Solid earnings delivery despite subdued LFLs We update our MARS model following its H1 FY25 results. Despite modest LFLs over the 6 months (+1.3% yoy; Q1 +1.9%, Q2 +0.7%), profit delivery was robust with adj EBIT +20% to £63.3m (margin +250bp to 14.8%), driving £19m adj PBT. While labour costs have increased since April, LFLs have accelerated, helped by weather and Easter phasing. For FY25, we increase PBT by 2% to £69.2m on +2.8% LFL and +100bp EBIT margin expansion to drive adj EPS 7.8p, +55% yoy. Self-help and investment-driven estate progress A lot of the margin and profit levers are unique to MARS in the short-term, reflecting its accelerating investments behind its estate (capex to be c.£60m vs. £46m yoy) and digital initiatives (updated labour-saving tool, new consumer ordering App). Of the 30 conversions planned for FY25 (each at an average cost of c.£250k), c.20 will be under the “2-Room” format which combines family dining with a more traditional drink-led area, broadening the customer catchment. While it is still early, of the 18 pubs converted so far, feedback has been very positive (reputation scores >850 vs. total estate at 800) and the venues have seen a 33% underlying revenue uplift on average. Future capex requirements will be fine-tuned once management get better visibility on returns from these initial investments. Few evident re-rating catalysts Shares are -8% ytd and leaves MARS trading on 5x cal.25 P/E and 7.2x EV/EBITDA – this is a substantial P/E discount to the sector (12x) but is broadly in-line on EBITDA. While the underlying cash generation is sustainably improving, leverage in absolute terms remains elevated with few evident catalysts at this point to accelerate the deleverage trajectory and with a refinancing of the capital structure unlikely for the mid-term (existing structure starts to mature post 2030).