Marston’s PLC (AIM:MARS) final year results come against a tough backdrop for the pub sector.
Sales improved in the fourth quarter and anecdotal evidence recently suggests the World Cup might be helping the bigger sector players.
Even so, costs are a problem says Peel Hunt.
"Higher energy costs have taken £15m off PBT between 2019 and 2023E. Some of this could reverse eventually, but increases in labour costs are structural," it said.
The broker has cut its profit forecasts for the next two years by £6mln to reflect the rising national living wage.
Gas prices for the company are fixed until March 2025, but electricity costs will be higher than planned.
Peel Hunt expects pubs to close down widely after the New Year but Marston’s 'should survive and eventually thrive through sales growth and debt reduction'
Buy with a target price of 75p is its view.