports pub. So it targets adults who want an entertainment experience when they go to their local pub. I mean, this is an absolute sports lover's dream. It's similar to a city centre sports bar environment, but in the local community pub. Number of constituent parts to it. At its heart, state-of-the-art technology ensures that we've got three-metre stadium screens, amazing sound systems. Alongside that, there's great match-day food suited to watching the big game. And these pubs will always be run by sports enthusiasts, general managers, who know what their guests want and can work with them to give them a great experience. It's an absolute must-visit for the big game, the atmosphere that we create. But more than that, because it's a local pub and it's a great environment, it's a place that you would want to go to on any night of the week. And we support that with a programme of sports events through the week to give people reasons to come every night. So Grandstand's done really well this year. The guest reaction... And the returns that we've had have been very, very impressive. And it's been a key part of our test and learn year. And test and learn overall this year has exceeded our expectations. We've done 31 launches through the year. So we did 21 two doors, five grandstands, and five Woody's. Woody's is our new family pub. All have done well. Guests love them. They've driven strong uplifts in revenue of 23%. And all of that off relatively modest levels of capex. We've been driving ROICs of more than 30% off only £260,000 per pub. So the test and learn phase really has proven the potential of this stream for us. Real growth opportunity as we roll out across the estate. And all of our pubs have been mapped to the format opportunity they can play to over time. So over time, this really does give us an opportunity as a significant driver of growth. So great progress across our value drivers in 25. And this leaves us feeling very positive as we look towards 2026. Through this year, we'll have a big program of exciting events, all designed to encourage guests to come and visit us, not least with a big football tournament on the horizon that everybody will be very much focused on in the summer. And we'll complement that with our revenue management and order and pay disciplines to drive spend per guest. But alongside the demand drive, as I've just said, our new formats will play an increasingly important role in driving growth through the year. Given our success in 25, we're now accelerating the rollout plan. We'll have 50 or so launches focused on two-door and grandstand, And all of these will make a meaningful difference to both revenue and EBITDA performance through the year. So to summarize, another year of strong delivery in 25, significant growth in both profit and cash flow. We're very excited by the growth potential of our new formats. We see a very promising outlook for the year ahead.

as we continue to deliver as a reliable growth company and with that we can now take some time for questions thank you sir ladies and gentlemen we will now be conducting a question and answer session if you would like to ask a question please press star then one on your telephone keypad a confirmation tone will indicate your line is in the question queue You may press star and then two if you would like to remove your question from the queue. Again, if you would like to ask a question, please press star and then one now. We'll pause a moment while we poll for questions. The first question we have comes from Douglas Jack of Peel Hunt. Please go ahead.

Yes, good morning. i've got two questions if that's okay um in terms of the new formats in 2026 um is the choice of grandstand and two-door largely because they're the ones that have the greatest uplift potentially um adding to the number of reasons to visit i think obviously they've got quite a lot of opportunity there and then the second one was about margins um in 2026 what are the best margin opportunities you see uh over this year thank you

Thanks for your questions. I'll take the first one on formats and then Stephen, if you want to come to margins. In terms of choices, as you know, we were very clear to have the plank of a test and learn phase first to guide our implementation. So the primary choice is certainty of return in the sense that Tudor and Grandstand both launched earlier in the year last year. than Woody's, which allowed us to get more data on those through the year. Most of the Woody's launches came sort of the summer onwards. So whilst all are performing well, we've just got longer data on the other two. The other attraction, of course, with Grandstand is you absolutely want a bigger footprint of those pubs in the market in a year with a World Cup, which we've certainly got an eye on. But really, it's about certainty of returns, Douglas.

And Doug, on your question on margins, I mean, yeah, look, we've made really good progress in 2025. I think we do expect EBITDA margins to increase in 2026, but not to the same extent as the 140 basis points we did in 2025. I mean, I think the best opportunities for me, so there's a bit of flow through stuff. So we made really good progress on labour. Some of those things didn't come through until the second half last year. And so I think some of them will help H1 2026. And also that is a continuing journey for us. So matching right people, right place, matching demand with supply of labor is something that we're going to be relentlessly focused on going forward. That may come through in terms of reduced cost. It may come through in terms of better customer service and therefore improved sales. But I think there will be some upside from that. And then I think on gross margins, I mean, we've got pretty good visibility of both food and drink cost prices moving into next year. We lock in quite a few contracts on that quite early. And I think, therefore, that gives us certainty on those lines. We'll continue the journey on things like revenue management and upselling and so on, and there should be an opportunity to move that further forward as well.

Thank you.

Thank you. The next question we have comes from Karin Puri of JP Morgan. Please go ahead.

Thank you for taking my questions. I've got two quick ones. One on the 1.6% like for like momentum in 25. Just wondering if you could provide a split between pricing and volumes. Number one and number two, just coming back on the cash tax payment in 26. I know it's going to be higher than 2025. But in terms of magnitude, if you could share more on that front would be helpful. Thank you.

So I'll start with a like for likes. As we said in the release, food, drink and machines were all in growth. And that's a mix across them. As you'd expect in that revenue management has played an important part for us. And we'll continue to do so, particularly actually the premiumization as consumers are upgrading to more premium beers and also adding and upgrading on the menu. So and then the second one, Stephen.

Yeah, the cash tax. So, yes, you're right. We flagged that it would increase cash. Last year, the cash tax payments were 5.3 million. That will approximately double next year to about 10 million current. So that's about the extent of it. We are still using some losses from previous trading periods. So the cash tax is still relatively low, but it'll be about 10 million pounds in FY26. Perfect.

And just a quick follow up on that one. So can we expect it to be sort of normalized cash tax starting 2027? Or will you still benefit from some loss in the previous period?

Yeah, 2027 will still be a little bit low. And then from 2028, it'll go back to normalised levels. So it'll be a step up in 2027, but it won't be up to normalised levels yet. And then from 2028, you should expect normalised levels of cash tax.

Very clear. Thank you so much.

Thank you, Sam. Ladies and gentlemen, just a reminder, if you would like to ask a question, please press star and then one now. The next question we have comes from Anna Barnfather of Panmure Librium. Please go ahead.

Thanks. Thanks very much. Just a couple of questions. Firstly, on the reformats, you've mentioned some accelerations of 50. Could you update us on your thinking of what proportion of the estate at this stage you think could benefit from a reallocation into one of the five formats? um so how many of your 1300 pubs and have you only done managed or have you done partnership ones as well uh the second question um i'm just thinking about that the sort of peak trading obviously you're doing really well in those big events with peak trading periods up 5.8 percent um are you tempted to reduce um opening hours on this of non-event days or is there any sort of thinking on that as a way to cut down on overheads um And then just third question, on the revenue mix, I think obviously higher margins and gross margins, can you just give us a bit more colour on perhaps some of the shifts in your sales mix? Thank you.

Thanks, Anna. I'll take the first two and then Stephen, if you could take the third one. Let me start on peak trading, Anna, and then I'll come back to formats. We Um, we, we do look at our hours on a regular basis, but there's not, there's not a massive need to start big closure periods by any means. I mean, one of the things that's most notable, uh, in pub trading today, certainly versus five years ago, um, is the growth of the early evening at the expense of the late evening. So if you look at booking patterns now, peak time for a table, the busiest time to get a table is 6.30 to 7 o'clock. You go back five years, that was more like 8 o'clock. So there's definitely an earlier day part point to your business. And we do look at hours, but I don't think there's anything significant there in cost, particularly in the local community environment where people are around the corner from their houses quite a lot. On the formats, so first of all, yeah, we've actively launched formats across our managed and our partner estate, and they're performing equally well in each. Neither is a differentiator, actually, in terms of performance, but they do work across both managed and partner. And then in terms of the numbers... As we showed earlier, five formats. The two that we didn't deep dive on were locals pubs and adult dining signature pubs. Both of those, we have some of them in market already. I would say in terms of the opportunity, it's probably the locals pubs is the only bit that we wouldn't see as a sort of significant Roic north of 30% opportunity, which probably takes you to 75% or so of our estate with the opportunity for those new formats.

And then, Anna, on the revenue mix, I mean, we're about 35% food in our business overall, but there is a big variation in that, as you'd expect, between format and some of those local pubs versus, for example, our adult dining business, which is very, very different. That has been growing. I mean, clearly food across the market really has been growing quicker than drink over a period of time, but it's not huge. I mean, that number's probably changed by half a percent year on year. So, you know, it's not a huge mix. So hopefully it gives you some idea about the sort of the food and drinker Thank you.

Thank you. Ladies and gentlemen, just a reminder, if you would like to ask a question today, please press star and then one now. If you decide to withdraw your question, please press star and then two. Again, if you would like to ask a question, please press star and then one now. The next question we have comes from Fintan Ryan of Good Boy, Good Body. Please go ahead.

Thank you. Good morning, Justin, Stephen. Two questions for me, please. Firstly, can you give us a sense of what your sort of base case expectations are for the budget tomorrow in terms of, I guess, labour costs, anything that you might be expecting or hoping for, business rates, just to sort of get a sense of what the base case is for the outlook currently and maybe what can change within the next 24 odd hours. Then secondly, could you give some color on like-for-like trading in Q4 and over the last eight weeks of season, you've reported flat like-for-likes. What's been sort of the volume versus pricing split in that? You give some color on the visibility for the Christmas trading. Obviously, you've got bookings up 11% year-on-year, but typically how much of bookings are of your Christmas trading are bookings and what you'd be at this point assuming for incremental pricing for FY, for the calendar 26, right? Thank you.

Thanks, Vinton. If I start on, I guess, the hot topic of the day and tomorrow, which is the budget and expectations for that. I mean, our basic expectations and what sort of what's embedded into the guidance that we've given to the market is that we expect national living wage to increase. Obviously, our expectations are about a 4% increase in the headline rate of national living wage. And we're expecting the differential for under 21 year olds to close slightly compared to where it is at the moment. We're not expecting any further changes to things like national insurance. And then really, you know, I know there have been lots of stories in the press, but at the moment we're not making any expectations on changes for things like machine gaming duty or business rates either. I mean, the Chancellor has flagged that there'll be a review of the way business rates is levied. So that'll be interesting to see. But, you know, we're not making any assumption on that because simply we just don't have the information available to us at this point.

And before I answer the like for likes, Fintan, if you've got any assumptions on the budget tomorrow, please share them with the group. In terms of the like for likes, look, as you know, quarter one's all about Christmas. October and November are relatively small months in the grand scheme of things. December performances is really what matters. And within that, it's the key two weeks. from kind of 19th of December until 2nd of January, quite time tight time. Um, And bookings pace, as we've said, is very good at 11%. And that's off the back of last year. I think we grew Christmas at about 11% last year in like-for-like terms. So it's pleasing the stage we're at. But to your point, walk-ins are also important at Christmas. So we've still got a lot of work to do in order to land that. And that's both in encouraging people to spend their Christmas with us, but also then in managing spend per guest. So we drive the revenue return as well.

And just in terms of the pricing and current expectations?

Well, again, As you know, we kind of manage price through the year in a broader revenue basis. So in terms of our revenue management initiatives around booking density, around premiumization, and yeah, lead price is part of that mix, but we don't have like a hard and fast target. It's overall spend pad that we look at.

Great. Thank you. Thanks.

Thank you, sir. Ladies and gentlemen, at this stage, there are no further questions. I would now like to hand back to the management team for closing comments.

Yeah, well, just to say thanks, everybody, for joining us. Really good engagement. Obviously, we'll all see what comes tomorrow. And I'll wish you an early best wishes for the festive season. Thank you.

Thank you. Ladies and gentlemen, that then concludes today's conference. Thank you for joining us. You may now disconnect your lines.